Trump Administration Announces Investigation of Need to Impose Tariffs on Imports of Automobiles and Parts to “Protect National Security”
An early morning tweet yesterday (5/23/2018) from President Trump teased “There will be big news coming soon for our great American Autoworkers. After many decades of losing jobs, to other countries, you have waited long enough!” Commerce Secretary Wilbur Ross followed upon later that day with an announcement that the President has directed the Commerce Department to open an investigation under Section 232 of the Trade Expansion Act of 1962 to determine whether imports of automobiles (including SUVs, vans and light trucks) and automotive parts into the United States “threaten to impair the national security”.
Summary: President Donald Trump’s announcement on May 8, 2018, withdrawing the United States from the Joint Comprehensive Plan of Action (JCPOA) that relaxed sanctions on Iran is already having significant diplomatic effects around the world. On May 18, 2018, the European Union responded by resurrecting a 21-year old E.U. blocking regulation. European companies with United States affiliates now face the real prospect of being sanctioned by the United States if they keep their investments in Iran, or being sanctioned by the European Union if they disinvest. What legal tools exist to help them navigate these treacherous waters?
Summary: President Donald Trump’s announcement on May 8, 2018, that the United States will withdraw from the Joint Comprehensive Plan of Action (JCPOA) that relaxed sanctions on Iran are already having significant diplomatic effects around the world. But what does it mean for the auto sector, the energy and transportation industries, Iranian immigrants to the United States, and other businesses and individuals with interests in Iran?
Most foreign governments require disputes with parties with which they have agreements to be litigated in their courts using their domestic law. This tends to create an unwillingness, on the part the private party, to seek redress in local courts in order to pursue its rights given the tendency of such courts to often side with the government.
EU, CANADA, MEXICO GRANTED A “FINAL”30 DAY EXEMPTION TO “CONTINUE” NEGOTIATIONS; SEVERAL OTHER COUNTRIES GRANTED “PERMANENT” EXEMPTIONS IN EXCHANGE FOR QUOTAS. PRODUCT EXCLUSION REQUEST PROGRAM BOGGED DOWN.
The Internal Revenue Service has recently announced cost-of-living adjustments applicable to dollar limitations for retirement plans (and other items) for 2018. Many of the retirement plan limitations will change for 2018 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged because the increase in the index did not meet the statutory thresholds that trigger their adjustment.
The Courts Make Several Precedential Decisions and the USPTO Issues a Memo Helping to Clarify the ‘Alice’ Patentability Analysis: It’s a Matter of Fact!
For those patent law aficionados out there, March and April were exciting months. The Courts AND the USPTO made several key determinations that cover topics from the constitutionality of USPTO proceedings to clarifying how the courts and the patent office are to determine what exactly is needed to show “significantly more” for purposes of satisfying the ‘Alice’ patentability analysis
The United States International Trade Commission ("USITC" or "Commission") has announced changes to its Rules of Practice and Procedure of Section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) cases. Section 337 investigations conducted by the USITC most often involve claims regarding intellectual property rights, including allegations of patent infringement and trademark infringement by imported goods.
These Section 337 rule changes, which are final, go into effect 30 days from publication in the Federal Register.
I would categorize the Cambridge Analytica incident/breach in a similar fashion to the Edward Snowden revelations in that the Snowden revelations that awakened the world—and specifically the EU—to the extent of nation-state monitoring (in the Snowden case, it was the US’s monitoring activities, but don’t think for a second that every other country that was outraged at our monitoring wasn’t doing the very same thing to us and others) that ultimately resulted in the collapse of the US-EU Safe Harbor self-certification program, the rise of the temporary fix with the Privacy Shield and now the soon-to-be-implemented General Data Protection Regulation. All of this furor over the loss of privacy and the “theft” of personal data must be placed into context.
On Monday, the Environmental Protection Agency (EPA) rolled back the Obama-era auto emissions standards for 2022 to 2025 model-year cars and light-duty trucks. At first glance, this appears to be a clear win for automakers, who have been complaining for years that the steep targets for fuel economy and emissions are not only costly, but also stifling to the American automotive market. While the political motivations and topics like the impact of these rollbacks on carbon dioxide (CO2) emissions will likely be debated over the coming weeks around water coolers, coffee stations in the office, and on countless media outlets, one of the most pressing questions that need-be answered is, what will the impact of these rollbacks be on the automotive supply base?
NEW TARIFFS ON CHINESE EXPORTS TO UNITED STATES LINKED TO INTELLECTUAL PROPERTY ISSUES ANNOUNCED: HEARINGS TO BE HELD
The U.S. Trade Representative(USTR) announced on April 3, that it has determined that the acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation covered are” unreasonable or discriminatory and burden or restrict U.S. commerce” and is proposing retaliatory tariffs on some 1300 items. USTR is seeking public comment on the proposed tariffs and will hold a public hearing regarding a proposed determination on appropriate action. USTR proposes an additional duty of 25 percent tariff on a list of products from China. The list of products, defined by 8-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS), is set out below.
There is money and business management support available for the commercialization of good ideas in the health industry sector. In the second annual The Autonomous Patient: Entrepreneurs Driving Healthcare II© event held at Automation Alley, industry thought leaders, entrepreneurs with technologies, devices and pharmaceuticals, business incubators, and representatives from private and public financing sources shared their battle-honed perspectives and blunt advice to current and would-be entrepreneurs involved or interested in the burgeoning healthcare space. Rounding out their insight and advice was some practical workshop information on the regulatory environment in which ideas must be turned into action. An engaged audience took away some valuable advice from the keynote remarks, four panel sessions, questions and the networking discussions that took place around them.
On March 23, 2018, a United States District Court enforced a “no-challenge” clause in a patent license agreement that prohibited the licensee from challenging the licensed patents at the U.S. Patent Office. The court ordered the licensee to file motions with the Patent Office withdrawing its petitions for inter partes review of the licensed patents, among other things. Dodocase VR, Inc. v. MerchSource, LLC, No. 17-cv-07088-EDL (N.D. Cal. Mar. 23, 2018).
STEEL AND ALUMINUM TARIFFS UPDATE: MORE COUNTRIES GIVEN ‘TEMPORARY’ EXEMPTIONS; BUTZEL TEAM IN PLACE AND WORKING ON CLIENT PRODUCT EXEMPTIONS
Hours before stiff tariffs on steel and aluminum (25% and 10% respectively) that were first announced by President Trump two weeks ago became effective, the White House on March 22, 2018 issued a new set of Proclamations temporarily exempting imports from “countries with important security relationships” with the U.S. – i.e., Argentina, Australia, Brazil, all European Union countries, and South Korea -- in order to continue discussions “on satisfactory alternative means to address the threatened impairment to the national security by imports of steel articles from those countries.” Major exporters not included were Japan, China, India, and Turkey.
Michigan Department of Environmental Quality Requires POTW’s to Reduce and Eliminate PFOA/PFOS Through Industrial Pretreatment Programs
Publicly Owned Treatment Works (“POTWs”) with Industrial Pretreatment Programs are evaluating facilities that discharge into the POTW to determine whether companies are discharging perfluorooctanoic acid (“PFOA”) or perfluorooctanesulfonic acid (“PFOS”) (collectively, “PFAS”) into the POTW. As part of the State of Michigan’s initiative to track down and eliminate potential sources of PFAS in drinking water, The Department of Environmental Quality (“DEQ”) sent notices to Michigan POTWs reminding them of the state’s previously established and applicable Water Quality Standards (“WQS”) for PFAS , warning that a POTW that passes PFAS through its treatment plant in concentrations exceeding these WQS is in violation of the POTW’s NPDES permit and state law.
The Commerce Department (DOC) published the actual procedure for “individuals and organizations using steel or aluminum articles in business activities in the United States” to seek product exemptions from the Section 232 tariffs on steel and aluminum imports announced by President Trump on March 8 2018. These product exemptions are separate from the country exemptions that the President has invited individual nations (other than Canada and Mexico) to attempt to negotiate.
UPDATE – PRESIDENT TRUMP FORMALIZES GLOBAL STEEL AND ALUMINUM TARIFFS; PROVIDES POSSIBILITY OF EXEMPTIONS FOR SOME PRODUCTS AND/OR COUNTRIES
Exactly one week after his surprise announcement before a group of steel and aluminum industry executives to impose tariffs on “all” steel and aluminum imports in the interest of national security, President Trump followed up on March 8, 2018, with formal Proclamations to implement his decision. The Proclamations order modification of the Harmonized Tax Schedule to implement an additional ad valorem duty of 25% on imported steel articles, and 10% on aluminum articles, “with respect to goods entered, or withdrawn from warehouse for consumption” effective March 23, 2018.
On March 7th, in a highly anticipated opinion, the Court of Appeals for the Sixth Circuit held that discrimination on the basis of transgender status and gender transitioning violates Title VII of the federal Civil Rights Act of 1964, as amended (Title VII). The court overturned a lower court decision that had found a narrow “religious freedom” exception allowing termination of a transgender employee. EEOC v. R.G. & G.R. Harris Funeral Homes, No. 16-2424, 2018 WL 1177669 (6th Cir. March 7, 2018).
After that photo company sent a demand letter for $5,000, you agreed to never again grab images off of Google. Instead, you turned to Twitter or YouTube or Facebook and grabbed the embed code and put it on your website. What could go wrong, after all, they make the embedding code so easy to access…
Despite the fact that copyright law finds its origins in the U.S. Constitution, it is far from an established doctrine. Never has this been more obvious than when Tom Brady, Twitter and Breitbart News collided in a case that will likely change the way companies across the country address linking social media in websites.
President Trump announced on March 1 his plan to levy tariffs of 25% and 10% respectively on steel and aluminum imports. His surprise announcement came during a “listening session” at the White House with U.S steel and aluminum company CEOs and in advance of a briefing scheduled with Chinese officials on the impending actions. He described the measures as providing the opportunity for the U.S. to “re-grow” the steel and aluminum industries, which “have been decimated by decades of unfair trade and bad policy with countries from around the world.” Trump only stated the amount of the tariffs; that they would be in effect “for a long period of time”; and that he would sign off on them next week. He did not explain whether they would apply to all exporting countries and/or to all categories of products. The White House provided no other details.
Last week, the Federal Circuit affirmed a U.S. Patent and Trademark Office determination that patent claims are invalid despite its earlier decision upholding the validity of the same claims. Knowles Electronics LLC v. Cirrus Logic, Inc., No. 2016-2010 (Fed. Cir. Mar. 1, 2018).
To Disclose or Not to Disclose - That is the Question: Sexual Harassment Settlements & the New Tax Act
The Tax Cuts and Jobs Act (the new Tax Act) may make sexual harassment settlements more expensive for employers. Prior to tax reform, the Tax Code had permitted companies to take a business deduction for the costs of obtaining sexual harassment settlement agreements. The new act prohibits that deduction if sexual harassment or sexual abuse settlements include non-disclosure provisions.
In a warning shot to manufacturers and sellers of aftermarket automobile parts, a Michigan federal court denied a bid to invalidate design patents to body parts of automobiles, holding that they are non-functional as a matter of law. Automotive Body Parts Association v. Ford Global Technologies, LLC, No. 2:15-cv-10137 (E.D. Mich. Feb. 20, 2018).
You may not have been paying attention to the upcoming GDPR (General Data Protection Regulation) deadline on May 25th, thinking that it does not apply to your company, but it may.
In one of the most watched Trade Secret Misappropriation cases of the century—which has been billed as an “epic” lawsuit, one of the “juiciest” trade secret cases ever, and one of the “highest profile court battles in Silicon Valley history”—Waymo and Uber have finally reached a settlement in the case that has raged on between them for the past year. As part of the settlement, Waymo (a subsidiary of Google’s parent company) will receive .34 percent of Uber’s equity. If that does not sound like much, considering that Uber is valued at $72 billion, it is. This settlement translates to approximately $244 million. One publication reports that were this amount won in a jury verdict, it would have been one of the highest trade secret jury verdicts in the United States in the past decade.
In a previous Client Alert, we provided information on the growing trends in telemedicine. In 2017, that trend continued, as 34 states and the District of Columbia passed 63 pieces of telemedicine legislation. Nine states passed telehealth legislation mostly easing restitution. Nebraska, Washington, Tennessee, and Maine passed legislation to join the Interstate Medical Licensure Compact, and 22 states now support this effort to streamline physicians licensing in multiple states. Two other states have delayed implementation and four more--including Michigan—still have legislation pending.
Companies which Sponsor Employee Disability Benefit Plans May Need to Take Immediate Action to Comply with New Regulations
The Department of Labor (“DOL”) has announced that the revised claim and appeal procedure regulations under the Employment Retirement Income Security Act of 1974 (“ERISA”) for employee benefit plans providing disability benefits will soon take effect. The enhanced rules primarily adopt procedural protections and safeguards for disability benefit claims that are currently applicable to claims for group health benefits pursuant to the Patient Protection and Affordable Care Act. As a result, plan administrators of employee benefit plans subject to ERISA will need to quickly act to ensure compliance with the enhanced rules.
How the Sessions Memo Affects the Cannabis Industry in Michigan and Beyond
As the cannabis industry continues to grow across the nation (marijuana use is legal in some fashion in approximately 29 states already), the general public and those with vested business interests in the industry itself are anxious to see whether that growth will either continue or pause in the Trump Era. In Michigan, we are tracking the possibilities of recreational marijuana legalization as early as 2019, following an anticipated vote in the November 2018 general election. That anxiousness is even more pronounced given a recent decision from United States Attorney General Jeff Sessions, who released a memo on January 4, 2018 (the “Sessions Memo”) rescinding federal guidance that had reassured states that they would not be punished for legalizing marijuana. Politics aside, that rescission has left the public and the industry with more questions than answers. This article attempts to provide a critical update on the status of this developing topic and explores the potential impact on the Cannabis industry in Michigan and beyond.
Effective January 1, 2018, the Bipartisan Budget Act of 2015 (the “Budget Act”) implements new rules regarding audits of partnerships. These rules also apply to limited liability companies taxed as partnerships. For partnership tax years beginning in 2018, the Budget Act now imposes an entity level tax collected on the partnership itself to the extent the partnership is audited and the Internal Revenue Service makes an adjustment and determines that there is a tax deficiency in any audit. Prior to application of the Budget Act, audits were normally assessed and paid at the partner level by the partners rather than at the partnership level by the partnership.
In a Letter to State Surveyors, the Centers for Medicare & Medicaid Services (“CMS”) has clarified its position on texting patient information, and more notably Orders, among members of a patient’s care team. In a nutshell: Don’t Do It!
The Affordable Care Act (ACA) contraceptive mandate, contained in 2012 agency guidelines fleshing out the ACA “essential health benefit” pertaining to women’s health and preventive services, required most group health plans to provide contraceptive coverage with no cost-sharing, unless the plan sponsor fell within a religious exemption. On October 6, 2017, the Trump Administration issued immediately effective “Interim Final Rules” (the “2017 IFRs”) that “rolled back” that mandate.
Now, however, in two of several lawsuits challenging the new rules, federal courts in California and Pennsylvania have entered nationwide injunctions barring the Administration from enforcing the 2017 IFRs.
This E-News Alert briefly summarizes some of the employee benefits provisions in the Tax Cuts and Jobs Act (the “TCJA”) – i.e. the tax reform legislation – recently passed by Congress and expected to be signed by the President into law. Please contact the author of this E-News alert, any member of the Butzel Long employee benefits practice group, or your regular Butzel Long attorney contact for more information.
Congress just passed the Tax Cuts and Jobs Act (the “Act”) that President Trump is expected to sign in the coming days. The Act provides for changes to the tax code that will have far reaching effects for both individuals and businesses.
On Friday, December 15, 2017, Republican leaders in Washington released the final version of their proposal for tax reform. Within a few hours, two Republican senators, who had both opposed previous versions, announced that they were prepared to vote in favor of the final bill. Both houses have now passed the legislation and it is heading to President Trump’s desk for his signature. But what will it mean for tax-exempt nonprofit organizations once it becomes law?
Effective January 1, 2018 the minimum wage in Michigan will increase to $9.25 per hour. This is the result of the graduated increases in the state minimum wage enacted in 2014 by the Michigan Legislature. The minimum wage for tipped employees also increases on January 1 to $3.52 per hour (provided that tips per hour average at least $5.79 since tipped employees must make at least minimum wage when tips are included).
Headline stories from Hollywood to our nation’s capital – with new revelations virtually daily – are setting off alarm bells for employers throughout the country, and for good reason. It is quite likely that the tremendous media attention on the issue of sexual harassment will result in an increase in complaints against employers and potential claims. That, in turn, certainly raises the specter of additional liabilities for employers. But rather than solely viewing the situation as a threat, employers can instead use the current discussion about sexual harassment as an opportunity – an opportunity to ensure their policies are up to date and appropriate, to better educate and train their supervisors and managers, and to display, and in some cases create, a workplace that demonstrates care for its employees--which reflects a non-threatening, comfortable environment, and which promptly and effectively investigates and resolves complaints.
WAYMO BECOMES THE FIRST TO START TESTING LEVEL 4 VEHICLES ON PUBLIC ROADS WITHOUT A DRIVER; ALSO THE FIRST TO PROVIDE DOT-RECOMMENDED “SAFETY REPORT”
Waymo, Google’s self-driving car spin-off, publically took the lead in the race to bring Level 4 autonomous vehicles to the public on November 8th when CEO John Krafcik showed a Web Summit conference audience video of modified Chrysler Pacificas moving on public roads in the greater Phoenix area without human drivers.
On October 31, 2017, the Detroit City Council passed comprehensive amendments to Chapter 22 of the Detroit City Code, Handling of Solid Waste and Prevention of Illegal Dumping, imposing stringent fugitive dust mitigation requirements on owners and operators of Bulk Solid Material Facilities.
Auto industry groups joined together this week in an unusual display of unity to keep the Trump administration from drastically changing or withdrawing from the North American Free Trade Agreement (NAFTA). The Motor and Equipment Manufacturers Association (MEMA), and the American International Automobile Dealers Association (AIADA), joined with several Original Equipment Manufacturers (OEM) trade associations (Alliance of Automobile Manufacturers (AAM), the Association of Global Manufacturers (AGM), and the American Automotive Policy Council (AAPC)). On October 24, 2017, they launched the “Driving American Jobs” coalition, a grass roots effort enlisting voters to tell Washington: “Don’t change the game in the middle of a comeback.”
Recent IRS Development
The world of retirement plan maintenance was upended last year when the Internal Revenue Service announced the near-abandonment of its determination letter program for ongoing individually designed qualified retirement plans. A favorable determination letter from the IRS has for several generations been the accepted indicator of a plan’s tax qualification. For individually designed plans, new or updated letters will no longer be obtainable from the government, and the reliance value of the last letter received by a plan will begin to erode over time. For both tax law compliance and for business reasons, plan sponsors must now find a way to achieve continued tax-qualified status for their plans, and a means of documenting compliance, lacking IRS ruling letters.
President Trump summarized the net result of two executive orders he recently signed in a Cabinet meeting on October 16, 2017, saying that there is “no such thing as Obamacare anymore."
Michigan House Bill 4755, quietly introduced this past June by State Representative Lucido (R-Washington Township), seeks to (i) require notice of the requirement of a noncompete to job applicants, and (ii) outright ban noncompetes for “low-wage” employees.
On Friday, October 13, President Trump announced that he was refusing to certify Iran’s compliance with the Joint Comprehensive Plan of Action (“JCPOA”) that President Obama negotiated in 2015 with Iran, Great Britain, France, Germany, the European Union, Russia, and China. President Trump’s action opens up the possibility that the United States will withdraw from a deal that was designed to keep Iran from obtaining nuclear weapons within the next decade. Although President Trump has the legal authority to terminate the agreement himself (and has reserved the right to do so in the future), he has turned to Congress to take the next step.
New Information Pertaining to Attorney Representation at the U.S. Land Ports of Entry Along the Land Border Shared with Canada
This E-news alert is to make the public aware that there has been a change in the processing of applications for immigration benefits at the U.S. borders. The change has to do with attorney representation of the company or an individual. While there has never been a right to attorney representation at a U.S. Port of Entry, the U.S. Customs and Border Protection (CBP) historically extended the privilege of attorneys representing their individual or corporate clients, particularly when seeking immigration benefits to classify the clients’ prospective or current employees in L-1 or TN classification under the NAFTA (North American Free Trade Agreement).
Many individuals, corporations, and small-business owners impacted by Hurricanes Harvey and Irma are scrambling not only to protect and rebuild their properties, but also to mitigate their losses by calling on their insurance coverage. Both tasks can be time-consuming and frustrating in the immediate chaos that often follows a natural disaster. The following guidance, in question-and-answer format, is offered to help individual and corporate policyholders pursue insurance coverage for losses suffered from such events.
On September 12, 2017, the Department of Transportation released revised voluntary guidance for companies developing autonomous technology. The guidance builds on the 2016 Federal Policy, stressing several safety elements: vehicle system safety, operational design domains, object and event detection, fallback, validation, human machine interface, cybersecurity, crashworthiness, post-crash behavior, data recording, consumer education, and laws.
It took the U.S. House of Representatives less than two days after returning from its August recess to approve on Wednesday by voice vote landmark legislation to clarify and enhance regulation of highly automated vehicles (HAVs).
The disruptions to the automotive supply chain caused by the cataclysmic events in Texas are likely to continue for some time and become increasingly severe. Even suppliers that are not directly or immediately affected may experience some disruptions to their supply chains as the difficulties encountered by many tier 2 and tier 3 suppliers continue to ripple upward.
Another Obama-administration employment initiative has been stayed. On August 29, 2017, the Office of Management and Budget (OMB) issued a stay of the EEO-1 pay data collection requirements. And, just in the nick of time as the reporting period that was to be used as the EEO-1’s “snapshot” period was just a few weeks away (one pay period during the three-month period from 10/1/17 to 12/31/17).
In a report just issued, global consultants PwC ranked Michigan second among all 50 states as a place to invest and manufacture in the aerospace industry.
How can Blockchain, the digital distributed ledger technology so closely associated with “Bitcoin”—the cryptocurrency of choice for hackers—be used to mitigate the inherent risks of electronic health records? Can a hacker-born technology be used to secure our most sensitive personal health information? Simply, yes.
State Approves New Round of Innovative State Economic Development Incentives: Find Out if They're Right for Your Business
Before leaving for its summer recess, the Michigan Legislature approved two landmark laws that expand the set of economic development incentives available in the state by allowing employers to keep income taxes paid by their employees. These new incentives represent a new source of support for developers and other businesses looking to invest in Michigan.
Slightly over a month after the Senate Committee on Commerce, Science, and Transpiration issued and discussed bipartisan principles for self-driving vehicles legislation, the House Subcommittee on Digital Commerce and Consumer Protection approved legislation that clarifies the roles of the federal and state governments in regulating Highly Automated Vehicles (HAVs). With this legislation, the House has taken action to encourage HAV testing, development, and ultimately deployment in the United States.
The Trump Administration after threatening to withdraw from the North American Free Trade Agreement (NAFTA) on several occasions instead decided to favor a renegotiation of NAFTA.
The Federal Communications Commission (FCC) at its monthly meeting on July 13th adopted an order that provides some good news and some bad news for the automotive industry.
Defend Trade Secrets Act of 2016 Best Practices Released: What Every Company Needs to Know to Protect Their Trade Secrets
As many clients know, last year a federal Trade Secret statute was passed known as the “Defend Trade Secrets Act of 2016” (or the “DTSA”). A provision in the DTSA stated that the Federal Judicial Center—the research and education agency of the judicial branch that assists the federal courts and is chaired by the Chief Justice of the United States—was to issue “Best Practices” guidelines within 2 years of the DTSA being enacted. These Best Practices are to be shared with all Federal Courts in the nation as well as submitted to the Senate Judiciary Committee and the House Judiciary Committee.
On June 26, 2017, the Supreme Court issued a decision to partially institute a portion of President Trump’s travel ban outlined in Executive Order 13780. On June 29, 2017 at 8 p.m. EST, the travel ban went into effect for a period of 90 days against travelers from Iran, Libya, Somalia, Sudan, Syria, and Yemen, who cannot show a “bona fide relationship” with a person or entity in the U.S.
SOLVING THE UNCERTAINTY IN DEVELOPMENT, TESTING, AND MARKETING OF DRIVERLESS VEHICLES – THE HOUSE OF REPRESENTATIVES DRAFTS LEGISLATION TO END THE “PATCHWORK” OF LAWS
A key subcommittee of the powerful House Energy and Commerce Committee held a hearing on Tuesday, June 27, 2017, to discuss legislation to respond to the rapid technological innovations that promise to redefine mobility in the US and beyond.
Now Is the Time to Review Michigan Property Tax Assessments to Avoid Excessive Property Tax Payments
Michigan property owners will be receiving their real property summer tax bill within the next few weeks. The amount owed may cause those who have not appealed their property taxes over the last several years to ask whether they are being assessed using inflated taxable values.
A PRACTICAL GUIDE TO CRAFTING REASONABLE NON-COMPETE AGREEMENTS IN LIGHT OF RECENT LEGAL DEVELOPMENTS
By: Phillip C. Korovesis, Bernard J. Fuhs, and Haley Jonna
Butzel Long, a professional corporation
Senate Hearing on Connected Cars: Be On the Look-Out for Legislation; Standards-Setting Bodies Offer Industry Opportunities to Shape the Future of Automotive Regulation
A day after issuing a set of bipartisan principles for self-driving vehicles legislation, the Senate Committee on Commerce, Science, and Transportation held a hearing entitled, “Paving the Way for Self-Driving Vehicles,” where the panel heard testimony from representatives of automotive OEMs, developers of artificial intelligence, the American Center for Mobility, and Mothers Against Drunk Driving. The Chairman gave no formal timetable for committee action but members and staff have indicated an intention to move quickly with a bill that could be ready for introduction later this summer.
The Trump administration’s Department of Labor announced on June 7th and June 8th that it will start the process of rolling back two controversial DOL regulations promulgated by the Obama DOL: the overtime pay regulation and the “persuader” regulation.
Department of Labor withdraws informal guidance on joint employment and independent contractor status issued by the Obama Administration
The Department of Labor announced on Wednesday, June 7, 2017, that it was rescinding two Obama administration rules, one that expanded the "joint employer" doctrine and one regarding independent contractor classification.
On May 18th, the new U.S. Trade Representative (USTR), Robert Lighthizer, formally notified Congress of the President’s intent to initiate negotiations with Canada and Mexico regarding “modernization” of NAFTA.
If your company is involved in the trade of goods and/or services with Mexico or Canada this is an important opportunity for you to have input into these negotiations.
C-suite officers around the world have been singing this sad song the last couple of weeks. This has been especially true for any HIPAA covered entity or business that creates, maintains, transmits, or stores unencrypted ePHI. As IT professionals are quick to point out, in the event of a ransomware attack, “there is currently no method of decrypting encrypted files without having the private [decrypt] key.” Even if you pay the ransom, however, there is no guarantee that you will receive all the necessary decrypt keys. In many cases, the hackers leave behind a “backdoor”—basically a hidden piece of additional malware that allows the hacker to gain entry at some later time.
In a unanimous decision, the U.S. Supreme Court ruled today in TC Heartland LLC v. Kraft Foods Group Brands LLC, No. 16-341, that patent infringement lawsuits must be brought in one of two places: (1) wherever the defendant is incorporated or (2) where the defendant has committed acts of infringement and has a regular and established place of business. This ruling will greatly reduce the number of patent cases litigated in the Eastern District of Texas, a forum popular with patent plaintiffs, and increase the number of filings in the Eastern District of Michigan, and the District of Delaware.
At the direction of President Trump, the newly installed U.S. Trade Representative (USTR), Robert Lighthizer, formally notified Congress of the President’s intent to initiate negotiations with Canada and Mexico regarding “modernization” of NAFTA. Under section 102 of the Trade Priorities and Accountability Act of 2015 (TPAA), the USTR will consult “closely” with Congress to develop the Administration’s “negotiating positions” to ensure that that they are “consistent” with Congressional priorities and objectives.
As a firm founded in Detroit, Butzel Long sympathizes with the people of the Commonwealth of Puerto Rico as they embark upon the uncertain path of governmental bankruptcy. By commencing its proceedings with an estimated $123 Billion in debt ($49 Billion in pension debt and $74 Billion in bond and other claims), Puerto easily surpassed Detroit as the largest ever United States governmental bankruptcy. Puerto Rico’s approximately 3.5 million citizens each carry an unsustainable pro rata debt burden of $35,125 (not including their share of the United States’ national budget deficit), and Puerto Rico’s government has not been able to provide adequate services to its people because of its debt load.
One of the hallmarks of the Trump Administration is its intention to shake up the old way of doing things in Washington. To that end, the President has issued Executive Orders that require Executive Agencies to put in place procedures for reexamining all of their regulations and to develop a comprehensive plan for reorganizing the Executive Branch.
Strong intellectual property (“IP”) rights are the cornerstone of success for many companies looking to keep pace in today’s rapidly developing marketplace for new and advanced automotive technologies. Butzel Long works with automotive suppliers to help them navigate each phase of the IP lifecycle, from procuring rights all the way through enforcement campaigns in federal and state courts, and before the International Trade Commission. To keep our clients informed and up to date on what is happening in the world of IP, the Butzel Long IP Bulletin highlights recent patent, trademark and copyright news, issues and case law with special emphasis on the automotive industry. If you would like to receive more information about a particular case, issue or news item, or have any questions regarding our practice, please feel free to contact your Butzel Long attorney.
Items in this Bulletin:
- NEW AUTOMOTIVE PATENT INFRINGEMENT COMPLAINTS
- MICHIGAN MAY BE SEEING MORE PATENT INFRINGEMENT CASES
- U.S. TRADE REP. SHINES SPOTLIGHT ON AUTOMOTIVE IP
Franchise industry watchers are drawn once again to the “Golden Arches,” as McDonald’s heads toward its annual shareholder meeting later this month in Oak Brook, Illinois. There, up for vote, will be a proposed shareholder resolution, which, if passed, would assign a new class of preferred stock to the company’s franchisees, enabling them to elect one person to the corporate board of directors without the consent of common shareholders. Each franchisee would receive one share of the preferred stock for each restaurant he or she owns. The shareholder that submitted the proposal is a single trust owning more than 5,000 shares in McDonald’s.
Michigan Gets Aggressive in Its Efforts to Combat Opioid Abuse.
On April 11, 2017, the State unveiled its new Michigan Automated Prescription System (“MAPS”), which significantly overhauled its predecessor system. The updated MAPS is just one step in the State’s Action Plan presented to Governor Snyder in October 2015 by his Michigan Prescription Drug and Opioid Abuse Task Force. Effective April 4, 2017, Users and Data Submitters of MAPS were no longer able to access the old System. Registration for the new MAPS opened March 8 and 9, 2017 for Data Submitters (Clearinghouses) and certain Users (Practitioners and Pharmacists), respectively. Registration for other Users (government agencies, law enforcement, and Pharmacy Benefit Managers) opened March 16, 2017.
Starting April 3, 2017, the United States Citizenship and Immigration Services (“USCIS”) will temporarily suspend premium processing for all H-1B petitions.
On February 24, President Trump issued an “Executive Order on Enforcing the Regulatory Reform Agenda” (“EO”) that requires every executive department and agency to establish within 60 days a Regulatory Reform Officer (“RRO”) to implement the president’s regulatory reform agenda for reviewing and reducing regulatory burdens.
Suppliers Beware: FCA’s Revised General Terms and Conditions May Hamper Suppliers in Recall and Warranty Disputes
FCA US has revised its Production and Mopar Purchasing General Terms and Conditions to include a new dispute resolution provision which among things, provides FCA with the unilateral right to compel an expedited baseball style arbitration “in cases of disputes relating to quality, warranty, or indemnification under Section 6, 8, or 11 of the terms, including claims in connection with vehicle recalls or customer satisfaction campaign.” (Hereinafter collectively “Recall/Warranty Disputes”). Other matters are arbitrable only by mutual agreement and they too are subject to the expedited rules. (FCA revised terms, § 26(c) and Annex A).
We continue to receive information and updates concerning the Executive Order signed by President Trump on January 27, 2017.
On Friday January 27, 2017, President Trump signed an Executive Order (“Order”) relating to visa issuance, admission to the U.S. procedures, and refugees. The Order is titled "Protecting the Nation from Foreign Terrorist Entry Into the United States."
A New Outlook From The White House? Following eight years of a Democratic President with a career businessman will likely lead to a regulatory climate that is more friendly to business generally. However, the legal framework that emphasizes corporate compliance will not likely change in the near future.
Does offering incentives to disclose medical information violate the ADA and GINA?
Many companies have jumped on the “wellness” bandwagon, offering programs in varying forms to their employees and employees’ families to promote health and prevent disease. These programs support companies’ legitimate interests in managing health coverage costs, encouraging employees to take a more active role in their health care coverage and promoting employee satisfaction. To induce participants, companies often offer incentives in the form of health coverage premium discounts.
NHTSA's Proposal to Mandate that Automobile Manufacturers Incorporate Vehicle-to-Vehicle Capabilities into New Cars – an Update
We previously published a Client Alert concerning NHTSA’s proposal to establish a new Federal Motor Vehicle Safety Standard (FMVSS) -- No. 150 – that would mandate vehicle-to-vehicle (V2V) communications for new light vehicles and to standardize the message and format of V2V transmissions. https://www.butzel.com/client-alert-detail/NHTSAa-Proposal-to-Mandate-that-Automobile-Manufactures-Incorporate-Vehicle-to-Vehicle-Capabilities-into-New-Cars.html As we explained, because V2V communications can be a critical component of automated vehicle technologies, the automobile industry should take this opportunity to comment on the NHTSA proposals. NHTSA will rely on the record developed in this proceeding to determine whether V2V should be mandated, as well as whether any of the details of its proposals should be adopted as proposed or refined in some ways. The comment date will be triggered by the publication of the NHTSA Notice of Proposed Rulemaking (NPRM) in the Federal Register, which has now been scheduled to occur on January 12, 2017. Comments are due 90 days after that date, which would be April 12, 2017. Lawyers with Butzel Long will be happy to assist with formulating and submitting comments to NHTSA.
Automotive technology continues to dominate the talk of CES. From ultrasonic holographic haptic controls to advanced mapping software that augments the driver’s reality, it is clear that mobility technology is a hot commodity. Accompanying these advances are specific legal issues that follow the 2017 legal takeaways highlighted in yesterday’s summary Staying Connected at CES 2017.
With CES underway, it is clear that the automobile is poised to be the king of the show. Faraday Future demonstrated the ups and downs of emerging technology, particularly the default mode programming. The Toyota Concept-i offers a vehicle that wants to establish a "relationship" with its drivers. The Chrysler Portal highlights the ingenuity that millennial engineers bring to the user interface of electric and autonomous vehicles.
Trump Administration Forecast – How Can President Trump Deliver on His Campaign Promises Regarding Trade?
Major changes to U.S. trade policy, such as withdrawal from NAFTA, were among the most prominent of Donald Trump’s campaign promises. Now that he is the President-elect, it is most appropriate to examine current law to ascertain whether he can deliver on those campaign promises.
On December 9, 2016, Michigan Governor Rick Snyder signed landmark autonomous vehicle legislation, placing Michigan as one of the most manufacturer-friendly states to develop and test driverless systems. As we noted in our August 11, 2016 Alert, this legislation is unique in that it allows testing of vehicles without the presence of driver, a direction that will significantly impact the mobility economy.
President Obama signed the “21st Century Cures Act” on December 13, 2016, which included a critical change to the Internal Revenue Code (“Code”) and the Employee Retirement Income Security Act (“ERISA”) affecting certain small employers. Specifically, employers that are exempt from the “pay-or-play” rules of the Patient Protection and Affordable Care Act (the “ACA”) may now offer employees a “qualified small employer health reimbursement arrangement” (“QSEHRA”) for plan years beginning after December 31, 2016.
NHTSA's Proposal to Mandate that Automobile Manufacturers Incorporate Vehicle-to-Vehicle Capabilities into New Cars
What NHTSA is Proposing
On December 13th, NHTSA issued a Notice of Proposed Rulemaking (NPRM) to establish a new Federal Motor Vehicle Safety Standard (FMVSS) that would require automobile manufacturers to incorporate vehicle-to-vehicle (V2V) communications capabilities into all new light vehicles (https://www.nhtsa.gov/About-NHTSA/Press-Releases/nhtsa_v2v_proposed_rule_12132016). The NPRM would also proposed standardized Basic Safety Messages (BSM) communicated between vehicles to ensure interoperability. NHTSA does not propose initially to mandate or specify particular applications using the V2V communications (such as Intersection Movement Assist (IMA) and Left Turn Assist (LTA)), but would allow the industry to develop and deploy particular safety applications.
Given the lack of specificity in the Trump campaign with regard to telecommunications policies, trying to forecast the effect of his election on telecommunications regulation involves a fair measure of speculation. But there are some impacts that appear to be fairly clear. Although the Federal Communications Commission (FCC) is ostensibly an independent agency, the influence of the White House was very significant, as evidenced by the FCC's actions in the Open Internet proceeding (also referred to as "Net Neutrality") of reclassifying Internet access service as a Title II telecommunications service after a request to do so by President Obama. The influence of the tech industry on the Obama Administration was significant, and the White House's bias in favor of policies championed by Silicon Valley was embraced by the FCC, as evidenced by a number of rulemaking proceedings.
Recent U.S. immigration policy hasn’t created many winners, but one group that qualifies to some extent are the thousands of children brought into the United States illegally by their parents, often referred to as DREAMers. Unfortunately, they may quickly become losers if President-Elect Trump decides to undo DACA -- the Deferred Action for Childhood Arrivals program.
Businesses have something truly to be thankful for this year, well, at least for now. On Tuesday, November 22, 2016, the federal district court for the Eastern District of Texas issued a preliminary injunction enjoining the Final Overtime Rule on a nationwide basis. The Final Overtime Rule, which was projected to affect over four million workers, was set to go into effect on December 1, 2016. But, by yesterday’s court’s ruling, the Department of Labor is now enjoined from implementing and enforcing the Final Overtime Rule.
President-elect Donald Trump stated during his campaign that he would renegotiate or withdraw from the North American Free Trade Agreement (“NAFTA”). He cites the United States’ $58-billion trade deficit with Mexico and refers to examples like Ford’s recent decision to build a plant in Mexico as evidence that NAFTA has displaced jobs that otherwise would have remained in the United States. The President-elect has also promised to raise tariffs on trade partners, potentially ushering in a trade war and paving the way for protectionist U.S. policies that critics argue could diminish U.S. influence.
Companies Consider Negotiating Assurances with UK Trade Ministry or Local Governments
On Sunday, October 2, the United Kingdom’s (UK) Prime Minister, Theresa May, announced plans to trigger Article 50 of the Treaty of Lisbon by the end of March, 2017, starting the two-year clock for withdrawal of Britain from the European Union (EU) . May identified the goal of making Britain a “sovereign nation again,” in control of its own immigration and with its own laws. As the world’s fifth largest economy, Britain will become “truly global,” May said, looking beyond Europe as its largest trade partner and naming China, India, Canada, Mexico, South Korea, Australia, New Zealand and Singapore among the nations prepared to sign major free trade deals with the UK.
The Internal Revenue Service has recently announced cost-of-living adjustments applicable to dollar limitations for retirement plans (and other items) for 2017. Many of the retirement plan limitations will change for 2017 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged because the increase in the index did not meet the statutory thresholds that trigger their adjustment.
November marks the month new safety regulations in Mexico will enter into effect for light motor vehicles.
Responding to growing threats to vehicle safety from cybersecurity vulnerabilities, NHTSA released guidelines for cybersecurity best practices for motor vehicle OEMs, suppliers and aftermarket manufacturers.
On October 24, 2016, the National Highway Traffic Safety Administration (NHTSA) announced its non-binding guidance titled “Cybersecurity Best Practices for Modern Vehicles” (Guidelines).
In the wake of the well-publicized Jeep hacks (summer 2015) and last Friday’s DDoS attack against the managed DNS infrastructure of Dyn, the need to protect the safety of drivers and passengers against cyber-perils has never been greater. Acknowledging its responsibilities under the Motor Vehicle Safety Act (Act), NHTSA issued this guidance to promote cybersecurity practices that ensure vehicle systems and related software are designed free of unreasonable risks to motor vehicle safety. To date, NHTSA has used its enforcement authority to recall nearly 1.5 million vehicles due to cybersecurity vulnerabilities deemed potential safety risks under the Act.
Employer Beware: Antitrust Enforcement Agencies Set Their Sights on Anti-Competitive Hiring and Compensation Agreements
The Department of Justice Antitrust Division (DOJ) and the Federal Trade Commission (FTC), the two federal agencies responsible for enforcing the antitrust laws, have issued a “Guidance” document for HR Professionals, outlining the types of compensation and hiring agreements that the enforcement agencies will challenge as violations of the antitrust laws. The Guidance document does not represent a change in antitrust law, but it does represent a clear signal that the agencies are placing unprecedented importance on policing such agreements.
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was passed in 2015 and is scheduled to take effect on January 1, 2017. Final regulations are anticipated in November, 2016 leaving little time for provider implementation. The stated purpose of MACRA was to end the sustainable growth rate formula, establish a new framework for rewarding health care for providing better care and combine existing quarterly reporting programs into one system. These three changes are known as the “quality payment program” (“QPP”).
The U.S. Department of Health and Human Services, Office of Civil Rights (“OCR”) has raised the stakes for Covered Entities and Business Associates making it clear that it will no longer treat small breaches as a low priority. On August 18, 2016, OCR announced its new Initiative to increase the investigative and enforcement efforts in its Regional Offices concerning small breaches (those effecting less than 500 individuals).
Every fall, many employers which sponsor welfare benefit plans turn their attention to benefit design for the coming year. As a result, the open enrollment season provides the perfect opportunity to ensure current welfare benefit legal requirements are kept up to speed: plan documents and summary plan descriptions; annual notices; and nondiscrimination testing.
On December 1, 2016, the Department of Labor’s controversial overtime pay regulation, which revises the overtime pay exemption for white-collar employees, is scheduled to take effect. However, on September 20, 2016, two lawsuits were filed in a federal court in Texas in an effort to invalidate the regulation and to enjoin its implementation. A group of twenty-one states, including Michigan, filed one of the lawsuits, and a group of business groups, including the U.S. Chamber of Commerce, filed the second lawsuit.
The US Department of Transportation, in a potential departure from the self-certification regime of the past, outlined a significantly expanded role for the Agency in its September 20, 2016 Federal Autonomous Vehicle Policy. In an unprecedented move, the Agency issued a detailed policy statement that includes:
- Tools that would lead to the addition of registration and certification with NHTSA for autonomous vehicle systems;
- Vehicle performance guidelines;
- A model state policy;
- A summary of NHTSA’s current regulatory tools; and
- New tools and authorities.
Stakeholder participation in the sixty-day public comment period for these proposed guidelines and policies is critical, as the Agency views this release as a starting point to advance safety technology.
A little while ago, we issued an alert with regard to a Petition for Rulemaking filed by two “public interest” advocacy groups – Public Knowledge and the Open Technology Institute at New America (https://www.butzel.com/client-alert-detail/Public-Interest-Groups-Seek-to-Halt-Further-Deployment-of-Connected-Car-Technologies.html). The Petition requested that the FCC adopt several rules that would govern the Dedicated Short Range Communications (DSRC) service that is being deployed in support of connected car technologies and services. The Petition seeks (1) new FCC rules governing privacy and cybersecurity of DSRC services; (2) a prohibition on any services other than safety-of-life in the DSRC spectrum; and (3) a halt to any DSRC deployment until the new, proposed rules are adopted. The FCC put the Petition out for comment, and the comments and reply comments have come in.
On September 1, 2016, bankruptcy proceedings were commenced in South Korea against Hanjin Shipping Co., Ltd. (“Hanjin”). Hanjin is a major South Korean shipping firm and accounts for about 7.8% of U.S. trans-Pacific trade volume. As a result of Hanjin’s insolvency, port terminal operators, railroads, trucking companies and other logistics handlers ceased handling Hanjin’s containers, and a large number of Beneficial Cargo Owners (the owners of the goods being shipped by Hanjin) were, or have been unable to obtain their goods. Suppliers who operate in “Just-in-Time” industries risked customer shutdowns, while retailers and consumer goods companies faced inventory shortages as the holiday season approaches.
The United States Department of Treasury recently published proposed regulations to Section 2704 of the Internal Revenue Code. Section 2704 was initially enacted to impose certain restrictions and limitations upon transfers of interests in family-controlled business entities among family members.
While the federal government has been busy creating thousands of pages of regulations to enforce the Affordable Care Act, one of our county governments has been busy developing a program of its own to improve the health of residents in Oakland County. “ECHO” is the Energizing Connections for Healthier Oakland which has been in development for the last several years. The following will explain several aspects of ECHO. The balance will be addressed in a future Health Alert, but feel free to go to the ECHO website.
In the struggle to balance innovation and product safety, the global community is reacting to recent events by either aggressively pushing for autonomous legislation or hitting the “pause button” until finalized rules of the road are created. At the same time, the State of Michigan is cruising ahead, seeking to take the lead in autonomy with recent approval of a $17 million loan for the construction of a research facility at Willow Run.
Founding principles of the EU were open borders for trade and the movement of people. The UK’s decision to leave the European Union (Brexit) will affect all aspects of trade with companies that do business with the UK and with London as the clearinghouse for the Euro.
Highlights Government's Efforts to Combat Fraud
In what has come to be an expected issuance every six months, on Friday, July 29, 2016, the Department of Health & Human Services (HHS), Centers for Medicare & Medicaid Services (CMS) released Notice of its renewal of the 6-month moratorium on new provider enrollment for Home Health Agencies (HHAs) and Part B Non-Emergency Ground Ambulance Suppliers, to be effective that same day (you can see our previous alerts on this moratorium here). In a surprising twist, however, HHS has changed the Moratorium’s reach by making the freezes state-wide, as opposed to the limited geographical areas affected in the past. New HHA enrollments are now on hold in the following states: Florida, Illinois, Michigan, and Texas.
The FCC recently issued a Public Notice (DOC-340450A1.pdf) seeking comments on a Petition for Rulemaking filed by two “public interest” advocacy groups – Public Knowledge and the Open Technology Institute at New America. The Petition requests that the FCC adopt several rules that would govern the Dedicated Short Range Communications (DSRC) service that is being deployed in support of connected car technologies and services. The Petition seeks (1) new FCC rules governing privacy and cybersecurity of DSRC services; (2) a prohibition on any services other than safety-of-life in the DSRC spectrum; and (3) a halt to any DSRC deployment until the new, proposed rules are adopted.
In a decision which may have a dramatic impact on employers utilizing the services of staffing companies or temporary agencies, the National Labor Relations Board determined in Miller & Anderson, Inc., 364 NLRB No. 19 (July 11, 2016) that a union may seek a mixed bargaining unit consisting both of temporary employees jointly employed by a “user” employer and a staffing company, together with solely employed regular employees of the user employer; and can do so even if either the user employer or the staffing company objects to the combined unit. In so finding, the Board reversed its decision in Oakwood Care Center, 343 NLRB 659 (2004), which had held that the consent of both employers was required for what was essentially deemed a multi-employer bargaining arrangement.
The National Highway Traffic Safety Administration (NHTSA) is charged by Congress with promoting safety on U.S. roads. While mandating minimum vehicle safety performance levels through federal standards was the original focus of congressional intent, monitoring vehicle-use trends for signs of potential safety defects has become a major, if not the principal, function of the agency.
This is a joint health alert with Fortium Partners. Fortium is engaged in assisting companies to solve cybersecurity and other business challenges. They are a national company with partners in many cities in the United States. Many of these partners are former CIOs.
In the wake of major attacks on universities, hospitals and businesses, the risk of ransomware, phishing, and other cyberattacks has never been greater. In fact, cybercrime is big business. American companies lose approximately $250 billion a year due to intellectual property theft and $114 billion directly due to cybercrime.
Section 1557 of the Affordable Care Act (ACA) and related regulations prohibit discrimination on the basis of race, color, national origin, sex, age, or disability, by any health program or activity that receives federal funding or assistance from the federal Department of Health and Human Services (HHS) or that is administered by an executive agency.
Pursuant to the Patient Protection and Affordable Care Act and corresponding regulations, the Health Insurance Marketplaces (also known as the “Exchanges”) will begin to notify certain employers if an employee was determined eligible for advance premium tax credits because the employee attested that he or she was neither enrolled in employer sponsored coverage nor eligible for employer coverage that is affordable and meets the minimum value standard . The Exchanges anticipate sending notices in batches throughout 2016. The Exchanges will send notices to employers if the employee received the premium tax credit for at least one month in 2016 and if the Exchange has an address for the employer.
Health Care Providers, Insurers, TPAs
Section 1557 of the Affordable Care Act (ACA) and related regulations prohibit discrimination on the basis of race, color, national origin, sex, age, or disability, by any health program or activity that receives federal funding or assistance from the federal Department of Health and Human Services (HHS) or that is administered by an executive agency.
It’s Election Season Again (Not That You Could Avoid it!). Some Do’s and Don’ts for Exempt Organizations Participating in Public Policy and Political Activities
In our May 6 client alert, we described generally the restrictions on tax-exempt organizations that want to participate in public policy or political activities. As we noted in that alert, those restrictions are subjective and very fact-specific, and they apply differently to different types of tax-exempt organizations.
New Federal Trade Secrets Law Offers the Automotive Industry Additional Arsenal to Fight Trade Secret Theft
There is a growing rise in trade secret theft in the automotive industry. Fast-paced advances in automated and connected car technologies, as well as other manufacturing and technology advances, coupled with a global marketplace and interconnected supply chain makes the automotive industry ripe for trade secret theft.
The FCC is Seeking to Refresh the Record with Respect to Proposals for Sharing of the Spectrum that had been set aside for Vehicle-to-Vehicle Communications - Comments are Due July 7th
Software development companies breathed a collective sigh of relief in May of 2016.
The Federal Circuit reversed a Central District of California decision that held all patent claims to a “self-referential” database as not patent eligible under 35 U.S.C. §101. The Federal Circuit remanded the case for further proceedings by patent holder Enfish for its ADO.NET product.
False, inaccurate and defamatory online reviews: How to take off the gloves and fight back legally and ethically
Ok. You asked for it and you got it: You implemented review based websites, customer portals, message boards, blogs, social media, chat rooms, bulletin board posts, and other applications which enable customers and users to communicate with your business and each other by posting information, comments, messages, images, etc. All you want is for everyone to be happy!!
We have previously issued a Health Alert on the specific issue of Telemedicine. One of the obstacles in providing telemedicine services has been reimbursement. In order to address this issue at least, in part, we have teamed with Kathy Jo Uecker*. Kathy is very knowledgeable in reimbursement and was pleased to assist in providing information on how providers can be paid for these services.
Many employers encourage employee participation in a wellness program. New final regulations were just issued that change the rules for employers offering employee wellness programs. Changes include expanded restrictions on wellness incentives, additional notice requirements, new prohibitions on employer actions, and new confidentiality requirements.
The desire by physicians and others to leverage their services and those of their staff as well as the consumer demand for greater access to have information about their health is leading the push for patient portals. This push is coming from many sources: patients, health care providers, insurers and regulators. Patient portals include any type of secure online website that provides access to health information or health care professionals from anywhere using an Internet connection. Patient portals can provide any number of benefits including by example, better patient-provider communication, improved workflow, benefits and coverage, making payments, a customized patient engagement and experience, self-service care, remote management of care, behavior changing preventative care and chronic care management, improved quality, meeting various “meaningful use” incentive requirements, research, coordination of care across providers and many other benefits.
On May 18, 2016, the Department of Labor issued its final regulation revising the overtime pay exemption for white-collar employees. It issued the proposed rule in July 2015 and, since September 2015, had reviewed over 270,000 comments from businesses, labor unions, and other members of the public about the proposed regulation.
This morning, in a short unsigned opinion read from the bench by Chief Justice John Roberts, the U.S. Supreme Court vacated and remanded seven Affordable Care Act (ACA) contraceptive mandate cases. Zubik v. Burwell, Case No.14-1418 et al. Bringing its total ACA mandate remands to 13, the Court also issued orders today simultaneously vacating and remanding six additional ACA contraceptive mandate cases to their respective federal Courts of Appeal.
Nearly two weeks ago Butzel Long was one of the first law firms in the nation to announce the passage by both chambers of Congress of the Defend Trade Secrets Act of 2016 (the “DTSA”). The DTSA passed with overwhelming support in both houses. Yesterday, President Obama signed the DTSA into law, and the Act is now effective. Below is a recap of what is new and what every company should be looking to do in light of this new law. Specifically, there are new provisions that must be written into every non-compete or other restrictive covenant signed by any employees. Butzel Long can help keep your company up to date and in conformance, and in doing so keep your assets protected.
It’s Election Season Again (Not That You Could Avoid it!) and Time to Revisit the Rules on Tax-Exempt Organizations Participating in Public Policy and Political Activities
In an election year, it’s worth nonprofit organizations reviewing the rules about public policy, lobbying, and political activities. Tax exempt nonprofit organizations must be careful about the types of public and political activities they undertake, but a nonprofit organization doesn’t have to give up the ability to take positions on public issues or to take action to influence public policy merely because of its exempt status. Federal tax limits on the political activities of tax-exempt organizations are, in fact, often narrower than many people lawyers think. Tax-exempt organizations have the right to engage in public debate and make their positions on important issues known, and even 501(c)(3) charities, which are the most heavily regulated, may engage in some political activities that further their tax-exempt, charitable purposes.
It is not often that Congress works together, let alone with an overwhelming consensus. But Congress did just that in passing the Defend Trade Secrets Act of 2016 (the “DTSA”) in both houses.
In what has become an annual event, during his remarks to over 3,000 healthcare compliance professionals at the HCCA Compliance Institute, on April 18, 2016, Department of Health and Human Services Inspector General Daniel Levinson announced a major regulatory development. This year, Mr. Levinson announced the issuance of revised Guidance for the imposition of permissive exclusions under the OIG’s exclusion authority. The new Guidance, which appears on the OIG’s website and replaces the 1997 version, provides new insight on what the government will look at when deciding to impose an exclusion under section (b)(7) related to civil and administrative healthcare fraud settlements. Under section (b)(7), the OIG presumes that exclusion is appropriate for some period of time for those that have defrauded Medicare or any other Federal healthcare program. The Guidance is designed to identify those circumstances that pose a lower risk to the Federal healthcare programs to rebut this presumption for exclusion, as well as those higher risk areas that support heightened sanctions, including exclusion.
On January 11, 2016, the Federal Trade commission (FTC) and the Department of Justice (DOJ) released a Joint Statement regarding legislation in South Carolina House Bill 3250 (the “Bill”) which would narrow the application and ultimately repeal South Carolina’s Certificate of Need (“CON”) laws. CON laws regulate beds allowed for hospitals and nursing homes as well as numerous other health services such as CT scans, MRIs and surgery centers.
In recent days, hospitals in the Washington/Baltimore corridor have been hit by a spate of ransomware attacks, and there is no reason to believe that these attacks will not expand to include hospitals and other healthcare providers’ systems elsewhere, including in Michigan. Indeed, US-CERT, the U.S. Government’s Computer Emergency Readiness Team, has issued an “Alert” to warn hospitals and other healthcare facilities across the country of the growing threat. While cyber criminals have been using variants of ransomware to extort money for a number of years, the emergence of large-scale targeting of hospitals is a relatively recent development that is particularly pernicious. After all, the effects of a ransomware attack -- which infects a computer network and restricts access to it until a ransom is paid to unlock it -- can be, literally, a matter of life and death because such attacks can block access to the current medical records of critically ill patients. Ransomware attacks also threaten the continuity of operations of healthcare facilities, which could lead to even more horrific results.
Over the last decade, 21 states (including New York and California) have created health claims databases and have imposed substantial and costly health care data reporting requirements upon public and private employers, health care plans, health care insurers, and third-party administrators that provide or pay for health care services. In recent years, 18 more states have moved towards creating such databases (including Michigan, Illinois, and Ohio).
Earlier this year, the Department of Transportation (DOT) and the National Highway Traffic Safety Administration (NHTSA) issued a Policy Statement earlier this year seeking to foster life-saving automated vehicle technologies: http://www.nhtsa.gov/About+NHTSA/Press+Releases/dot-initiatives-accelerating-vehicle-safety-innovations-01142016
For the First Time, EEOC Sues Private Employers for “Sex Discrimination” Based on Sexual Orientation
On March 1, 2016, the Equal Employment Opportunity Commission (EEOC) filed two lawsuits against Baltimore and Pittsburgh based companies claiming those employers discriminated against employees based on sexual orientation. This marks the first time that the EEOC has sued a private employer under the theory that “sexual orientation” discrimination is a form of “sex discrimination.” This lawsuit forms a part of the EEOC’s continuing effort to seek judicial recognition for its argument that sexual orientation discrimination is unlawful under Title VII of the Civil Rights Act of 1964.
This alert is different from others that we have previously provided – it is about the future of one of the innovative aspects of health care technology. Specifically, we wanted to alert our subscribers to some of the telemedicine issues, trends and opportunities. We are co-authoring this specific alert with Susie Vestevich, Esq. an advocate for Michigan-based JEMS Telehealth, manufacturer of emergent telemedicine hardware/software solutions. *JEMS provides the available technology to obtain care for patients in emergency situations. Providing quick information to medical professionals can reduce the recovery times for strokes, heart attacks, and other conditions.
Even prior to the passage of the Affordable Care Act, the return to CMS of overpayments to providers was an important issue for healthcare providers. With the passage of ACA, specifically Section 6402(a), repayment became required under a sixty (60) day rule. On February 11, 2016, CMS issued the final rule, addressing the key issues of when the clock starts ticking on the sixty (60) day repayment period, and how far back CMS can go to impose the sixty (60) day reporting period.
Now is the Time to Review Michigan Property Tax Assessments to Avoid Excessive Property Tax Payments
Michigan property owners will be receiving their real property tax Notice of Assessment form within the next few weeks. Many property owners may find that they are being assessed using inflated taxable values if they have not appealed their property taxes over the last several years.
On February 2, 2016, the U.S. Department of Health & Human Services, Centers for Medicare and Medicaid Services (“CMS”), published the fourth 6-month extension of its moratorium freezing enrollment of new Home Health Agencies (“HHA”) and Ambulance Suppliers in federal healthcare programs, including Medicare, Medicaid, and CHIP. The initial moratorium was effective January 30, 2014 and was extended an additional 6 months in July 2014 and in January 2015 and July 2015.
A Changing Landscape: The federal government has made clear that its expectations for effective business ethics and compliance programs have changed.
Late yesterday, the U S Supreme Court rejected a national group health plan’s quest for reimbursement of $120,000 in plan-paid medical expenses from a participant’s general assets, after the participant (injured in an auto accident) spent the $500,000 in settlement monies he had received from the driver at fault. Montanile v. Board of Trustees of the National Elevator Industry Health Care Fund, Sup. Ct. No. 14-723 (1.20.2016).
An ounce of prevention is worth a pound of cure
~ Benjamin Franklin
When every dollar counts for an organization, particularly in a fragile recovering economy, modest proactive compliance expenditures can reduce the risk of substantial fines and costs. With the New Year, healthcare providers and most private and public employers face a new round of compliance efforts under a seemingly “alphabet soup” of regulations and regulators: HIPAA, ACA, ERISA, IRS (Tax Code), CMS, HHS, DOL, SEC and countless others. With an apparent never-ending to-do list, maintaining your organization’s commitment to compliance can be daunting.
Effective January 1, 2016 the minimum wage in Michigan will increase to $8.50 per hour. This is the second of the graduated increases in the minimum wage enacted in 2014 by the Michigan Legislature.
On November 2, 2015, the Department of Health & Human Services (“HHS”), Office of Inspector General (“OIG”) issued the 2016 Work Plan detailing new and ongoing OIG audits, evaluations, and certain legal and investigative initiatives related to HHS programs and operations. In its 80-page Work Plan, the OIG details sixty-eight (68) New or Revised Initiatives that it will add to its ongoing reviews. With over 180 identified initiatives, the Work Plan is a must read for anyone participating in HHS-related programs, as it provides a glance at the current focus of the OIG 2016 to assist healthcare providers and suppliers in their compliance efforts.
The Internal Revenue Service has recently announced whether there will be cost-of-living adjustments applicable to dollar limitations for retirement plans (and other items) for 2016. Many of the limitations will not change for 2016 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment.
Using telephone, text messages or FAX messages to communicate with your patients just got a little less risky, but you have to do it “just right” to avoid violations of the Health Insurance Portability and Accountability Act (“HIPAA”) and the Telephone Consumer Protection Act (TCPA). This has important operational implications for HIPAA covered entities—providers, insurers, and your business associates. Here’s how.
Every fall, many employers which sponsor welfare benefit plans start to turn their attention to renewing benefits for the upcoming year. As a result, the open enrollment season provides the perfect opportunity to ensure certain welfare benefit legal requirements are kept up to speed: plan documents and summary plan descriptions; annual notices; and nondiscrimination testing.
On August 31, 2015, EPA proposed a rule pursuant to the Resource Conservation and Recovery Act (RCRA) to create new management standards for discarded pharmaceuticals which are regulated as hazardous wastes. The rule will apply to pharmacies, hospitals, doctors’ offices and other health care facilities as well as reverse distributors and treatment, storage and disposal facilities that handle hazardous pharmaceuticals.
Passenger Vehicle and Light Truck Tires Antidumping and Countervailing Duty Cases Suggest Opportunities for Automotive Parts Suppliers
Antidumping and countervailing duty petitions are a powerful weapon for U.S. industries that find themselves materially injured by dumped or subsidized imports This was illustrated most recently on August 10th, when the US Department of Commerce issued a final order imposing countervailing duties on certain Passenger Vehicle and Light Truck Tires (“PVLT Tires”) imported from China1.
Question: Is the Department of Labor going to make more employees eligible for overtime premium pay?
Answer: Yes. The DOL has proposed revised Fair Labor Standards Act regulations that would convert many employees who are currently “exempt” under the executive, administrative, and professional (EAP) exemptions into “non-exempt” employees.
In December 2012, the State of Michigan enacted separate right-to-work statutes for the private sector, Public Act 348, and the public sector, Public Act 349. Michigan became the 24th right-to-work state at that time. Since then, labor unions have filed lawsuits to invalidate the right-to-work statutes.
Valuation discounts are commonly used in business planning. When transferring an interest in a corporation, LLC or partnership, the value of such interest can be discounted if it is a minority interest in the business or if there are any restrictions imposed on the owner in making subsequent transfers of the interest in the business. In the context of estate planning, valuation discounts play an important role in limiting the value of amounts transferred to family members through gift or sales transactions when using family LLCs or family limited partnerships.
The Michigan Court of Appeals in Pransky v. Falcon Group Inc. held that under Michigan’s Uniform Securities Act, MCL 451.2101 et seq. (“Securities Act”), finders, as defined in the Securities Act, are not required to register with the state as a “broker-dealer,” “agent” or “investment advisor.” While the Pransky Court seems to give finders a reason to rejoice, finders should remain wary since the holding in Pransky is severely limited by the facts of the case. Further, at the federal level, the Securities and Exchange Commission (“SEC”) has maintained its position that transaction-based compensation, the most typical compensation arrangement for finders, is a hallmark of broker-dealer status.
On July 28, 2015, the U.S. Department of Health & Human Services, Centers for Medicare and Medicaid Services (“CMS”), will publish the third 6-month extension of its moratorium freezing enrollment of new Home Health Agencies (“HHA”) and Ambulance Suppliers in federal healthcare programs, including Medicare, Medicaid, and CHIP. The initial moratorium was effective January 30, 2014 and extended an additional 6 months in July 2014 and again in January 2015. A similar moratorium has been in place for HHAs in areas surrounding Chicago and Miami since July 2013.
Technological innovation and the world of connectivity are moving rapidly, leaving legislators and proposed legislation far behind. The “Internet of Things”—from smart refrigerators to gadgets that sit aside our foreheads and zap us to be restful or alert—includes our increasingly “smart” cars. Automobiles are now mobile devices capable of transmitting and receiving data, whether running or not. Whether a component manufacturer to an EOM or a digital provider streaming content into the vehicle, you are now on notice: new concerns surround vehicle hacking that may put drivers—and vehicle suppliers—at risk.
EEOC Formally Includes Sexual-Orientation Discrimination as Part of “Sex Discrimination” Under Title VII; Michigan Treasury Issues Guidance on Same-Sex Spousal Benefits
The Equal Employment Opportunity Commission has issued a formal decision in a federal sector case finding that discrimination based on sexual orientation is a form of illegal “sex discrimination” under Title VII of the Civil Rights Act of 1964. The case, Complainant v. Foxx, E.E.O.C., No. 0120133080, issued July 16, 2015, found that “[s]exual orientation discrimination is sex discrimination because it necessarily entails treating an employee less favorably because of the employee's sex.” Title VII applies to employers with 15 or more employees.
Supreme Court Same Sex Marriage Decision and DOL Overtime Expansion – What Employers Need to Know Today
On June 26, 2015, the U.S. Supreme Court decided the landmark case of Obergefell v. Hodges. The case involved whether the Constitution requires a state to issue a marriage license to two people of the same sex and must recognize a same-sex marriage performed out-of-state. The Court held that “same-sex couples may exercise the fundamental right to marry in all States. It follows that the Court also must hold-and it now does hold-that there is no lawful basis for a State to refuse to recognize a lawful same-sex marriage performed in another State on the ground of its same-sex character." Thus, the Court has ruled that same sex marriage is now legal in all states. Given that Michigan previously banned same-sex marriage, this ruling will impact HR administration moving forward.
Within a one week time period, two different decisions, issued by two different governing entities, reached two different conclusions as to whether the tribal entity was subject to the National Labor Relations Act (“NLRA”). We will address each of these decisions in chronological order.
In June 2015, the Occupational Safety and Health Administration (OSHA) published the Guide to Restroom Access for Transgender Workers setting forth the “core principle” that all employees, “including transgender employees, should have access to restrooms that correspond to their gender identify.” In other words, if a company employed Caitlyn Jenner, it would have to allow her to use the women’s restroom.
These days businesses large and small are grappling with the thorny issue of whether they need to buy insurance against data breaches and other kinds of “cyber liability,” and, if so, what type of coverage to buy—and with what coverage limits. That task will be further complicated by inevitable judicial decisions interpreting new and unfamiliar language in cyber policies. The first round of those cases are beginning to land in court, giving insurance lawyers an inkling of the type of coverage disputes likely to emerge from this relatively new type of coverage.
The US Supreme Court Weighs In
Vacating the Federal Circuit’s judgment and remanding for further proceedings, the US Supreme Court held (6-2) that a defendant’s good faith belief that a patent is invalid is not a defense to induced infringement.
The Americans with Disabilities Act (“ADA”) generally prohibits employers from making disability-related inquiries or requiring medical examinations. A common exception to that general prohibition permits voluntary medical examinations as part of an employee health program. The Equal Employment Opportunity Commission (“EEOC”) recently issued a proposed update to its regulations regarding employer wellness programs. The EEOC’s proposed rule addresses: (1) the extent to which employers may offer incentives to employees to participate in wellness programs; and (2) whether employers that comply with regulations implementing the Health Insurance Portability and Accountability Act (“HIPAA”) will also be in compliance with the ADA.
Speaking at the annual Health Care Compliance Association (HCCA) Compliance Institute on Monday, April 20, 2015, Department of Health & Human Services (HHS) Inspector General Daniel Levinson announced the issuance of a new tool for healthcare boards, entitled Practical Guidance for Health Care Governing Boards on Compliance Oversight, a collaborative effort of HHS, the American Health Lawyers Association, the Association of Healthcare Internal Auditors and HCCA.
Starting in 2019, MACRA (the “Act”) creates incentives to pay physicians based on performance rewarding doctors who hit quality targets and whose patients get healthier. The Act also provides a 0.5% increase on physician Medicare fees over the next four (4) years. Congress passed and the President has signed the Act . The Act repeals the former Sustainable Growth Rate (SGR) formula for physician reimbursement and replaces it with a new approach to Medicare physician payments. Details on this fix to physician reimbursement are sketchy, so regulations will be needed to provide the details. The AMA and AARP both supported the permanent elimination of the SGR which never worked, and had been temporarily “fixed” or delayed many times over the years.
Congress just returned Monday. Much has happened this past week.
On March 30, 2015, the Obama administration proposed significant changes to NHTSA rights and OEM and Supplier obligations with respect to recalls. The proposal, included in the Generating Renewal, Opportunity, and Work with Accelerated Mobility, Efficiency, and Rebuilding of Infrastructure and Communities throughout America Act (the “GROW AMERICA Act”), reveals “improved tools to protect the public from dangerous vehicle and tire defects. ” The administration’s proposal nearly triples the current budget of the Office of Defects Investigation (“ODI”) in its efforts to monitor data, find defects earlier and conduct investigations of vehicles with suspected defects. Further, several key changes appear in the draft legislation:
Opting not to list the northern long-eared bat as endangered as originally proposed in its October 2, 2013 proposed rule, the U.S. Fish and Wildlife Service (F&WS) instead listed the northern long-eared bat as “threatened”. Facing a deadline for the listing, the F&WS also issued an interim 4(d) rule providing for the incidental take exemptions as originally proposed, while opening the comment period to consider additional exemptions down the road in a final rule.
The United States Supreme Court issued a 52-page decision yesterday in Young v. United Parcel Service, Inc., clarifying an employer’s obligation to accommodate pregnant workers. A divided Supreme Court ruled that pregnant workers can claim the same accommodations that their employers grant to large numbers of workers who have similar but non-pregnancy related restrictions.
The Supreme Court Weighs In
Reversing the Eighth Circuit, the Supreme Court held that issue preclusion applied to this trademark matter. The district court is bound by the holding of the administrative body of Trademark Trial and Appeal Board (TTAB). In particular, whether Hargis’s Sealtite was “confusingly similar” to B&B’s registered trademark Sealtight had been decided affirmatively by the TTAB, and was not available for re-litigation in the courts.
Blue Cross Blue Shield of Michigan Continues to Fight "Hidden Fees" Suits Despite Major Loss in Court of Appeals
Under the Sixth Circuit's Hi-Lex decision, hundreds of current and former self-insured customers of BCBSM may be entitled to reimbursement of unlawful hidden fees.
BCBSM is relying on ERISA's statute of limitations to stem the tide of lawsuits.
Current and former self-insured customers of BCBSM should immediately determine if they were charged hidden fees and, if so, how much time they have left under ERISA’s statute of limitations to recover those fees.
The Family Medical Leave Act (“FMLA”) provides leave rights for employees and, in various situations, provides for leave rights relating to family members, including an employee’s “spouse”. Currently, the Department of Labor (“DOL”) FMLA regulations define “spouse” as a husband and wife as defined for purposes of marriage by the laws “in the state where the employee resides.” Effective March 27, 2015, the regulatory definition of “spouse” will change. Going forward, the validity of a marriage for FMLA purposes will be determined based upon the laws of the “place of celebration” of the marriage rather than the location where the employee resides at the time he or she requests FMLA leave.
In a message to the Michigan Legislature and the citizens of Michigan last week, Governor Rick Snyder set forth his vision and agenda for guiding Michigan’s energy policy for the next 10 years. Citing a critical need to prevent widespread outages due to lack of supply as aging coal plants are taken out of service, Snyder’s vision puts significant emphasis on eliminating energy waste as a large part of the solution. Setting forth a number of “Calls to Action”, the Governor proposes:
On Tuesday, March 10, 2015, Sens. David Vitter (R-LA) and Tom Udall (D-NM) introduced long awaited legislation to reform the decades old Toxic Substances Control Act (TSCA) chemical regulation.
Recently, the Securities and Exchange Commission levied $16 million in penalties against Goodyear Tire and Rubber Company under the Foreign Corrupt Practices Act in consequence of bribes paid by Goodyear's subsidiary companies in Angola and Kenya between 2007 and 2011. In addition to the matter of its subsidiaries’ payment of bribes (and then booking those bribes as legitimate business expenses), the SEC faulted Goodyear (the parent company) for not having a Compliance Program adequate to prevent the illegal payments by its subsidiaries.
Michigan House Bill 4198, recently introduced by State Representative Lucido (R-Washington Township), doesn’t just severely restrict non-compete clauses in employment agreements, it seeks to ban them outright.
The U.S. Citizenship and Immigration Services has announced a new rule allowing certain spouses of H-1B worker to apply for employment authorization. The rule takes effect on May 26, 2015.
Michigan Employment Relations Commission Invalidates A Ten-Year Union Security Clause Designed To Circumvent The Right-To-Work Law Applicable To Public Sector Employers
In December 2012, Michigan enacted separate right-to-work statutes for both the private sector, Public Act 348, and the public sector, Public Act 349. But the right-to-work statutes did not take effect until March 28, 2013, and they permitted employers and unions to retain and enforce union security clauses that were contained in agreements before March 28, 2013. For that reason, before that March 28, 2013 effective date, labor unions, in both the private sector and the public sector, sought to negotiate lengthy extensions of the union security clauses, which require an employee to become and remain a union member as a condition of employment. The unions’ purpose was to delay the effect of the right-to-work law and, consequently, the ability of union members to discontinue their mandatory union membership under that law.
The Michigan Legislature recently enacted legislation outlining a property owner’s liability for the injury or death of a trespasser. Although the statute is technically “new,” the legal principals expressed by the legislature simply mirror those applied by Michigan courts for decades, developed through case law.
Recently, we were retained to represent a non-U.S. parent corporation which had encountered employee benefits difficulties due to its acquisition of two completely unrelated U.S. businesses. The difficulties arose due to a concept known as a “controlled group” – a concept unique to the employee benefits and tax arenas. First, we very briefly discuss the controlled group concept. Then we very briefly list some implications of entities being part of the same controlled group. We conclude by suggesting that when purchasing U.S. businesses, non-U.S. companies should retain employee benefits counsel to advise them on U.S. employee benefits issues.
In this world of connectivity, automobiles become one large mobile device, transmitting and receiving data whether running or not. Whether you are a component manufacturer or a digital provider streaming content into the vehicle, there are new concerns surrounding tracking and hacking that may put American drivers at risk.
In what might well be the beginning of a new wave of litigation arising out of the current epidemic of cyber breaches, Travelers Casualty and Surety Company of America has brought suit against Incognito Studios, a web designer, to recover payments Travelers paid to its insured, Alpine Bank, to cover losses caused by the breach of the bank’s confidential data by hackers. Travelers is suing as the assignee and subrogee of the bank. The Complaint alleges that the web designer was negligent by, among other things, not placing adequate anti-malware software on the bank’s server, not disabling one or more websites of other customers running on the same server, and failing to maintain adequate encryption of bank customer data.
Michigan labor unions have filed several lawsuits challenging the legality of Michigan’s right-to-work laws for the private sector and the public sector. One lawsuit filed by labor unions and some anti-right-to-work politicians claimed that the laws should be invalidated under Michigan’s Open Meetings Act. The OMA requires that meetings be “open to the public,” MCL 15.263, but does not define that phrase. On February 6, 2015, the Michigan Court of Claims, by Judge Deborah Servitto, dismissed the unions’ lawsuit in its entirety. The legality of the right-to-work laws, in other words, survived this union challenge under the Open Meetings Act.
CMS Continues to Freeze Out Home Health Agencies and Ambulance Suppliers in HEAT Locations with another 6-month Extension of Moratorium on New Enrollment
The deep freeze that has been sweeping across the nation is not the only chill in the air. On January 29, 2015, the U.S. Department of Health & Human Services, Centers for Medicare and Medicaid Services (“CMS”), extended for another 6-months the moratorium freezing enrollment of Home Health Agencies (“HHA”) and Ambulance Suppliers in federal healthcare programs, including Medicare, Medicaid, and CHIP. The Initial moratorium was effective January 30, 2014 and extended an additional 6 months in July 2014. A similar restriction has been in force in areas surrounding Chicago and Miami since July 2013.
The Federal Communications Commission recently issued a Policy Statement in which it announced a new methodology for assessing forfeitures (penalties) on service providers who fail to pay the annual federal regulatory fees and make timely contributions to the Universal Service Fund (USF), the Telecommunications Relay Service (TRS) Fund, and the cost recovery mechanisms for local number portability (LNP) and the North American Numbering Plan (NANP) collected by the Universal Service Administrative Company (USAC).
The current situation in the region of Syria and Iraq involving the Islamic State (ISIS) seems to worsen daily. The danger for America is very real, and extends beyond potential military hostilities or even terrorism. American businesses that export or are willing to export may be at heightened legal risk. Export Control regulations and related enforcement places a significant responsibility and associated risks on American individuals and companies. The penalties for export violations, both civil and criminal, can be (and often are) draconian; and “I didn’t know” has no weight as a defense or mitigating factor where penalties for exports or technology transfer violations are involved.
The Federal Circuit held that the term “molecular weight” was fatally indefinite, rendering a patent for making Copaxone (a drug for treating MS) invalid. In Teva Pharmacueticals USA, Inc. v. Sandoz, Inc., 574 U.S. __, __ (2015), the Supreme Court vacated the Federal Circuit’s judgment.
Recently, Chrysler published a new version, dated December 2014, of its Production And Mopar Purchasing Terms And Conditions ("New Terms"). The New Terms are not retroactive and apply only to the NAFTA region.
In a Final Rule published in the Federal Register on December 15, 2014, the National Labor Relations Board has issued new representation election rules which will significantly reduce the period between the filing of an election petition by a union and the holding of an NLRB election. The new procedures will seriously affect the ability of employers to effectively communicate a union-free message to their work force in the course of a union election campaign, and will require employers to be more proactive in their employee relations programs in order to maintain non-union status. The new rules are scheduled to take effect on April 15, 2015.
In a long-awaited and widely-expected ruling, the NLRB held that employee use of company email systems on non-work time for activities protected by the National Labor Relations Act must be permitted if employers have given employees access to their email systems in the course of their work. The decision expressly overturns the Board's 2007 Register Guard decision. The Board provided a narrow exception in the decision, but stated that the exception's use will be "rare." Purple Communications, 361 NLRB #126 (December 11, 2014).
Labor unions continue to challenge the 2012 Michigan right-to-work law in pending cases in state and federal courts. The legality of that Michigan law recently received an indirect boost from the Indiana Supreme Court, which upheld the 2012 Indiana right-to-work law that is very similar to the Michigan law.
The Internal Revenue Service has recently announced cost-of-living adjustments applicable to dollar limitations for retirement plans (and other items) for 2015. Many of the retirement plan limitations will change for 2015 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged because the increase in the index did not meet the statutory thresholds that trigger their adjustment.
Client Alert - Investment Management - SEC Adopts Final Dodd-Frank Definition of Accredited InvestorOn December 21, 2011, the Securities and Exchange commission ("SEC") adopted amendments to its rules in order to conform its definition of an "accredited investor" to the requirements of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). Release No. 33-9287, December 21, 2011, available at http://www.sec.gov/rules/final/2011/33-9287.pdf. The Dodd-Frank Act requires that the value of a person's primary residence be excluded from the net worth calculation used to determine the person's "accredited investor" status for purposes of determining eligibility for investing in certain securities offerings that are exempt from registration. The prior rule defined "accredited investor" to include a person with a net worth of $1 million, including the value of the person's primary residence.
Client Alert - Environmental - EPA Announces Changes to Boiler and Incinerator Air Pollution StandardsOn December 2, 2011, EPA announced proposed standards to address air emissions from existing and new boilers and commercial and industrial solid waste incinerators (CISWI).
Automation Alley Newsletter - New State Tax on Health Care Claims Affects Employer-Sponsored Health Plans
Overview of the New Law
The Michigan legislature approved a bill imposing a 1% tax on certain paid health care claims, for health care services and items beginning on or after January 1, 2012. Governor Snyder is expected to soon sign the bill into law. The tax is capped at $10,000 per individual per year, and expires January 1, 2014. The tax would apply to claims paid by an employer-sponsored group health plan, group and individual health insurance companies, stop loss insurers, and third party administrators of self-insured health plans, with limited exceptions. Insurers and third party administrators are permitted to pass along the associated tax to their employer-sponsored health plan clients.
Change is Coming
Change is coming to domain name registrations and it could affect you. The international group that has assigned domain names for many years now, the Internet Corporation for Assigned Names and Numbers (ICANN) has created a new .xxx domain. This is the result of many years of discussion on how to segregate and distinguish adult-oriented websites from all others. Scheduled for implementation in December 2011, the .xxx domain registration means that the owner of a domain name that also is a registered trademark such as trademark.com can be associated with a new domain name trademark.xxx without any awareness, permission, or consent. Potential XXX domain registrants see obvious opportunity in being associated with familiar and famous domain names that are also registered trademarks. Needless to say, this pending change and closing deadline has given trademark and service mark owners reason to worry that their goodwill and brand recognition may be associated with adult websites. Thankfully, mark owners can take action to prevent this association.
Client Alert - Employee Benefits - New State Tax on Health Care Claims Affects Employer-Sponsored Health Plans
Overview of the New Law
The Michigan legislature approved a bill imposing a 1% tax on certain paid health care claims, for health care services and items beginning on or after January 1, 2012. Governor Snyder is expected to soon sign the bill into law. The tax is capped at $10,000 per individual per year, and expires January 1, 2014. The tax would apply to claims paid by an employer-sponsored group health plan, group and individual health insurance companies, stop loss insurers, and third party administrators of self-insured health plans, with limited exceptions. Insurers and third party administrators are permitted to pass along the associated tax to their employer-sponsored health plan clients.
Aerospace & Defense Newsletter - “Implied Certification” of Government Contract Clauses Lead to False Claims Act Violations
AN OVERVIEW OF THE RECENT U.S. COURT OF APPEALS RULING IN UNITED STATES V. SCIENCE APPLICATIONS INTERNATIONAL CORPORATION AND WHAT IT MEANS FOR FEDERAL CONTRACTORS
Last December, amid holiday preparations and plans, the U.S. Court of Appeals for the District of Columbia Circuit decided a case that could potentially affect every federal contractor. The ruling affirmatively applies the “implied certification” rule giving federal contractors another serious complication in the government contracting process, with no clear or uniform standards on the specific issue. It highlights the importance of federal contractors having robust, effective contractor compliance systems to minimize the risk of severe penalties. The case is United States v. Science Applications International Corporation, 626 F.3d 1257 (D.C. Cir. 2010), and its holding has created a great deal of buzz within the government contracting community. It spread anything but holiday cheer.
Client Alert - Labor and Employment - FCRA Amendments Expand Adverse Action Notice Requirements for Employers Using Credit ScoresThe Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") amendments to the Fair Credit Reporting Act ("FCRA"), which became effective on July 21, 2011, affects any person (including an employer) that uses credit scores to take an adverse action against a consumer. ; These amendments potentially expand an employer's notice requirement obligations.
Client Alert - Taxation and Succession Planning - FBAR (Foreign Bank Account Reports) Amnesty Program Allows Taxpayers to Avoid Criminal and Severe Civil PenaltiesIn February 2011 the Internal Revenue Service announced a second voluntary disclosure initiative to allow taxpayers with undisclosed offshore bank, securities and other financial accounts to comply with US income tax and other offshore account reporting rules for prior years and avoid criminal penalties with reduced civil penalties. In addition to other persons, these rules apply to citizens and U.S. resident aliens (e.g., U.S. resident aliens that have maintained accounts in their home country).
Client Alert - Investment Management - SEC Adopts Significant Implementing Rules For Investment Advisers Under Dodd-Frank Act
On June 22, 2011, the Securities and Exchange Commission (the "SEC") adopted rules, rule amendments and amendments to Form ADV (the "New Rules") under the Investment Advisers Act of 1940 (the "Advisers Act") to implement Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act").
The New Rules were not adopted without some controversy. Two of the five SEC Commissioners voted against adopting new rules and amendments to register hedge fund and private fund advisers, and to impose reporting requirements on funds exempt from registration, arguing that the regulatory burdens of the new reporting requirements on venture capital advisers who are exempt from registration are too heavy, are contrary to congressional intent and would negatively impact capital formation. The SEC Commissioners unanimously voted to adopt rules to implement registration exemptions for venture capital fund advisers, advisers to private funds with less than $100 million in assets under management ("AUM") in the United States, and certain foreign advisers. The SEC Commissioners also unanimously voted to adopt a new rule defining "family offices" that are exempt from registration under the Advisers Act.
In a recent decision under the Open Meetings Act (“OMA”), the Michigan Court of Appeals held that a public body’s minutes did not adequately reflect the decision made at a meeting, thus violating the OMA.
In Citizens for Public Accountability v. Lawrence, Case No. 292311 (May 26, 2011), the township was in litigation with a developer. They reached a settlement, but before the township approved it, several public meetings were held for the purpose of considering it. The township held a special meeting on July 24, 2008 during which it approved the settlement agreement by adopting a resolution. Subsequently, at another meeting, they approved the minutes of the July 24 meeting and also approved the resolution.
Aerospace & Defense Newsletter - The Supreme Court's Ruling in General Dynamics and the Superior Knowledge Doctrine
The United States Supreme Court rarely issues a decision regarding public contracting. When it does, this is a noteworthy event. Such an instance occurred when it handed down an opinion in General Dynamics Corp. v. United States, No. 09-1298 (U.S., May 23, 2011).
Automation Alley Newsletter - DOL Rolls-Out Free Smartphone App for Employees to Keep Shadow Time Records: Is this a Concern or an Opportunity for Employers?Last week, the DOL unveiled a "time-keeping smart phone app" for employees to keep their own time records via an application on their iPhones or iPod Touches. The App is free and can be downloaded from iTunes. While the App's concept seems simple and convenient, it may actually cause considerable confusion.
Client Alert - Labor & Employment - DOL Rolls-Out Free Smartphone App for Employees to Keep Shadow Time Records: Is this a Concern or an Opportunity for Employers?Last week, the DOL unveiled a "time-keeping smart phone app" for employees to keep their own time records via an application on their iPhones or iPod Touches. The App is free and can be downloaded from iTunes. While the App's concept seems simple and convenient, it may actually cause considerable confusion.
Automation Alley Newsletter - The EEOC Issues Final ADA Regulations and Accompanying Interpretive GuidanceOn Friday, March 25, 2011, the Equal Employment Opportunity Commission published its final regulations and accompanying interpretive guidance to implement the ADA Amendments Act of 2008 ("ADAAA"). The final regulations will take effect on May 24, 2011.
Client Alert - Labor & Employment - The EEOC Issues Final ADA Regulations and Accompanying Interpretive Guidance Implementing the ADA Amendments Act of 2008On Friday, March 25, 2011, the Equal Employment Opportunity Commission published its final regulations and accompanying interpretive guidance to implement the ADA Amendments Act of 2008 ("ADAAA"). The final regulations will take effect on May 24, 2011.
Client Alert - Labor & Employment - U.S. Supreme Court Holds that Retaliation Claims Under the FLSA can be Based on the “Filing” of Oral ComplaintsEarlier this week, the United States Supreme Court yet again made it easier for employees to bring retaliation lawsuits against their employers. By a 6-2 decision (Justice Kagan did not participate), the Court held that oral complaints implicating the Fair Labor Standards Act ("FLSA") are covered by the Act's anti-retaliation protections.
Client Alert: Labor and Employment - Amendment Of The Michigan Payment Of Wages And Fringe Benefits Act To Permit The Payment Of Payroll By Mandatory Direct Deposit Or Payroll Debit Card
For years, the Michigan Payment of Wages and Fringe Benefits Act lagged behind the technologies available for how to pay employees. Specifically, unlike various other states' payment of wages statutes, the Michigan Act did not permit Michigan employers to require employees to receive their pay by direct deposit. Instead, an employee's consent to direct deposit had to be voluntary, and if an employee did not consent to direct deposit, then the employer had to issue a paper check to the employee.
Effective December 21, 2010, however, the Act was amended to permit, subject to certain conditions, the mandatory use of either direct deposit or a payroll debit card, which is also known as a payroll card or a paycard. This amendment means that an employee cannot insist on payment by the means of a paper check and that an employer can compel the use of direct deposit or payroll debit cards and can accordingly transition into a paperless payroll system with associated savings.
Butzel Long recently informed you that a package of bills reflecting significant amendments to Michigan's cleanup and liability protection laws passed the State House and Senate, and were awaiting the Governor's signature. Those bills were signed into law and became effective on December 14, 2010.
Two provisions of the new laws concern (a) self implementing cleanups and (b) letters that the Michigan Department of Environmental Quality ("MDEQ") (yes, effective January 4, 2011, it is back to being called DEQ) is now authorized to issue stating that there is no further response action required at a site. This alert provides a brief overview of these two new provisions.
One of the bills passed by the Michigan Legislature at the end of 2010 was a bill that expanded the state economic development programs to include green chemistry. The Michigan Economic Development Corporation ("MEDC") currently has in its "toolbox" the ability to provide certain grants, tax credits, and other benefits to companies in the high technology and new and developing energy sectors. One such program is the Centers of Energy Excellent Program to promote the development, acceleration, and sustainability of new and developing sectors in the energy field by making state grants available to companies as part of the Michigan Twenty-First Century Job Fund Initiative. The legislation also expands the definition of "high-technology activity" to include "green chemistry" for the purpose of receiving Michigan Economic Growth Act ("MEGA") tax credits against the Michigan Business Tax.
The definition of "green chemistry" includes "chemistry and chemical engineering to design chemical products or processes that reduce or eliminate the use or generation of hazardous substances, while producing high-quality products through safe and efficient manufacturing processes."
The UAW recently issued its “Principles for Fair Union Elections.” In 2011, the UAW plans to use these Principles in an effort to organize new members, initially at foreign-owned automotive companies and, if successful, then potentially at automotive supply companies and companies in other industries. The UAW has publicized the Principles as evidence that the UAW is less confrontational and more collaborative with employers, especially foreign-owned automotive companies.
For employers, particularly in the automotive industry – either foreign-owned automotive manufacturers or non-unionized automotive suppliers – the questions are whether an employer should accept or reject the Principles and what would be the consequences of either acceptance or rejection of the Principles.
The Patient Protection and Affordable Care Act ("Act") enacted on March 23, 2010 included a provision requiring insured group health plans (other than grandfathered health plans) to satisfy the nondiscrimination requirements of Internal Revenue Code ("Code") Section 105(h)(2). Prior to the Act, Code Section 105(h) only applied to self-insured health plans and required that they not discriminate in favor of highly compensated individuals as to eligibility to participate in the plan or in favor of highly compensated participants as to benefits available under the plan. The Act provided for the first time that insured group health plans comply with Code Section 105(h) under "rules similar to the rules" that applied to self-insured plans. In a Notice issued on December 22, 2010, the IRS has suspended application and enforcement of this rule for insured group health plans until regulatory guidance is issued.
Under the Act, an insured group health plan that failed to comply with the new nondiscrimination rules could have been subject to (1) an excise tax of $100 for each day of noncompliance with respect to each individual to whom such noncompliance relates (with certain exceptions), (2) in the case of a non-Federal governmental group health plan, civil money penalties under the Public Health Services Act of up to $100 per day per individual for each day the plan does not comply with the requirements (with certain exceptions), or (3) a civil action to enjoin a noncompliant act or practice or for other appropriate equitable relief under the Employee Retirement Income Security Act of 1974 ("ERISA").
The Employee Free Choice Act will not be enacted during the next two years. But the pro-union National Labor Relations Board will continue to issue rulings that will help unions organize new members.
The latest example of this NLRB trend is a decision involving Dana Corporation and the UAW. Dana Corporation, 356 NLRB #49 (2010). In a 2 to 1 decision, the NLRB ruled that Dana and the UAW, which represented Dana employees at 9 other facilities, did not violate federal labor law by entering a Letter of Agreement before the UAW represented the employees at a non-unionized Dana facility. The Letter was not even disclosed to the Dana employees whom the UAW wanted to organize.
On December 22, 2010, the National Labor Relations Board published, in the Federal Register, "Proposed Rules Governing Notification of Employee Rights under the National Labor Relations Act." For 60 days following December 22nd, members of the public may submit comments about these proposed rules to the NLRB.
These Proposed Rules confirm that the current NLRB will act aggressively to help labor unions.
On December 16, in a conference call which included U.S. Commerce Secretary Gary Locke, U.S. Patent and Trademark Office (USPTO) Director David Kappos and Michigan Governor Jennifer Granholm it was announced that the USPTO will locate its first Regional Patent Office in Detroit, Michigan. Employing 100 patent examiners at the outset, the regional office is scheduled to open sometime in 2011. In part, this move by the USPTO is intended to facilitate the hiring of additional qualified examiners and so reduce the present pendency of patent applications at the USPTO. According to Secretary Locke, the goal is to "get down to a 1 year review."
According to USPTO Director Kappos, the corps of examiners in the new Detroit Regional Office will represent, at least in part, technologies that mesh well with local industries, including automotive and emerging technologies.