Client Alerts

For some time, Michigan’s robust aerospace and defense industry has been somewhat under the general public’s radar, at least in comparison to the auto industry. That’s changing, and fast, as the local A&D community has been commanding attention of late.

Chinese state-owned Fujian Jinhua Integrated Circuit Co. and Taiwanese United Microelectronics Corp. face criminal prosecution in a California federal court for trade secret theft. See U.S. v. United Microelectronics Corporation, Inc., et al., No 18-CR-465 (N.D. Cal.). The victim of the alleged crime is Idaho-based Micron Technology Inc. According to Micron, the two defendant companies conspired to steal $8 billion dollars-worth of Micron’s trade secrets underpinning its dynamic random access memory (DRAM) chip technology.

Non-Compete agreements have received a great deal of attention recently. Lawmakers at the state and local level have analyzed, discussed, and debated whether they should be permitted, when they should be permitted, and what exceptions or parameters should be placed on them. State Attorneys General have investigated their use (and, some would say, their abuse).  Even federal administrative bodies have studied the issue and taken comments on it.

Whether or not one believes tariffs are the fix to a national security issue – the basis for Section 232 Tariffs – it is clear that tariffs are having an effect on the US economy (some say positively, others say negatively).

A contract for the sale of goods that said “Buyer promises to purchase its requirements for the goods from Seller and Seller promises to supply Buyer’s requirements” is an enforceable “requirements contract” (often referred to in the automotive supply industry as a “blanket order”) under Article 2 of the Uniform Commercial Code, which governs contracts for the sale of goods. 

Attorneys often have to correct common misunderstandings that clients have about certain legal principles. For example, whether attorney fees are recoverable in litigation and what is and is not covered by insurance. In the area of construction law, a common misconception for both construction professionals (e.g. construction companies, homebuilders, etc.) and non-construction professionals (e.g. property owners, homeowners, etc.) is the concept that exposure for all construction-related claims ends after the one-year warranty often found in construction contracts.  

On February 19, 2020, the Small Business Reorganization Act of 2019 (the “SBRA”) becomes effective. A small business debtor under the US Bankruptcy Code is a person or entity, other than the owner of a single asset real estate, that is engaged in commercial or business activities that has aggregate noncontingent liquidated secured and unsecured debt of not more than $2,725,625 (subject to periodic adjustment). The objective of the SBRA is to make it easier and less expensive for small businesses, considered by Congress to be the backbone of the American economy,  to reorganize and remain in business under Chapter 11. The SBRA makes a number of changes to the Bankruptcy Code that will decrease the costs of reorganizations and enable small business owners to retain control over their businesses.

At both the federal level and in Michigan, public policy favors enforcement of arbitration clauses. Arbitration is perceived as a faster, more flexible, less expensive way of having subject-matter experts resolve disputes, with limited appellate rights to promote finality. So, when your company contracts for these benefits, it important that your business agreements make it clear for the court just which disputes you intend to be arbitrated—some of them, those arising from events in the past, present, or future, or all of them.

With January now behind us, hopefully everyone is sticking to their New Year’s resolutions. But separate from those resolutions, many employers are experiencing increased employee resignations in early 2020. Indeed, most employers experience their highest employee turnover rate after the 1st of the year. Why?

The World Health Organization declared the spread of a new strain of coronavirus that is centered in China a “global health emergency” last week, sending global markets into a steep downward spiral, causing major global airlines to suspend flights to China, and resulting in the issuance of a “level 4” emergency warning by the US State Department admonishing citizens to avoid traveling there.

U.S. steel and aluminum producers were the intended beneficiaries of the Section 232 tariffs initiated by President Trump in 2018. Steel imports in 2019 dropped 17% year-over-year providing an opportunity for U.S.-based steel manufacturers to improve their market share to above 80%. 

On 01/09/2020, U.S. Citizenship and Immigration Services (“USCIS”) formally announced the implementation of the H-1B registration process for fiscal year 2021 H-1B cap-subject petitions.

Case to Watch:  Progress Michigan v. Attorney General

2019 brought with it numerous efforts to limit, restrict or outright ban the use of non-compete agreements. Those efforts occurred at both the state and federal level and some state actions were successful. But 2019 also brought with it a renewed effort at the federal level for change in the non-compete arena.

This is the second part of our discussion of issues arising in cross-border acquisitions, both inbound and outbound. 

In Michigan, the economic-loss doctrine bars tort remedies for nonperforming goods where the injury consists of damage to the goods themselves and any related property damage resulting from the nonperforming goods.

The California Consumer Privacy Act (“CCPA” or the “Act”) became effective with the New Year.  While this may catch many off-guard, the good news is that due to some regulatory uncertainty, the California Attorney General has stated that official enforcement actions under the CCPA will not begin until July 1, 2020, four months after the finalized regulations are released on March 1, 2020. This does not mean, however, that companies can expect a free ride until then.

In a much-heralded ceremony on January 15, top delegates from China and the US, signed what was referred to as a Phase I trade deal between China and the US which hopefully will put a partial end to some of the contentious issues that have disrupted import supply chains and roiled the stock market.

Under the SECURE Act, which was signed into law in December 2019, important changes have been made to the required minimum distributions rules applicable to retirement accounts inherited from the original owner of the retirement account (the “account owner”). 

A recent decision by the United States District Court for the Middle District of Florida serves as yet another cautionary tale to employers seeking to hold former employees to the terms of their non-compete and non-solicitation agreements.