Client Alerts

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.

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.

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.

Introduction

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.

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.

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 (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.

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.

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[1]. “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.