Alerts & Newsletters

On March 25, 2020, the U.S. Senate voted to approve the Coronavirus Aid, Relief, and Economic Securities (CARES) Act, an economic stimulus package addressing the impact of the COVID-19 pandemic. The U.S. House of Representatives is expected to approve the Act in its current form, with the President signing it into law shortly thereafter. It is estimated the Act will infuse the economy with over $2 trillion of relief through a wide variety of provisions for individuals and businesses impacted by the COVID-19 pandemic. A key tax-related provision of the Act is the Employee Retention Credit for Employers Subject to Closure Due to COVID-19.

In Michigan, additional coronavirus relief resources are available through the Michigan Small Business Relief Program (Program) established by the Michigan Strategic Fund (MSF) and administered by the Michigan Economic Development Corporation (MEDC) as either loans or grants. Separately from relief offered by the U.S. Small Business Administration, the MSF authorized the Program, providing up to $20 million in grants and loans to support business workforce continuity and reductions in cash flow. The MEDC anticipates that at least 1,100 businesses across the state will benefit from this Program, with funds being available no later than April 1, 2020.

In response to the coronavirus disease pandemic, the USCIS today announced it will exercise some flexibility regarding responding to requests for evidence (RFEs) and notices of intent to deny (NOIDs) dated between March 1 and May 1, 2020.

The U.S. Department of Labor seems to be working around the clock these days, and late on March 26 it added to its Q&As regarding the Families First Coronavirus Relief Act (“FFCRA”). In its responses to questions 15-37, the DOL examined issues such as teleworking, intermittent leave, and furloughs. The FFCRA goes into effect on April 1, 2020, so this additional guidance is welcome and just in the nick-of-time. We highlight some of the additional guidance in this alert.

The COVID-19 pandemic is having a wide-ranging impact on the U.S. real estate industry, particularly on the relationship between landlords and tenants. In order to better understand impending risks, both landlords and tenants should review their leases and insurance policies and consult real estate counsel before taking action. A sampling of leasing issues arising during the COVID-19 pandemic is set forth in this alert.

The coronavirus pandemic has impacted the food industry, just as it has many others. The good news is that food-to-person transmission of the disease does not seem to be a risk. The challenge remains keeping workers safe from airborne and surface transmission. However, the FDA and the USDA have provided guidance and recommendations to food producers to deal with COVID-19. The guidance focuses on stopping the person-to-person spread of the disease. There are also supply chain concerns addressed in the guidance and waivers for some in-person requirements.

On March 25, 2020, the SEC issued an order granting temporary relief from the filing deadlines for certain SEC filings due between March 1, 2020, and July 1, 2020. This order supersedes the SEC’s March 4 order. Under the order, public companies that can’t meet the filing deadlines for certain documents as a result of COVID-19 will be given an additional 45 days from the original due date. Relief is contingent upon a series of factors and requirements.

The CARES Act will establish the Paycheck Protection Program (PPP). This alert contains several pieces of information and highlights of the PPP, including who will be eligible, who will lend the money, what the maximum loan amount and interest rate are, what permitted uses of the loan are, and what the loan forgiveness programs really mean for businesses.

Late in the day on March 24, the DOL provided its first round of guidance regarding the Families First Coronavirus Response Act (FFCRA). While the guidance provides some clarity for employers, many important questions are left unanswered.

Coronavirus Disease (COVID-19) is affecting companies across the nation and around the world in a variety of ways. Dykema is closely monitoring the legal ramifications of the crisis and evaluating the potential impact on businesses in a wide variety of industries. The federal government has released its CISA guidelines, and many governors throughout the country have adopted executive orders directing residents to remain at home or in their place of residence to the maximum extent possible in order to limit the spread of COVID-19. Of those states, each has provided similar, but not identical, exemptions for certain businesses deemed “Essential Services.” Sorting through the federal, state and local guidelines and requirements is complicated and requires a fact-based analysis weighing essentiality against the need to sustain and protect life. To assist you in this process, Dykema has prepared and will continue to update COVID-19 Quick Reference Guides. The first of these is entitled “State Level Shelter-in-Place Orders and Essential Services Provisions.”

Households and businesses across the country continue to take safety precautions in response to the COVID-19 pandemic. At the same time, the federal government is preparing an unprecedented federal response to the health, safety and economic challenges. In the coming weeks, we expect a wide variety of private businesses to partner with federal agencies and receive funds to address the health crisis. Federal funds will flow to businesses involved in the manufacture and delivery of medical equipment, the construction of temporary health care facilities, the provision of household goods to overcome supply chain interruptions, and the manufacture of sanitizers, soaps, and masks, to name just a few. As businesses consider opportunities to partner with the federal government in its relief efforts, they should be mindful of the importance to provide accurate information. There are potentially serious consequences for making a false statement to obtain a government contract or to obtain payment under a federal program.

Federal authorities have recently issued a large number of new policies, guidance, etc., in response to the coronavirus pandemic, including flexibility in submitting required signatures on applications, USCIS office closings, LCA postings for H-1Bs, the DOL extending deadlines for responses and initial filings, the suspension of routine visa services and flexibility in I-9 compliance requirements.

Dykema has launched a COVID-19 Resource Center to keep our clients up to date on the most recent legal, business and health guidance surrounding the novel coronavirus and how to navigate their businesses through uncertain times. Various firm practitioners are providing timely content that aims at providing guidance for employer’s current issues as well as those unforeseen items that have yet to arise. The site is continually being updated, as state and federal authorities provide guidance on a rolling basis.

On March 22, 2020, the Federal Reserve Board, the FDIC, the National Credit Union Administration, the Office of the Comptroller of Currency, the Consumer Financial Protection Bureau and state banking regulators (collectively, the “agencies”) published an interagency statement on loan modifications and reporting for financial institutions working with customers affected by COVID-19.

On Friday, March 20, 2020, the Department of the Treasury issued Notice 2020-18 (which supersedes Notice 2020-17 issued two days prior), postponing tax filing and payment deadlines for many taxpayers in order to grant some amount of relief to individuals and businesses amid the Coronavirus/COVID-19 crisis. In contrast to Notice 2020-17, Notice 2020-18 not only provides many taxpayers with the ability to defer Federal income tax payments otherwise due by April 15, 2020, but also postpones the April 15 filing deadline for Federal income tax returns. Notice 2020-18 does not, however, postpone or alter the deadline for estimated quarterly payments due June 15, 2020.

On March 23, 2020, in order to curb the spread of COVID-19 in Michigan, Governor Whitmer issued Executive Order 2020-21 (“EO 2020-21”), which orders all Michigan residents to stay at home or in their place of residence unless exempted until April 13, 2020, at 11:59 p.m. To this end, EO 2020-21 also orders that no person or entity may conduct a business or conduct operations that require workers to leave their homes or residences unless that entity qualifies for an exemption. The issuance of EO 2020-21 poses several questions, such as what activities are prohibited, how long it will be in effect, what businesses are exempted from its restrictions, and much more.

On March 23, 2020, in order to curb the spread of COVID-19 in Michigan, Governor Whitmer issued Executive Order 2020-21 (“EO 2020-21”), which orders all Michigan residents to stay at home or in their place of residence unless exempted until April 13, 2020, at 11:59 p.m. To this end, EO 2020-21 also orders that no person or entity may conduct a business or conduct operations that require workers to leave their homes or residences unless that entity qualifies for an exemption. The issuance of EO 2020-21 poses several questions, such as what activities are prohibited, how long it will be in effect, how it restricts companies in the energy industry, and much more.

On Wednesday, March 18, 2020, the Department of the Treasury issued Notice 2020-17, postponing payment deadlines for many taxpayers in order to grant some amount of relief to businesses and individuals amid the Coronavirus/COVID-19 crisis. The Notice provides many taxpayers with the ability to defer federal income tax payments otherwise due by April 15, 2020, but does not postpone or alter the April 15 filing deadline or estimated payments due June 15, 2020.

On March 18, 2020, Governor Gretchen Whitmer issued Executive Order 2020-15 which permits all public bodies in the State of Michigan, with the exception of the State Legislature, to meet during the COVID-19 state of emergency (“COVID-19 Emergency”) by electronic means until April 15, 2020. The issuance of Executive Order 2020-15 poses several questions, such as who it applies to, how long it will be in effect, what provisions to the Open Meetings Act are suspended, and much more.

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (“FFCRA”) a few hours after the Senate approved the bill. Among other things, the new law, with which all employers must comply by April 2, 2020, requires employers with fewer than 500 employees to provide two weeks’ paid leave to employees who need to take time off because of an actual or potential illness related to COVID-19, to care for family members who are home ill or quarantined because of COVID-19 exposure or to care for children who are home because of school or care provider closures linked to the ongoing global pandemic. The new law also requires employers to provide employees up to 12 weeks' leave, with 10 weeks paid, for employees who have to take time off to care for children who are home because of school or daycare closure. Notably, in a substantial change from the bill passed by the House of Representatives on March 14, 2020 (discussed here), the law does NOT require paid leave for a longer period for employees home sick or self-quarantining because of potential COVID-19 exposure.

As the coronavirus disease (COVID-19) continues to spread rapidly throughout the United States—and the world—commercial relationships are being thrown into disarray, resulting in the disruption of supply chains, cancellations of events, and closures of restaurants and other businesses. Several states have declared a state of emergency (including banning large group gatherings and mandating that certain business shutter for the time being). Many companies are requiring that their employees work remotely. As a result of the substantial impact on “business as usual” operations, companies are facing decisions about what to do when COVID-19 circumstances make it difficult (if not impossible) to comply with certain contractual obligations. Will COVID-19 provide your company with a legal defense excusing performance?

On March 14, 2020, the U.S. House of Representatives passed the Families First Coronavirus Response Act (“FFCRA”). While the bill has not yet been passed by the Senate, the White House has indicated that it supports and intends to sign the bill into law once the Senate has an opportunity to address its provisions, which will likely be sometime early this week. For employers, the bill imposes a number of requirements related to employees who are being impacted by the global coronavirus pandemic, either because of illness, self-quarantine, or additional child-care obligations triggered by widespread school cancellations.

With many companies facing increased teleworking, supply chain issues, or health uncertainties because of COVID-19, your corporate documents and policies must be ready to address potential issues that arise. For example, can your board meet remotely? Can you or your suppliers avoid contractual obligations? Do your current employee handbooks provide the necessary flexibility for teleworking and employee accountability? Here is a brief checklist of items to review with your legal counsel in preparation of any extended teleworking or closures.

On March 15, 2020, Governor Whitmer issued an Executive Order, effective 9 a.m. today imposing two restrictions aimed at preventing price gouging during the COVID-19 emergency. These restrictions, issued pursuant to her powers after declaring a State of Emergency on March 10, 2020, apply to offers or sales of products in Michigan.

Due to the COVID-19 outbreak and concern over the implementation of preventative measures, including more companies asking or requiring employees to work remotely, financial institutions should consider which customers may need to update, amend or supplement the ways that its customers can make payments, whether this be through adding authorized users or implementing alternative methods to send payment orders.

The supply chain effects from the global spread of the novel coronavirus have been building for nearly two months, and are expected to reach a peak in the near future. The effects have centered on China to date, but the epidemic has spread to other centers of production. Supply chain participants thus face the risk of widespread and compounding supply pinches, disputes and even breakdowns.

The coronavirus disease continues to cause headaches for businesses all over the globe. Travel restrictions are leading to cancellations of small meetings and large-scale conferences; factory shutdowns are causing massive supply shortages; employees are being told to stay home from work. Whatever challenges you face in these uncertain times, it is important to remember that your business is not immune from government scrutiny. There are things keep in mind as you strategize to keep your business running smoothly.

The price of oil—already hammered by market conditions—took another stumble in the wake of the COVID-19 outbreak with no immediate relief in sight. The decrease in prices is likely to make contract performance uneconomical in many cases. Accordingly, the Oil & Gas Industry must prepare for the looming wave of oncoming legal issues, which will affect every sector of the market. Proper preparation will enable prudent companies to navigate the downturn in the market. This alert contains recommended actions for industry stakeholders.

As the world’s information about the Coronavirus (“COVID-19”) continues to quickly update, employers must remain aware of the many potential legal risks that can rapidly arise when grappling with COVID-19 in U.S.-based workplaces and workforces. In the first alert of a multipart series, the following legal perils await any employer who is unprepared or ill-informed.

As the world’s information about the Coronavirus (“COVID-19”) continues to quickly update, employers must remain aware of the many potential legal risks that can rapidly arise when grappling with COVID-19 in U.S.-based workplaces and workforces. In the first alert of a multipart series, the following legal perils await any employer who is unprepared or ill-informed.

On March 3, 2020, Attorney General William Barr announced the National Nursing Home Initiative—a new U.S. Department of Justice (“DOJ”) taskforce organized to push criminal and civil enforcement action against nursing homes across the country. The initiative will help coordinate DOJ enforcement actions against nursing homes that provide “grossly substandard care.” The National Nursing Home Initiative has already begun investigating approximately 30 nursing facilities across nine states.

The extent of disruption caused by COVID-19 is unknowable at this time. However, it is likely that there will be suppliers unable to economically weather the storm. One thing is certain: even the most sophisticated entities make costly mistakes in addressing distressed suppliers without realizing they paid more than was necessary. But preparing to successfully address distressed supplier situations can not only maintain the continuity of supply but also reduce costs.

Gilda Radner’s character Rosanne Rosannadanna always ended her routines on Saturday Night live by saying, “It’s always something.” She might well have been talking about COVID-19, the effects of which are just beginning to be felt throughout the world. Schools are closed, supply chains may be cracked, travel is slowing and events are being postponed or canceled outright, with more impacts probably to come.

Dykema is closely monitoring the potential threat of legal fallouts in the wake of supply chain disruption caused by the novel Coronavirus (also known as COVID-19). In the last month, companies reliant on the global supply chain have been faced with part shortages and overall supply chain disruption. Production facility shutdowns as well as halted transportation, primarily in China, are the main causes of these issues. As the virus spreads, it is expected that facilities and transportation in other countries will be impacted as they seek to contain the virus. While most companies are focused on mitigating business risks resulting from the Coronavirus, it is important to ensure companies have a team tasked to send or respond to force majeure notices and to assess contracts and insurance policies for opportunities to tender, shift or avoid costs and liability. Without these processes in place, companies risk waiving important legal rights and losing the ability to recover substantial costs.

Continuing its trend of restoring standards to the pre-Obama Board era, the National Labor Relations Board issued its final joint employer rule, returning the Board to its pre-2015 joint employer rules, albeit with a bit more guidance. The rule, published on February 26, 2020, and effective April 27, 2020, takes the Board back to the “substantial direct and immediate control” joint employer test it employed before the 2015 Browning-Ferris decision.

The U.S. Department of Justice (“DOJ”) has resolved false claims against a sector not typically prone to FCA attacks—research institutions. In December 2019, the DOJ reached a $5.5 million settlement agreement with a Michigan non-profit research institute, alleging that it failed to disclose foreign funding upon the application for, and over the term of, a federal grant. This settlement agreement comes amid the DOJ’s heightened concern for foreign influence in domestic business, especially from the Chinese government.

U.S. Citizenship and Immigration Services (USCIS) has implemented the Inadmissibility on Public Charge Grounds final rule on Feb. 24, 2020, except in Illinois, where the rule remains enjoined by a federal court as of Jan. 30, 2020. The final rule will apply only to applications and petitions postmarked (or submitted electronically) on or after Feb. 24, 2020. USCIS also issued several revised and new forms that applicants and petitioners must use.

Whether you are a commercial landlord or tenant, a number of questions arise as you approach the end of a lease term. Some of the more common disputes that arise at the end of a lease term involve arguments over the difference between fixtures and trade fixtures, and what items should remain in the premises after the lease term. The Michigan Court of Appeals (“COA”) recently added some clarity to these issues.

This morning, the USCIS announced the key H-1B registration dates for the upcoming 2021 fiscal year H-1B Cap season. Under the new H-1B electronic registration process, employers or their authorized representatives must electronically submit a separate registration naming each alien for whom they seek to file an H-1B cap-subject petition.

There have been many significant developments in trademark law and practice in 2019, and there will be many more changes to come in 2020. In this summary, we provide an update on those developments and what you can expect in the new year.

In January 2020, the United States Department of Justice (“DOJ”) issued a press release announcing more than $3 billion in settlements and judgments from civil cases involving fraud and false claims against the government had been collected in the 2019 fiscal year. Health care was, once again, the most adversely affected industry. Among the providers and manufacturers affected were drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.

Dykema closed 15 deals during the fourth quarter, finishing 2019 with a total of 70 closed deals—a firm record and a 39 percent increase from 2018. 

Obtaining approvals like special use permits and variances for real estate projects can be a time-consuming and expensive effort. When a zoning authority denies an application that should rightfully have been approved, timing can be everything when it comes to succeeding on appeal—as highlighted by a recent case from the Michigan Court of Appeals. Even an otherwise successful appeal will not survive if it is filed after the applicable deadline, even if a deadline is missed due to potentially erroneous instruction.

Over the past few weeks, the National Labor Relations Board issued a series of employer-friendly decisions overturning a number of Obama-Board precedent-changing decisions. While not all of these recent decisions totally restored the law to what it was before, they all significantly move the pendulum back to near the center. The Board also issued its final rule regarding representation case procedures, something employers have been anxiously awaiting. With these changes, employers (and unions) will have to rewrite significant parts of their “play-books.”

The SECURE (Setting Every Community Up For Retirement Enhancement) Act (the “Act”) was included and passed as Division O of the Further Consolidated Appropriations Act of 2020. The Act is effective January 1, 2020, and includes many provisions intended to increase retirement savings by making it easier for employers, particularly small employers, to offer retirement savings plans and by increasing the types of employees eligible to contribute to retirement plans.

As in previous years, the California legislature kept busy in 2019. As a result, a number of new and noteworthy employment laws will go into effect on January 1, 2020, and beyond. Some of the significant new laws affecting California employers involve the worker status of independent contractors, various forms of discrimination, harassment and retaliation protections, and increases in minimum wage.

Effective on January 1, 2020, the California Consumer Privacy Act (“CCPA”) represents a fundamental change in privacy law in California and the U.S. because of the Act’s nationwide reach. With limited exceptions, any for-profit company doing business with California residents and collecting personal data, including incidental website traffic via cookies, may be required to comply with the Act’s strict data privacy rights. This alert serves as an overview of the CCPA, how it affects employment law, and what businesses can do to prepare.

On January 1, 2020, a number of new pay rules will become effective. While these changes may not directly impact many employees, they could cause pay compression under many compensation plans. Pay compression issues trigger employee morale issues, and adapting to those issues may mean that more than just those at the bottom of pay scales will need to have their pay adjusted. This ripple effect, of course, could be costly. There are various things employers should be aware of and address in some form.

USCIS has announced implementation of the H-1B electronic registration process for Fiscal Year 2021 Cap Season. Under this new process, employers seeking H-1B workers subject to the annual numerical cap, or their authorized representatives, will be required to complete a registration process that requires only basic information about their company and each requested worker. USCIS will provide guidance on how to use the system and prepare registrations before opening it for the initial registration period.

Before 2019 comes to a close, it may be worthwhile to review the state of your tax, estate, and charitable giving plans. Along with the typical end-of-year considerations, it is important to remain aware of the effects of the 2017 tax act (informally called the “Tax Cuts and Jobs Act of 2017,” and herein the “2017 Tax Act”) that altered many longstanding rules and assumptions.

On November 5, 2019, the U.S. Department of Justice (DOJ) Antitrust Division announced the establishment of a Procurement Collusion Strike Force (PCSF) to deter, detect, investigate, and prosecute criminal schemes that undermine the integrity of the government procurement process. Now, more than ever, government contractors should be vigilant and anticipate heightened scrutiny of their interactions with competitors,  particularly in the bidding process. The PCSF aims to both identify potential bid-rigging, price-fixing, and other collusive conduct, as well as provide input to government programs to eliminate antitrust-related vulnerabilities in their acquisition procedures.

Hackers delight in targeting U.S. companies during the holiday season triggering a year-end spike in cyber-attacks. This year we can expect that threat actors across the globe will remain online throughout the holiday season, looking to capitalize on the distraction of the holidays and the increased internet traffic that comes with online holiday shopping. Accordingly, companies should remain alert to the possibility of a cyber-attack, especially ransomware attacks, which have more than doubled this year alone. Organization’s should consider taking certain steps to help manage and mitigate risk.

On October 28, 2019, the U.S. Department of Housing and Urban Development (HUD) and U.S. Department of Justice (DOJ) issued a Memorandum of Understanding (MOU) to provide clarity and quell lenders’ fears about liability for mortgage lending errors under the False Claims Act. Specifically, the MOU explains that HUD’s Mortgage Review Board will be the primary entity: (1) to take actions against non-compliant Federal Housing Administration lenders and (2) to evaluate whether the alleged violations of the False Claims Act should be referred to DOJ.

The U.S. Department of Homeland Security published a final rule on January 11, 2019, introducing electronic registration requirement for employers seeking to file H-1B cap-subject petitions. The final rule went into effect on April 1, 2019, though the electronic registration requirement was suspended Fiscal Year 2020 to allow USCIS to complete user testing and ensure the system and process are fully functional. On November 8, 2019, USCIS announced a final rule that will require a $10 registration fee for petitioners seeking to file H-1B cap-subject petitions.

The U.S. District Court in Portland, Oregon, issued a 28-day temporary restraining order in an unusual weekend session just before the “Presidential Proclamation on Suspension of Entry of Immigrants Who Will Financially Burden the United States Healthcare System” was to go into effect on November 3, 2019. Judge Michael H. Simon agreed to “freeze things the way they are” so a determination can be made on the merits of the case. A hearing on a preliminary injunction has been set for November 22, 2019.

The third quarter continued the torrid pace of M&A volume for our clients—we closed a total of 18 transactions, a substantial increase over the third quarter of last year. The average deal size increased as well from $29M to $62M. The industries covered included alcoholic beverages, amusement parks, automotive, pharmaceuticals, apparel, aerospace and defense, information management, car rental and dental service organizations. Our largest driver of deal volume was the dental service organization sector, in which we closed eight transactions alone.

Last week, businesses and privacy professionals saw two major steps taken in preparation for the long-awaited California Consumer Privacy Act (“CCPA”), which goes into effect January 1, 2020. California Governor Gavin Newsom signed the pending amendments to the CCPA into law, while California Attorney General Xavier Becerra released the initial draft of the CCPA’s accompanying regulations. Together, the Amendments and Regulations provide additional clarification, limited exemptions for employee information, and guidance to CCPA compliance.

Yesterday, in a closely-followed case, the Supreme Court decided not to hear an appeal brought by the Domino’s pizza chain, which sought to overturn the Ninth Circuit Court of Appeal’s decision that entities selling online must make their websites and apps accessible to people with disabilities. The decision is considered a major win for disability rights advocates, who have been arguing that the Americans with Disabilities Act (“ADA”) applies to websites, digital platforms, and other non-physical spaces. The Supreme Court’s refusal to address the issue leaves the law unsettled both as to brick-and-mortar retailers who also have websites/apps (like Dominos) and e-commerce-only businesses.

Governor Gavin Newsom signed A.B. 5 on September 18, 2019. This legislation is expected to have a greater impact on California employers than any law enacted in decades. Every industry using independent contractors, from agriculture to entertainment, could be impacted. Although some lobbying groups succeeded in obtaining qualified exemptions, the vast majority of the several million workers currently classified as independent contractors (ICs), will need to be reclassified. The law also may have repercussions in other states causing them to implement similar legislation.