Alerts & Newsletters

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.

As investor interest in qualified opportunity zones (“QOZ”) grows, both qualified opportunity funds (“QOFs”) and investors should be aware of the benefits of organizing QOFs as C-corporations. C-Corporation QOFs may take advantage of the reduced corporate income tax rate of 21 percent and the benefits under Section 1202 of the Internal Revenue Code (the “Code”).  

The U.S. Department of Labor has announced its Final Rule increasing the minimum salary level employees need to be paid in order to be deemed an exempt white collar employee, provided the employees otherwise meet the applicable duties and salary basis tests. The rule has been long-awaited since the predecessor Obama administration-era rule was enjoined by a Texas federal court in 2016. The appeal of that case has been on hold, allowing the Department time to consider a new rule that would more likely survive a legal challenge. The new rule will go into effect on January 1, 2020, giving employers a little more than three months to evaluate compensation programs and make sure they are in compliance with the new rule.

Michigan is moving rapidly toward promulgating health-based drinking water standards for perfluoroalkyl and polyfluoroalkyl substances (PFAS). In March 2019, Michigan’s governor directed the Michigan PFAS Action Response Team (“MPART”) to form a Science Advisory Workgroup “to review both existing and proposed health-based drinking water standards from around the nation to inform the rulemaking process for appropriate Maximum Contaminant Levels (MCLs) for Michigan by no later than July 1, 2019” and directed what is now the Department of Environment, Great Lakes, and Energy (EGLE) “to immediately file a Request for Rulemaking to establish enforceable MCLs for PFAS in our drinking water supplies.” The governor commanded that proposed regulations be completed “on an accelerated schedule with input from stakeholders by no later than October 1, 2019.”

On September 9, 2019, the U.S. Court of Appeals for the Eleventh Circuit issued an important decision for health care providers, especially those in the hospice industry. In U.S. v. AseraCare, Inc., No.16-13004, Slip. Op. (11th Cir. September 9, 2019), the Court held that a “reasonable disagreement between medical experts” about prognosis for a terminally ill patient, without more, cannot establish falsity. Slip. Op. at 3.