Trademark and Copyright
“Alright, Alright, Alright,” — Taylor’s Version. Taylor Swift follows Matthew McConnaughey’s Novel Approach to Using Trademark Rights to Enforce Against AI Impersonation
Ever eager to retain control over her masters and ensure that she “never goes out of style,” Taylor Swift is the latest public figure looking toward registration of sensory trademarks to protect her name and likeness in a roundabout way. On April 24, 2026, Taylor Swift's company, TAS Rights Management, filed three trademark applications with the U.S. Patent and Trademark Office: two "sound marks" capturing her spoken voice (which include the language "Hey, it's Taylor" and "Hey, it's Taylor Swift") and one design mark consisting of a photograph of Swift performing onstage during The Eras Tour. This echoes our prior writing regarding similar applications filed by the actor, Matthew McConnaughey, as Swift’s applications represent the latest in a growing movement of public figures attempting to use trademark rights to protect their names and likenesses — most likely due to the increasing accessibility of AI technology, which can impersonate such figures. While sound marks have historically been used to protect iconic brand audio cues, like Netflix's "tu-dum", the MGM lion roar, or NBC's chimes, these public figures have attempted to apply the same framework for their spoken voices and image. This genuinely novel use of trademark law is as-of-yet untested, and Swift's motivation here is not hard to read, as her likeness has been used without permission in numerous AI-generated fakes, including by Meta's AI chatbots, in non-consensual pornographic images, and in false political endorsements shared during the 2024 presidential election. The legal theory underlying these filings is novel and creative precisely because existing law was never designed for this purpose. Under current U.S. law, a musician's recorded performances are protected by copyright law, while the unauthorized commercial exploitation of a person's name or likeness is addressed by state-level right-of-publicity statutes. Individual states, including New York and California, have right-of-publicity laws that prevent unauthorized commercial use of a person's name, image, and likeness (“NIL”), but trademark infringement claims can be filed in federal court, making them a potentially more powerful deterrent as those cases apply nationwide and are not dependent on individual states’ differing enforceability limitations. Most importantly, trademark enforcement doesn't just stop identical uses as copyright enforcement does. Rather, trademark enforcement is designed to protect a rights owner against anything "confusingly similar" to a registered mark. This is a meaningfully broader standard that could reach AI-generated content that approximates, but doesn't exactly replicate Swift's voice or appearance. Trademark claims also enhance the ability to obtain emergency injunctive relief and to recover damages against AI platforms themselves. However, these applications face an unsure road to registration. Trademark protection traditionally requires that the mark function as a source identifier (i.e., signaling to consumers the origin of a product or service) and it is far from settled whether a person's voice or image satisfies this standard. Historically, trademarks are not designed to protect an individual's general likeness, voice, or persona. Swift's filings may be best understood as a deliberate effort to layer additional federal remedies on top of existing right-of-publicity and copyright protections rather than a “cure-all” to the elusive offense of AI impersonation, the scale and sophistication of which is not subject to a single body of law. Whether these applications ultimately succeed, they reflect a broader and accelerating trend: public figures and their counsel actively searching for any available legal structure to fill the enforcement gap that generative AI has created. It is clear that Swift believes that she will continue to Party Like It's 1989™. image credit SockaGPhoto - stock.adobe.com
May 11, 2026
Tax
Cannabis Tax Relief Is Here — But IRS Risk Is Just Beginning
For years, cannabis operators have functioned under a fundamentally distorted tax regime. Section 280E denied deductions that every other business takes for granted, forcing companies to pay tax on something closer to gross income than net profit. That framework has now changed, at least for a significant portion of the industry. The federal government’s decision to reschedule state-licensed medical cannabis to Schedule III removes the § 280E limitation and allows qualifying businesses to deduct ordinary and necessary expenses under § 162. The headline is clear: tax relief is here. But the more important reality is this: the industry is transitioning from a regime of disallowance to a regime of interpretation, and that is where risk lives. A Structural Shift, Not Just a Tax Cut The removal of § 280E does more than reduce tax liability. It fundamentally changes how cannabis businesses are analyzed for tax purposes. For the first time, medical operators must think like every other taxpayer. They must evaluate what constitutes an ordinary and necessary expense, how costs are allocated across lines of business, and whether those positions are sustainable under IRS examination. This normalization introduces flexibility but also subjectivity. And subjectivity is where disputes begin. For operators with both medical and recreational activities, the issue is even more pronounced. Because recreational cannabis remains a Schedule I substance, § 280E still applies to that portion of the business. That creates an immediate need to develop defensible allocation methodologies between revenue streams, personnel, facilities, and shared overhead. These are not merely accounting questions, they are positions that will ultimately be tested. Timing, Transition, and Retroactivity Another layer of complexity lies in how the change is implemented. Treasury and the IRS have signaled that § 280E relief may apply to the entire taxable year that includes the effective date of rescheduling. If that approach holds, it creates a significant opportunity, but also risk. Businesses may take positions that maximize deductions across the full year, while the IRS may later challenge how those positions were calculated or documented. There is also the open question of retroactive relief. The possibility that prior years could be revisited raises strategic considerations around amended returns, refund claims, and statute of limitations issues. These decisions are not purely mechanical. They require a view of how the IRS is likely to respond. R&D Credits: A New Frontier for Cannabis Tax Strategy Perhaps the most underappreciated implication of rescheduling is access to the research and development credit under § 41. Cannabis businesses, particularly those engaged in cultivation, extraction, and product development, often perform activities that meet the technical requirements for qualified research. These include developing new strains, improving yield and consistency, refining extraction processes, and designing new delivery methods. Historically, many operators either avoided claiming the credit or took a conservative approach due to the overlay of § 280E and the lack of clear precedent in the industry. That restraint is likely to disappear quickly. The financial upside is real. Properly documented R&D credits can offset a meaningful portion of federal tax liability, and in some cases provide payroll tax offsets for earlier-stage businesses. But this is not low-risk territory. R&D credits are already an area of heightened IRS scrutiny, and the agency has become increasingly aggressive in challenging claims that lack contemporaneous documentation or rely on overly broad characterizations of qualifying activities. Cannabis businesses entering this space will be doing so under two compounding factors: new eligibility, and a tendency toward aggressive positioning. That combination is precisely what draws enforcement attention. The Inevitable Second Phase: IRS Scrutiny Tax law changes of this magnitude do not settle quietly. They move in phases. The first phase is what we are seeing now: rapid adoption of favorable positions. The second phase is where the IRS responds, often several years later, once patterns emerge and guidance is issued. That is when the real issues surface. The IRS will examine whether allocation methodologies between medical and recreational operations are reasonable, whether deductions claimed under § 162 are adequately substantiated, whether R&D credits meet the technical and documentation requirements, and whether positions taken during the transition period were overly aggressive. By the time these questions are asked, the financial stakes are often significant, and the factual record is already fixed. Why This Requires a Different Approach Most tax planning focuses on maximizing current benefit. In this environment, that is only part of the equation. The more important question is whether the positions being taken today will hold up under examination, appeals, or litigation. That requires thinking not just like an advisor, but like the IRS and, when necessary, like a litigator. Having spent nearly a decade inside the IRS Office of Chief Counsel and now representing clients in complex tax disputes, I have seen how these cases are developed from the government’s side. That perspective informs of a different approach. It means building allocation methodologies that are not just reasonable but defensible, structuring R&D credit claims with audit in mind from the outset, identifying positions that are likely to become enforcement targets, and preparing for disputes before they arise rather than reacting after the fact. In a transition like this, the strongest position is not the most aggressive one. It is the one that can survive scrutiny. The Bottom Line The rescheduling of medical cannabis is a turning point. It brings long-awaited tax relief and opens the door to planning opportunities that were previously unavailable. But it also moves the industry into a more complex and contested tax environment, one where interpretation, documentation, and defensibility matter as much as the underlying benefit. The businesses that come out ahead will not simply be the ones that claim the most. They will be the ones who approach this moment with a clear understanding of how those claims will be evaluated when it matters most. If you are navigating these issues, the question is not just whether you are taking advantage of the opportunity. It is whether you are positioned to defend it.
May 8, 2026
Labor and Employment
It Ends Quietly: What the Lively-Baldoni Settlement Really Tells Us About Litigation
For nearly two years, this case unfolded the way modern legal disputes often do. Not in a courtroom, but in fragments and narratives. In articles, group chats, comment sections, and carefully curated statements. It felt, at times, like a story in search of an ending. But when the ending finally arrived, it was not a verdict. It was a settlement announced in a handful of sentences, issued jointly, and designed to close the door rather than resolve the conflict. No trial. No jury. No public reckoning of who was right. Instead, something quieter. And in many ways, far more revealing. What does it mean when a case settles right before trial? The timing matters. This case did not settle early, when uncertainty is highest and discovery has yet to sharpen the issues. It settled at the last possible moment, just weeks before a scheduled May trial, after the legal landscape had already shifted in a meaningful way. By that point, the court had done what courts do best. It stripped the case to its essentials. Of the original claims, 10 were dismissed, including the most visible, leaving only a narrow set of theories to be decided by a jury. What remained was not the sweeping narrative the public had been following. It was something much smaller. Something much more technical. Something that would have required jurors to answer precise legal questions about retaliation and contractual obligations rather than broader questions about conduct or character. And then, before any of those questions could be answered, the case ended. That sequence is not unusual. It is, in fact, typical. Once discovery is complete and the court has defined the case, the parties are no longer negotiating in the abstract. They are negotiating in the shadow of a very specific trial. One that now comes with clearer risks and fewer unknowns. In that environment, settlement is not retreat. It is recognition. Why would a high-profile case end without money changing hands? Perhaps the most surprising detail emerging from early reporting is the apparent lack of financial exchange between the parties. Each side reportedly walked away covering its own legal fees. That outcome can feel counterintuitive in a case defined by claims of massive reputational and economic harm. But it aligns with something lawyers understand instinctively, and the public often overlooks. Litigation is not a referendum on harm. It is a method for proving it. At various points in the case, the parties advanced dramatically different accounts of damages. One side spoke in terms of lost opportunities and reputational impact. The other questioned both the methodology and the underlying premise. By the time a case reaches the brink of trial, those claims are no longer theoretical. They have been tested, challenged, constrained by evidentiary rules and expert scrutiny. The result is rarely as expansive as the initial pleadings suggested. A no-payment resolution, in that context, does not mean nothing happened. It means something more specific. It reflects the gap between what could be alleged early and what could ultimately be proven in court. Did the settlement change anything or simply confirm what the court had already signaled? In many ways, the settlement feels less like a turning point and more like a conclusion to a process that had already narrowed the case substantially. The April ruling set the trajectory. It was not an early procedural decision. It was a merits-driven assessment after discovery, focused on what the record could actually support. That ruling reshaped the case in several important ways. It clarified that many of the claims failed for reasons grounded in legal structure rather than public perception. Employment status, jurisdiction, and contract formation all played decisive roles in determining what could proceed. At the same time, the court allowed certain claims to move forward, particularly those tied to retaliation and contractual obligations. Those surviving theories reflected something more subtle. A shift in where legal risk often resides in modern workplace disputes. The settlement did not undo any of that analysis. It accepted it. What does this case reveal about power, proof, and perception? Earlier, this litigation offered a useful lens into how power, proof, and perception interact. The settlement shows how that interaction resolves. Perception drove the public conversation. From the beginning, the case was understood through competing narratives that invited audiences to take sides long before the pleadings had settled. But perception did not determine the legal outcome. It could not expand jurisdiction. It could not convert an unsigned agreement into an enforceable contract. It could not substitute for admissible evidence. Proof did the work that proof always does. It narrowed. It filtered. It transformed broad allegations into discrete questions anchored in documents, communications, and contemporaneous records. By the time the case reached its final stage, what mattered was not how the story felt, but what could be demonstrated. Power remained present throughout, but not in the way it is often imagined. Influence shaped the stakes and the visibility of the dispute, but it did not rewrite the legal standards that governed it. The court applied the same framework it would apply in any workplace case, even if the setting was far from ordinary. The end result reflects that hierarchy. Perception set the stage. Proof controlled the script. Power influenced the audience, not the outcome. What lessons should employers and practitioners take from how this ended? Strip away the names and the attention, and what remains is a fairly familiar legal arc. A workplace dispute arises in a setting that blurs professional and personal boundaries. Allegations are made, both legal and reputational. The case expands quickly, incorporating multiple causes of action and overlapping narratives. Discovery follows, and with it a more disciplined examination of the evidence. The court narrows the issues. What survives is more precise, more technical, and often less satisfying to anyone looking for a sweeping resolution. From there, the incentives shift. The cost of trial becomes concrete. The risks are no longer abstract. And the question becomes less about proving everything and more about resolving what remains. This case also reinforces something increasingly important. Even where underlying misconduct claims fall away, retaliation theories can persist. The alleged harm is not always tied to traditional employment actions. It may instead center on reputation, messaging, and the way narratives are managed in public spaces. That evolution matters because it expands the kinds of conduct that may be examined through a legal lens, even when the original allegations do not move forward. Why does this ending feel so incomplete? Because it is. Settlements are designed to end disputes, not to explain them. They provide closure without resolution, finality without full transparency. They are, by their nature, unsatisfying for anyone seeking a definitive account of what happened. And yet, they are the most common ending to cases like this. In that sense, the conclusion here is entirely consistent with the system in which it unfolded. The case did not fail to deliver an answer. It delivered the answer the legal process is structured to give. A narrowing of claims. A testing of proof. A recalibration of expectations. And, ultimately, a decision to stop litigating before the final question is put to a jury. What is the real takeaway from how this case ended? The title of the film at the center of the dispute suggests a clean conclusion. A moment where something definitively ends. The litigation tells a different story. It suggests that in modern workplace cases, especially those that unfold in public view, resolution rarely comes in the form people expect. It does not arrive with a clear declaration of fault or vindication. It arrives more quietly, shaped by legal constraints, evidentiary realities, and the practical considerations that define every case once it moves from narrative to proof. What began as a story about conduct became a case about law. What felt expansive became precise. What seemed headed toward a dramatic ending instead resolved in silence. Not because the issues disappeared. But because, in the end, litigation only answers the questions it knows how to ask.
May 7, 2026
Labor and Employment
New Jersey Finalizes ABC Test Rule: A Measured Retreat, Not a Reset
After more than a year of delay and unusually forceful opposition from the business community, the New Jersey Department of Labor has adopted final regulations implementing the state’s “ABC” test for worker classification. The final rule reflects a meaningful course correction from the proposal first circulated in 2025. It is narrower, more measured in tone, and less overtly targeted at particular industries. But it does not alter the underlying premise. New Jersey continues to place a heavy burden on businesses seeking to classify workers as independent contractors, and these regulations reaffirm that approach with greater clarity rather than greater flexibility. Clarity Arrives — on the State’s Terms The regulations operate across multiple statutory schemes, including the state’s wage-and-hour, wage payment, and unemployment compensation laws. At their core is the familiar but demanding ABC test. A worker is presumed to be an employee, and the hiring entity must establish all three elements to rebut that presumption: that the worker is free from control in both contract and practice; that the work is performed outside the usual course or places of the company’s business; and that the worker is engaged in an independently established trade or business. The significance of the final rule lies less in redefining those elements than in codifying how the Department expects them to be applied. In doing so, the rule closes off ambiguity that had previously allowed employers to rely more heavily on contractual structuring and industry convention. A Noticeable Step Back from the Edge The most notable feature of the final rule is what it no longer says. In several respects, the Department retreated from positions that would have pushed New Jersey’s already stringent framework even further. Most visibly, the rule abandons the proposal’s use of industry‑specific examples. Those examples — focused on rideshare drivers, construction trades, and similar roles — had been criticized as outcome‑driven. Their removal restores a measure of neutrality, even if it also leaves employers with less informal guidance. Equally significant is the Department’s reversal on its approach to legal compliance. The proposed rule suggested that steps taken to comply with other legal obligations (such as training, supervision, or similar controls) could still weigh in favor of employee status. The final rule rejects that approach, making clear that compliance‑driven requirements are not, without more, evidence of control. This change is likely to have practical importance for employers operating in regulated industries. The final rule also abandons several interpretive positions that would have expanded the concept of “control” or “place of business,” including the suggestion that required use of company software is inherently indicative of control, or that off‑site work could nonetheless be treated as occurring at the employer’s place of business based on its importance to the enterprise. Taken together, these deletions suggest a more restrained (and more defensible) regulatory posture. Refinements at the Margins The Department also introduced clarifications that, while modest, are directionally helpful. The rule confirms that existing statutory exemptions remain intact, avoiding any suggestion that the regulatory framework displaces those carve‑outs. It also addresses remote work directly, explaining that a worker’s home is not automatically part of the employer’s place of business; a point that carries particular relevance in a post‑pandemic workforce. These changes do not alter the structure of the ABC test. They do, however, narrow the risk that ordinary, compliance‑driven, or modern workplace practices will be recast as evidence of employment. The Core Framework Remains Firmly in Place Notwithstanding these revisions, the substance of the regime remains unchanged in the respects that matter most for employers. The burden of proof continues to rest entirely with the business. The inquiry remains fact‑driven and cumulative, rather than formalistic. And, critically, the rule reiterates that commonly relied‑upon indicia of independent contractor status (including written agreements, the use of business entities, or even the existence of multiple clients) are not dispositive. In practice, the most difficult element will continue to be the requirement that the work fall outside the company’s usual course of business. Where a worker is performing the same core services that define the enterprise, the final rule offers little comfort. The revisions do not relax that standard; they merely clarify how it will be assessed. A Short Runway to Implementation The rule is expected to be published in June 2026 and to take effect on October 1, 2026. That timeline leaves a limited window for employers to reassess existing classifications. Given New Jersey’s long‑standing focus on misclassification, and its willingness to pursue significant enforcement actions, the expectation should be that the clarified standards will be actively applied. A More Tempered Rule, But No Easier Path In the end, the Department did not abandon its approach; it refined it. The final rule is less aggressive in tone and more attentive to practical business realities than the version initially proposed. It removes several features that had appeared designed to expand the reach of the ABC test at the margins. But the central proposition remains the same. New Jersey is not seeking to make independent contractor classification easier. It is seeking to make the rules clearer and ensure they are consistently enforced. For employers, that clarity is useful, but it also eliminates any remaining doubt about the rigor of the standard they are expected to meet.
May 7, 2026
Commercial Litigation
From CARES Act Relief to CARES Act Enforcement: PPP and ERC Risks Are Rising
When Congress passed the CARES Act in March 2020, it did more than inject liquidity into the economy through programs like the Paycheck Protection Program (PPP). It also created a parallel set of compliance obligations that are only now coming into sharper focus. If that sounds familiar, it should. In a prior blog post, I warned about the Employee Retention Credit (ERC) deadline quietly creeping up on businesses. That dynamic, where relief programs created at the same moment begin to generate legal exposure years down the line, is not unique to ERC. PPP is now entering that same phase, but with a more aggressive enforcement backdrop. While ERC issues often surface through a lack of IRS administrative action and taxpayers facing looming deadlines to file an action in court, PPP is increasingly appearing in the form of civil investigations because of looming government deadlines. And the Department of Justice is running out of time. Most PPP-related fraud claims are governed by statutes of limitation that trace back to the earliest loans issued in 2020. As those deadlines approach, DOJ is not winding down its efforts; it is accelerating them. The result is a noticeable shift in how these cases are being pursued. One of the clearest indicators is the surge in Civil Investigative Demands, or CIDs. These are not informal inquiries. A CID allows the government to compel documents, written responses, and sworn testimony, often before a lawsuit is filed. In practice, it is a tool designed for speed, used when the government needs to build a case and preserve claims before time expires. What might have been a slow-moving inquiry a year ago is now being compressed into a much tighter timeline. Investigations are more targeted, more coordinated, and increasingly driven by data: loan size, forgiveness certifications, and application representations are all being evaluated with renewed urgency. But there is another dynamic at play. One that is harder to see and harder to measure. PPP loan data is, by and large, public. That transparency was intended to promote accountability. In practice, it has also created fertile ground for False Claims Act whistleblower activity. There is growing speculation that a meaningful number of PPP investigations are being fueled by qui tam filings: complaints brought by private relators on behalf of the government. The challenge, of course, is that qui tam actions are filed under seal. They are confidential by design. That means a business receiving a CID has no way of knowing whether the investigation stems from internal government analysis, a data-driven flag, or a whistleblower complaint. Nor is there any immediate way to assess the credibility or motivation behind the underlying allegations. In other words, the investigation may already be several steps along before the target even knows it exists. For businesses and their counsel, that uncertainty adds another layer of complexity. You are not just responding to the government, you are potentially responding to an unseen relator, with unknown information and unknown incentives, whose allegations have already cleared at least an initial threshold of scrutiny. That reality reinforces the broader point: We are at an inflection point where CARES Act relief is transitioning into CARES Act enforcement. ERC deadlines are closing in. PPP statutes of limitation are approaching. And the government is actively working, possibly with the assistance of private whistleblowers, to ensure that it does not leave potential claims on the table. So it is important to understand what it means if your company is caught in the crosshairs of scrutiny. A CID is not something to set aside or address casually. It is the start of a serious engagement with the government, and the response strategy needs to reflect that reality. Early assessment of exposure, careful control of the narrative, and thoughtful engagement can often make the difference between a manageable resolution and a much more costly outcome. At the same time, it is worth remembering that not every PPP case fits the narrative of fraud. Many businesses were navigating unprecedented uncertainty in real time, making decisions based on guidance that evolved rapidly. Certifications made in 2020 are now being revisited with the benefit of hindsight, and sometimes with a level of scrutiny that overlooks the context in which those decisions were made. That nuance matters. And it is often where experienced counsel can add the most value. The broader takeaway is this: the same legislation that created opportunity in 2020 is now creating exposure in 2025 and beyond. ERC and PPP may follow different enforcement paths, but they share a common origin, and increasingly, a common sense of urgency. Add in the reality of sealed qui tam filings and public data-driven scrutiny, and the enforcement landscape becomes even more complex. In fact, that urgency just got a small, but notable, twist. As of April 27, 2026, the IRS introduced a new option for taxpayers whose ERC claims have been disallowed: the ability to request additional time to pursue administrative review by effectively tolling the clock before heading to court. In theory, this gives businesses a bit of breathing room when deadlines are tightening and pressure is building. In practice, however, it’s a brand-new procedural tool with very little track record, limited eligibility, and plenty of unanswered questions about how often it will be granted or how smoothly it will function. In other words, just as the enforcement environment is accelerating, the IRS has added a potential off-ramp, but whether it’s a reliable one or just another layer of complexity remains to be seen. The government is watching the clock. You should be too. If you are seeing an uptick in PPP-related inquiries or CIDs, or dealing with ERC issues as those deadlines approach, you are not alone. These matters are becoming more common, more compressed, and more consequential. It may be time to call in counsel. Because when the clock is running out, or the government is knocking at your door, the difference between exposure and resolution is strategy.
May 6, 2026
Labor and Employment
ICE’s Updated Form I‑9 Inspection Guidance: What Employers Need to Know
For more than three decades, Form I‑9 has been a cornerstone of U.S. employment eligibility verification. Every employer—regardless of size, industry, or location—is required to complete and retain a Form I‑9 for each employee hired after November 6, 1986. While the form itself has evolved over the years, the underlying obligation has remained constant: employers must verify identity and work authorization, maintain accurate records, and be prepared for inspection by U.S. Immigration and Customs Enforcement (ICE). But in 2026, ICE issued updated inspection guidance that significantly changes how the agency evaluates Form I‑9 errors. These updates don’t alter the form or the law, but they do reshape the compliance landscape. Many mistakes that were once considered minor or “technical” are now treated as substantive violations, meaning they can trigger immediate fines with no opportunity for correction during an audit. For HR leaders, compliance teams, and hiring managers, understanding these changes, and adjusting internal processes accordingly, is essential. How ICE I‑9 Inspections Work ICE conducts thousands of Form I‑9 inspections each year. When an employer receives a Notice of Inspection (NOI), they typically have three business days to produce their I‑9s and supporting documentation. ICE then reviews the forms for accuracy, completeness, and compliance with federal regulations. Historically, ICE distinguished between technical or procedural violations, which employers could correct within 10 business days, or substantive violations, which were immediately subject to penalties. This distinction mattered. A missing date, an incomplete field, or a minor oversight could often be corrected during the audit window, reducing or eliminating fines. The new guidance changes that calculus. What’s New in ICE’s Updated Fact Sheet ICE’s updated fact sheet expands the list of substantive violations, errors that cannot be corrected once an audit begins. These include many issues that employers previously treated as minor administrative mistakes. Examples of errors now considered substantive: Missing employee date of birth in Section 1 Missing or incomplete employer attestation information in Section 2 Missing date of hire Missing document title, issuing authority, or expiration date—even if a copy of the document is on file Missing rehire date in Supplement B Improper use of the Spanish‑language Form I‑9 outside Puerto Rico Deficiencies in electronic I‑9 systems, such as incomplete audit trails or signature issues These are critical as they cover all parts of the form including areas completed by the employer and employee. ICE also clarified that employers cannot rely on document copies to cure missing information. If the form itself is incomplete, the violation stands. Why This Matters: Increased Penalties and Higher Risk The consequences of these changes are significant. Substantive violations can result in fines ranging from hundreds to thousands of dollars per error. For employers with large workforces or high turnover, cumulative penalties can escalate quickly. Accordingly, industries at heightened risk include: the hospitality business, retail stores, construction companies, various forms of manufacturing businesses, certain healthcare providers, staffing and recruiting agencies, and federal contractors. These sectors often rely on decentralized hiring, multiple onboarding locations, or large volumes of I‑9s, conditions that increase the likelihood of errors. ICE’s updated guidance signals a stricter enforcement posture and a reduced tolerance for administrative mistakes. Employers can no longer assume that routine errors will be fixable during an audit. What Employers Should Do Now Conduct a proactive internal I‑9 audit. Review all existing I‑9s — especially older forms completed under prior guidance — to identify and correct errors before ICE ever requests them. All covered I-9s that could be audited include terminated employees for the last three years, which underscores how critical record keeping is for I-9 compliance. Employers should work with immigration compliance counsel to ensure corrections are made properly. Strengthen onboarding and I‑9 completion procedures. Ensure HR staff and authorized representatives understand the new classifications and the importance of complete, accurate entries in all sections of the form. Real-time review of the completion of form I-9 is recommended as substantive violations are incorporated into sections completed by the employee as well as the employer. Review your electronic I‑9 system. Confirm that your system meets DHS requirements for: Audit trails Electronic signatures Data integrity Proper indexing and retrieval Auto‑population features should be reviewed to ensure they do not create incomplete or inaccurate fields. Retrain all I‑9 preparers. Training should cover: Proper document review Accurate recording of hire dates and document details Correct use of the preparer/translator section Proper reverification procedures Ensure proper use of alternative verification procedures. If your organization uses DHS‑authorized remote verification, confirm that all eligibility requirements, such as E‑Verify participation, are consistently met. The Bottom Line ICE’s updated Form I‑9 inspection guidance represents a meaningful shift in enforcement. Employers now face higher stakes and less flexibility when errors occur. The organizations that invest in strong I‑9 practices today through audits, training, and system improvements will be far better positioned to withstand increased scrutiny. In the current environment, proactive compliance is not optional. It’s essential risk management. For more information visit: Form I-9 Inspection Under Immigration and Nationality Act § 274A | ICE
May 5, 2026
Family Law
AI is Coming to Divorce Court
Divorce litigation has always been a search for the truth. For decades, divorce attorneys have asked the same fundamental questions: Who owns what property? How should assets be valued and divided? What income is available for support? And when children are involved, what arrangements truly serve their best interests? Throughout the years, those questions have not changed. What has changed is the technological landscape in which they are being asked. Artificial intelligence (“AI”) is now entering nearly every profession, and the practice of matrimonial law is no exception. While AI cannot replace the judgment, discretion, and ethical responsibilities of experienced attorneys and judges, it is beginning to influence how divorce cases are investigated, prepared, and litigated. Three developments, in particular, suggest that divorce law is entering a new technological era: the use of AI to uncover financial information, the emerging risk of fabricated digital evidence, and the increasing tendency of litigants themselves to turn to AI for guidance. The Search for Hidden Assets One of the oldest battles in divorce litigation is the search for undisclosed assets. For as long as equitable distribution and community property regimes have existed, spouses have attempted to conceal income, transfer funds into undisclosed accounts, or minimize the apparent value of businesses and investments. In complex cases, uncovering the true financial picture can require months of discovery and painstaking review of bank records, tax returns, and corporate documents. AI is beginning to assist in this process. AI-driven financial analysis tools can review vast quantities of financial data and identify unusual patterns that might otherwise escape detection. These systems can flag repeated transfers to unfamiliar accounts, discrepancies between reported income and actual spending, or unexplained fluctuations in business revenues. In cases involving closely held businesses or high volumes of transactions, AI can help identify areas that warrant closer scrutiny far more quickly than traditional manual review. For example, recently a case concerning a professional practice with thousands of annual transactions, used AI-assisted analysis which detected a recurring pattern of transfers to an entity, newly formed shortly before the commencement of divorce proceedings — an anomaly that justified targeted discovery and expert evaluation. Still, technology alone cannot resolve these issues. AI can identify anomalies, but determining whether those anomalies reflect legitimate business activity or intentional concealment requires professional judgment. Forensic accountants, financial experts, and experienced matrimonial attorneys remain indispensable in interpreting results and presenting them persuasively to the court. AI has become — and with constant innovation will continue to be — a powerful investigative tool. Yet it can never substitute for the human capacity to perceive and interpret the subtle factual nuances of a case, apply the law accordingly, and ultimately serve as the finder of fact. The Emerging Threat of Artificial Evidence If AI can help uncover the truth, it can also be used to manufacture it. Courts across the country are beginning to confront the growing phenomenon of AI-generated content, often referred to as “deepfakes.” With increasingly sophisticated software, it is now possible to create highly realistic audio recordings, text messages, photographs, and even video footage depicting events that never occurred. In the emotionally charged context of divorce litigation, the risk of misuse is significant. A fabricated text message purporting to show financial misconduct, or a manipulated audio recording suggesting threats or coercion, could be introduced as evidence. Even if ultimately disproven, such materials may complicate litigation, increase costs, and prolong disputes, particularly at early stages when courts are making interim decisions about custody, support, or exclusive occupancy of the marital residence. Family law practitioners have always confronted questions of authenticity, but AI raises the stakes considerably. As digital evidence becomes easier to fabricate, courts will likely require more rigorous methods of authentication. Judges, attorneys, and forensic experts will increasingly need to assess not only what evidence appears to show, but how it was created, preserved, and verified. The law of evidence has always evolved alongside technological change. AI is likely to accelerate that evolution. When Litigants Turn to Artificial Intelligence Another development is already underway, though often less visible. Individuals contemplating divorce increasingly turn to AI tools to educate themselves about the legal process before consulting an attorney. AI systems can explain general legal concepts, summarize procedures, and even generate draft settlement proposals. I experienced this first-hand when moments after sending a proposed settlement offer to my client, she ran it through ChatGPT and was advised that the proposed offer was suitable. In some respects, this trend may be beneficial. Divorce is often intimidating and confusing, and access to basic information may help individuals better understand their rights and obligations. At the same time, divorce law is highly nuanced and intensely fact specific. Outcomes often depend on subtle distinctions in financial circumstances, statutory interpretation, and judicial discretion, factors that cannot be reduced to generalized responses. While AI can provide information, it cannot provide strategy, advocacy, or judgment. Those functions remain the province of experienced legal professionals who understand not only the law, but how courts apply it in practice. New Technology, Old Questions, and the Future of Matrimonial Litigation AI will almost certainly change the manner in which divorce cases are prepared and litigated. Financial investigations may become faster and more data-driven. Evidentiary standards may tighten in response to synthetic digital content. Clients may arrive at initial consultations better informed, and sometimes misinformed, by AI-generated advice. Yet the essential work of divorce law will remain stubbornly human. Lawyers must still exercise judgment, advise clients through emotionally charged decisions, and advocate for fair outcomes. Judges must still evaluate credibility, weigh evidence, and craft equitable resolutions for families navigating a profound personal change. In Closing As AI becomes more embedded in the divorce process, courts and practitioners will need to adapt thoughtfully, embracing technology where it enhances accuracy and efficiency, while remaining vigilant against its misuse. The future of matrimonial litigation will be shaped not by machines alone, but by the wisdom with which legal professionals choose to use them.
May 5, 2026
Trademark and Copyright
AI Copyright Litigation Continues as NVIDIA Training Data Case Moves Forward
A ruling earlier this month by Judge Jon S. Tigar in Nazemian et al. v. NVIDIA Corp., No. 4:24 cv 01454 JST (N.D. Cal. filed Mar. 8, 2024), declining to dismiss key claims in the case following NVIDIA’s motion to throw out portions of the complaint, signals that courts continue to be reluctant to resolve copyright disputes concerning AI training and outputs at the pleading stage. The ongoing class action against NVIDIA demonstrates why disputes over AI training data sourcing will continue to shape copyright doctrine well beyond the first wave of generative AI cases. In Nazemian a class of authors, including Abdi Nazemian, Brian Keene, Stewart O’Nan, Susan Orlean, and Andre Dubus III, allege that Nvidia violated the Copyright Act by copying and storing unauthorized digital copies of their books to train its NeMo Megatron large language models, asserting claims for direct infringement, contributory and vicarious infringement, statutory damages, and injunctive relief. They also make claims under the Digital Millennium Copyright Act, alleging removal of copyright management information. Central to the case are the plaintiffs’ allegations that NVIDIA’s training datasets incorporated pirated works sourced from “shadow libraries,” including Books3 (derived from Bibliotik), The Pile, SlimPajama, and Anna’s Archive, each of which allegedly contain massive numbers of unauthorized copies of copyrighted books. Unlike earlier AI disputes that focused on whether model outputs were substantially similar to copyrighted works, the Nazemian action frames infringement as complete at the point of copying of the inputs into the model when works were allegedly downloaded and retained, regardless of whether subsequent model training is transformative. In allowing the direct infringement and related claims to proceed, the court made clear that fair use presents a mixed question of law and fact not suited for resolution on a Rule 12(b)(6) motion, particularly where the provenance, scope, and scale of the copied materials remain disputed. The ruling ensured that NVIDIA would not obtain an early exit from the litigation and underscored that allegations of unlawful data acquisition alone can carry a complaint past the pleading stage. The Nazemian litigation sits within an expanding ecosystem of AI copyright cases, which at present comprises more than 50 such actions pending in U.S. federal courts, including actions involving Meta Platforms, Anthropic, and OpenAI. While recent fair‑use rulings have not stemmed the AI litigation tide, the legal discussion has shifted from abstract debates about innovation policy to examinations of data sourcing, internal decision‑making, and statutory compliance. Even as courts acknowledge that AI training may satisfy the “transformative use” inquiry, they continue to treat market harm, licensing markets, and unlawful acquisition as fact‑dependent questions. It appears that so long as AI developers rely on massive training data sets and courts remain skeptical of practices involving pirated or unlicensed sources, copyright litigation over AI training models will continue to pervade.
May 4, 2026
Mergers and Acquisitions
First Time Buyers: Avoiding Analysis Paralysis
For first time buyers, the diligence phase of an acquisition can be overwhelming. Every document review, identified risk, and unanswered question, can lead to hesitation, and hesitation can quickly turn into something known as “analysis paralysis.” This can be a dangerous place for a transaction as it leads to a loss of momentum or even loss of the deal entirely. It is important for first time buyers to understand that no deal is without risk. You cannot eliminate risk entirely, but you can understand it, quantify it, and allocate it appropriately. When first time buyers recognize this reality early in the process, they are far more likely to move through the diligence process with confidence and ultimately have a successful closing. Below we look at some of the ways first time buyers can help to avoid analysis paralysis and build in the kind of protections that will allow them to move forward with ease. Bring in Advisors Early One frequent error among first-time buyers is delaying the engagement of experienced advisors, especially legal counsel. Legal counsel should be involved before the Letter of Intent (LOI) is signed, as their early participation enables the deal team to identify key issues, recognize potential risks, and structure the transaction to align price with risk effectively. Early involvement of advisors ensures that, upon reaching the diligence stage, the team is prepared to execute a strategy that has been thoughtfully designed from the outset, rather than developing one mid-process. Shifting Risks To allocate certain risks from the purchaser to the seller, it is essential to include precise representations and warranties, along with unambiguous indemnification clauses. When concerns arise, such as outstanding liabilities or matters identified during due diligence, targeted indemnities can significantly strengthen the buyer's protection. These safeguards enable buyers to move forward with a transaction even when not every issue has been conclusively resolved. Financial Structuring The financial structure of a transaction is equally significant as the inclusion of contractual safeguards. Transactions may be designed to incorporate financial protections for the buyer, such as escrow arrangements, holdbacks, or promissory notes. Additionally, earnouts provide further protection, particularly in situations where future company performance remains uncertain. By linking a portion of the purchase price to post-closing results, buyers can mitigate the risk of overpayment while enabling sellers to realize their preferred valuation. Deal Momentum One of the most important considerations for first time buyers is maintaining deal momentum. Conditions can shift quickly as transactions progress from market conditions to financing terms to business performance. If the diligence process is stalled, it allows more time for these conditions to shift, often leading to increased risk or erosion in value. When sellers lose confidence in the transaction, they could begin to entertain a competitor’s bid. Shifting conditions could also lead to a need for price adjustments or renegotiation of other terms. This is exactly where advisors prove invaluable. They can help buyers to distinguish between those issues that need immediate attention and are true red flags, as opposed to those that can be addressed through deal structure. Advisors can instill the kind of confidence in first time buyers that allows deals to move forward, even if every variable is not perfectly resolved. For those buyers entering the M&A process for the first time, the key is not to avoid risk, but to manage it intelligently. With the right team and a disciplined approach to maintaining momentum, buyers can avoid analysis paralysis and position themselves for a successful closing.
May 4, 2026
Estates and Trusts
New York Trust & Estate Disputes: When a Loved One’s Death Becomes a Battlefield
When Jane Doe died, her family assumed everything was in order. She had always been organized. She talked openly about “having her papers done.” Her three children gathered a few days after the funeral, expecting a straightforward process. Instead, two different estate documents surfaced. One was an older will naming all three children equally as beneficiaries to her estate. Another, signed shortly before her death, left most of the estate to one child and excluded the others. Accusations followed, and what should have been a period of mourning quickly turned into conflict that led to years of litigation. This is how estate litigation often begins. Estate litigation is not just about money. It is about family dynamics, legal rights, fiduciary responsibilities, and the emotional weight of unresolved issues that come to light after someone dies. In New York, these disputes are common, and when they arise, the consequences can be significant, if they are not handled promptly and appropriately. Will Contests In New York, a will can be challenged by filing objections in Surrogate’s Court during the probate process, a court-supervised proceeding in which a will is submitted for approval and an executor is authorized to administer the estate. The most common grounds for objecting to the probate of a will are: Lack of Capacity The testator must be at least 18 years old and of “sound mind” at the time the will is signed. This means they must understand the nature of making a will, the extent of their assets, and who their natural heirs are. A diagnosis of dementia or other cognitive impairment does not automatically invalidate a will, but it can be used as evidence that capacity was lacking at the time of execution. Undue Influence This occurs when someone in a position of trust or power over the testator pressures or manipulates them into changing their will in a way that does not reflect their true wishes. Courts look for evidence of isolation, dependency, and a beneficiary who was heavily involved in the will’s preparation or execution. Improper Execution New York law has strict and formal requirements for the execution of a valid will. Among other requirements, it must be signed by the testator at the end of the document, in the presence of at least two witnesses, who must also sign and understand they are witnessing a will. A failure to follow these steps, even a technical one, can be grounds to void the document entirely. Fraud or Forgery Fraud occurs when the testator was deceived into signing a will, such as being told they were signing a different document altogether. Forgery involves a signature or document that was fabricated without the testator’s knowledge or consent. Had Jane’s family had proper planning and legal guidance, they might have acted sooner and avoided litigation. Fiduciary Disputes Will contests are not the only source of conflict. Equally common and damaging are disputes involving fiduciaries. A fiduciary is a person or organization with a legal obligation to act in someone else’s best interest. In the context of estates and trusts, this means managing estate funds, real property, and other assets on behalf of the people entitled to benefit. Executors, estate administrators, and trustees all serve in this role, and all carry the same fundamental duty: to put the interests of the beneficiaries first. Consider what happened to Jane’s estate after the will dispute settled. Her son John was appointed executor. Months passed. Then several years. Distributions were delayed. Phone calls went unreturned. When his sisters finally demanded a formal accounting of his actions as executor, they learned that John had been using estate property without paying rent, had sold the property for less than market value, and had made fund transfers that could not be explained. Disputes arise when there are allegations that a fiduciary is not acting in the best interest of the beneficiaries or trustees, or is breaching their fiduciary duty. Some common disputes include claims that the fiduciary is: Self-dealing or has a conflict of interest Misusing or mishandling assets Not exercising the appropriate care, skill, and caution when managing the assets Treating beneficiaries unfairly or unequally Not acting transparently or failing to provide beneficiaries or trustees with timely, accurate information, or not complying with formal or informal accountings In addition to seeking an accounting, a beneficiary or trustee can request the removal of a fiduciary when they can demonstrate that the fiduciary breached their fiduciary duty and acted in a way that was detrimental to the beneficiaries. They can also request that an executor, administrator, or trustee be surcharged, meaning the fiduciary is personally liable for the harm caused and can be required to pay money back to the estate or trust to compensate for financial losses caused by their actions. When to Speak to an Attorney Jane’s children might never have avoided the conflict entirely, but had they consulted an attorney when the second will surfaced, before accusations hardened into positions and positions hardened into litigation, they would have understood their options. They might have learned whether there were grounds to challenge the document, what evidence would matter, and whether an early demand for information could have clarified the picture before it became a lengthy legal battle. If you are facing uncertainty about a will, concerned about how an estate or trust is being managed, or simply unsure whether something feels wrong, the right time to speak with an attorney is now.
May 4, 2026
Labor and Employment
Labor and Employment State Law Watch: Key Changes & Trends
Below is a roundup of recent labor and employment law developments, regulatory updates, and notable workplace trends that may affect employers and human resources professionals, with a focus on compliance considerations, risk management, and emerging issues shaping the modern workplace. Maine Paid Family and Medical Leave Benefits Become Available - Effective May 2026 Maine is implementing a comprehensive paid family and medical leave (PFML) program, with employee benefits becoming available beginning in May 2026. The law establishes a statewide system allowing eligible employees to take up to 12 weeks of job-protected, paid leave in a benefit year for specified family, medical, and personal safety reasons. The program is administered by the Maine Department of Labor and funded through employer and employee payroll contributions, which began in January 2025. Eligibility is based on an employee’s earnings during the applicable base period (generally the first four of the five most recently completed calendar quarters), and the law applies broadly to nearly all Maine employers. Covered leave includes an employee’s own serious health condition, bonding with a new child, caring for a family member with a serious health condition, certain military-related needs, and “safe leave” for issues related to domestic violence, sexual assault, or stalking. The 12-week cap applies in the aggregate across all qualifying leave types. The law effectively creates a state-administered wage replacement and job protection framework, requiring employers to integrate PFML into existing leave policies and workforce planning. While the state administers benefits, employers remain responsible for payroll compliance, job restoration obligations, and coordination with other leave laws such as the federal Family and Medical Leave Act. Action Items: Employers should confirm compliance with payroll contribution requirements and ensure systems are properly configured. Leave policies should be updated to incorporate PFML rights and coordination with existing PTO and FMLA policies. Employers should also train HR personnel on eligibility determinations, job protection requirements, and claims coordination, and begin planning for staffing coverage during employee absences once benefits become available. New York Secure Choice Savings Program Registration Deadline - Effective May 15, 2026 New York is advancing its state-facilitated retirement initiative by imposing a firm deadline for mid-sized employers. Under the Secure Choice Savings Program, employers with 15 to 29 employees that do not sponsor a qualified retirement plan must register and participate in the program. The law effectively deputizes employers into facilitating employee retirement savings through payroll deductions, even where the employer has opted not to offer its own plan. While the program does not require employer contributions, it does require administrative coordination and ongoing compliance. Action Items: Employers in scope should promptly register for the program, ensure payroll systems can accommodate required deductions, and prepare employee communications. Employers that prefer greater plan flexibility may wish to consider implementing a private retirement plan instead. Utah Expanded Restrictions on Non-Compete Agreements - Effective May 6, 2026 Utah has enacted targeted legislation significantly limiting the enforceability of non-compete agreements in certain professional sectors. Health Care Workers (HB 270): Employers may no longer require licensed health care workers to enter into non-compete agreements. The law also prohibits non-solicitation provisions that would prevent these workers from informing patients of their current or future place of employment. This represents a notable shift toward prioritizing patient continuity of care over restrictive covenants. Veterinarians (SB 111): Similarly, Utah now restricts the use of non-competes for veterinarians. Such agreements are prohibited unless the veterinarian holds at least a 5% ownership interest in the business. The law reflects a policy judgment that mobility should be the default absent a meaningful ownership stake. Action Items: Employers should review and revise existing restrictive covenant agreements, particularly in the healthcare and veterinary sectors. Template agreements, onboarding materials, and exit procedures should be updated to ensure compliance with the new limitations. Washington Expanded Personnel File Access and Enforcement - Effective May 1, 2026 Washington has finalized amendments to its personnel file regulations through WAC 296-126-050, aligning agency rules with the broader statutory overhaul enacted in 2025. Under the updated framework, employers must provide employees — and certain former employees — with access to a significantly expanded set of personnel records within a defined timeframe. The rule now expressly defines “personnel file” to include not only core payroll and employment records, but also job applications, performance evaluations, disciplinary records (including closed matters), leave and accommodation records, and employment agreements, if maintained. The amendment imposes a 21-calendar-day deadline to provide access following a request and extends coverage to former employees for up to three years post-separation. Importantly, the rule incorporates a private right of action, allowing employees to pursue claims for noncompliance after providing notice. While much of the substantive expansion originates from the 2025 statute, the updated regulation solidifies these obligations and removes prior ambiguity around timing, scope, and enforcement. Action Items: Employers should review and update personnel file policies to reflect the expanded definition and ensure all responsive documents are consistently maintained and retrievable. Internal processes should be implemented to track and respond to requests within the 21-day deadline. Employers should also coordinate with HR and legal teams to identify privileged or sensitive materials before disclosure and assess potential litigation exposure associated with noncompliance.
May 1, 2026
Business
Maryland Franchise Reform Act Passes
The Maryland General Assembly has enacted, by overwhelming majorities, the Franchise Reform Act (Senate Bill 415 & House Bill 730), marking the first significant changes to the Maryland Franchise Registration & Disclosure Law (the “Maryland Franchise Law”) since its enactment in 1981. Governor Moore is expected to sign the legislation into law shortly, and it will become effective on October 1, 2026. The House sponsor and primary driver of the legislation, Delegate Marc Korman, introduced the bill resulting from numerous constituents who had raised concerns about the franchise registration process in Maryland, concerns shared by franchisors nationwide. However, while part of the law will encourage streamlining the Maryland franchise sales registration process, it also provides changes that will be helpful to Maryland franchisees and Maryland-based franchisors. Having focused my practice on franchise law in Maryland for more than 25 years, I was privileged to be asked by Delegate Korman to work closely with him and his staff on the drafting and revising of the legislation, which included conducting workgroup focus meetings with members of the Maryland State Bar Association (“MSBA”) to gather feedback, and testifying on behalf of the MSBA in favor of the legislation multiple times throughout 2025 and 2026. The Maryland Franchise Law protects people considering the purchase of a franchise from being misled or under-informed when deciding whether to buy. The law requires franchisors to prepare a prospectus (called a “Franchise Disclosure Document” or an “FDD”) detailing a wide variety of information and submit it to the Securities Commissioner, who is an officer with the Maryland Office of the Attorney General (the “OAG”), and obtain that agency’s approval to sell franchises in Maryland. That approval, called registration, must be renewed each year in which the franchisor continues to sell franchises to Maryland residents or for the operation of the franchised business in Maryland (collectively, “Maryland Franchises”). Until now, the law has solely addressed the franchise sales process, rather than the ongoing relationship between the franchisor and the franchisee. The Maryland Franchise Reform Act does the following: For the Benefit of Franchisors Generally Following the bill’s initial introduction and passage by the House of Delegates during the 2025 session, the Securities Commissioner established a pilot program intended to expedite franchise registration renewals. The approved law requires the Securities Commissioner to continue the pilot program and to report to the legislature in 2031 on the program’s results, as well providing data on other aspects of the registration process, and an analysis of how Maryland’s exemptions from registration for experienced franchisors compares with those of other states that require registration before sale of a franchise. For the Benefit of Maryland Franchisors The law limits private parties who can sue a franchisor for violation of the Maryland Franchise Law solely to Maryland franchisees. This will eliminate the ability of out-of-state franchisees to use the statute as a weapon in disputes with franchisors that are or were headquartered in Maryland, which has been a deterrent to franchising from Maryland as compared to nearby states. For the Benefit of Franchisees Consistent with the Maryland Franchise Law’s purpose, parts of the law will benefit franchisees. Specifically: For the first time, the Maryland Franchise Law addresses the imbalance of power between franchisees and franchisors within the ongoing relationship, by prohibiting a franchisor from restricting or inhibiting Maryland franchisees from associating with other franchisees within their brand for the franchisees’ common benefit “for any lawful purpose” — which could include collectively raising grievances with the franchisor for the franchisees’ mutual benefit. Maryland franchisees will have the right to sue in Maryland courts for injunctive relief and damage suffered, if the franchisor violates this prohibition. This provision is similar to “free association” laws passed in several other states, including California and Illinois. The time during which a franchisee may bring a private claim for violation of the law’s registration or disclosure provisions has changed in a manner that benefits certain franchisees. Franchisees will now have until the earlier of four years from buying the franchise rights or two years after the date the franchise opened to the public. The limitations period was three years from the date the franchise rights were purchased, regardless of when the franchised business opened. The advantage will be for retail franchises that often take two years or more from buying the franchise to open due to challenges in securing an acceptable site and constructing the franchise, since those owners then will have time after opening to determine the viability of their investment and whether the franchisor violated the Maryland Franchise Law in selling the franchise. For franchises that open within a short time of purchasing the rights, the judgment of the MSBA and the legislature was that two years from opening is sufficient for a franchisee to make that determination and commence a lawsuit.
April 30, 2026
Bankruptcy
From Purdue to Pat McGrath: Are Opt-Out Third-Party Releases Truly Consensual?
Judge Laurel Isicoff’s April 21, 2026, decision confirming the Chapter 11 plan of Pat McGrath Cosmetics LLC answers in the affirmative the question left open by Harrington v. Purdue Pharma: whether third‑party releases imposed through an opt‑out mechanism can be truly consensual. Once valued at more than $1 billion following a 2018 private‑equity investment, the company struggled with chronic inventory shortages and mounting debt, ultimately filing for Chapter 11 in January 2026 to restructure its capital stack and preserve the brand’s core value. Emphasizing that Purdue addressed only nonconsensual third‑party releases and expressly left open the legality of consensual releases, the court held that an opt‑out mechanism may constitute consent where creditors receive clear, conspicuous notice, understand the consequences of inaction, and are afforded a meaningful opportunity to decline the release. Drawing analogies to class actions and core bankruptcy voting rules, the court emphasized that the Bankruptcy Code routinely binds parties based on inaction after adequate notice, and that Purdue deliberately declined to define the contours of “consent.” Creditors who voted to reject the plan, or were deemed to reject, could not be bound absent affirmative consent—underscoring that opt‑out is not a one‑size‑fits‑all solution. The question of whether opt-out releases are consensual is soon going to be reviewed at the Circuit level. In the Second Circuit, Chief Bankruptcy Judge Carl L. Bucki of the Western District of New York found that opt‑out releases are not consensual and therefore prohibited by Purdue. In re Diocese of Buffalo, N.Y., 2026 WL 585099 (Bankr. W.D.N.Y. Feb. 27, 2026). Recognizing the absence of a controlling authority and the issue’s “public importance,” Judge Bucki certified a direct appeal to the Second Circuit under 28 U.S.C. § 158(d)(2), explicitly citing the growing inter‑ and intra‑circuit split. At the end of 2025, District Judge Denise Cote of the Southern District of New York reversed confirmation of an opt‑out plan, holding that the ability to opt out does not itself establish consent to release claims against non-debtors in In re GOL Linhas Aéreas Inteligentes S.A.,675 B.R. 125 (S.D.N.Y. Dec. 1, 2025). The GOL debtor has appealed, with briefing now headed to the Second Circuit. Meanwhile, the Fifth Circuit is confronting the same question from the opposite direction. In Container Store, District Judge Lee Rosenthal upheld confirmation of an opt‑out plan, concluding that the opportunity to opt out rendered the releases consensual and therefore permissible after Purdue. 676 B.R. 356 (S.D. Tex. Feb. 12, 2026). The U.S. Trustee appealed on April 10, teeing up appellate review. The Path McGrath decision adds momentum to a growing body of post‑Purdue case law confirming that consensual third‑party releases remain viable and that opt‑out mechanisms, when properly structured, can satisfy both due process and the Bankruptcy Code. Whether opt-out releases will remain viable is a question now destined for the Second Circuit and Fifth Circuit, and possibly back to the Supreme Court itself.
April 28, 2026
Commercial Litigation
Virginia Moves to Further Restrict Non-Compete Agreements
Virginia continues to restrict non‑compete covenants. On April 13, 2026, Governor Spanberger signed Senate Bill 170 (“SB 170”) SB170 - 2026 Regular Session | LIS, into law. SB 170 will materially limit the enforceability of non‑compete agreements in Virginia moving forward. For years, Virginia courts enforced narrowly tailored non‑compete agreements, and employers adopted non-competes across industries as a risk‑management tool. As of July 1, 2026, any company or employer doing business in Virginia should reexamine the use of non- competes. In many cases, it will no longer make economic or operational sense to use non-compete provisions. Under amended Virginia Code § 40.1‑28.7:8, a non‑compete becomes unenforceable if an employee is terminated without cause and the employer has not provided severance or other disclosed monetary compensation. This rule applies to all employees, regardless of seniority, compensation level, or role. Importantly, the law will not be retroactive, meaning that non-compete agreements in effect, and unmodified, before July 1, 2026, will remain enforceable. For Virginia business owners and HR professionals, the most important takeaway is this: a non‑compete can now be perfectly drafted and still fail entirely based on how the employee’s departure is handled. If your termination process is misaligned with your employment agreements, you may lose the very protection you thought you had purchased. The first practical impact of SB 170 is that termination decisions are now legally intertwined with enforceability. Employers should no longer wait until an employee resigns or is separated to consider whether a non‑compete will achieve the employer’s goals. That analysis needs to happen at the front end, when the employer makes an offer to an employee. Employers should be asking themselves whether they are truly willing to commit, in advance, to paying severance to preserve post‑employment restrictions. Employers should also decide which employees actually present a competitive threat worth that cost, rather than automatically rolling non‑compete language into every offer letter. A second major shift is that SB 170 extends far beyond the “low‑wage employee” focus of earlier Virginia legislation. This law applies just as much to executives, senior managers, sales professionals, and business development employees as it does to entry‑level staff. Employers who assume their leadership team or top performers are insulated from these changes are mistaken. Virginia law no longer treats non‑competes as a default option even at the highest levels of an organization, and employers should revisit every existing assumption about who may be bound by post‑employment restrictions. Unfortunately, SB 170 also leaves critical questions, as key terms in the statute are undefined. For example, SB 170 does not explain what constitutes a “for cause” termination, nor does it specify how much severance—or what type of compensation—is sufficient to preserve enforcement. That ambiguity virtually guarantees litigation. Employers relying on vague termination language, inconsistent cause determinations, or ad hoc severance arrangements are setting themselves up for disputes they are unlikely to win, particularly given that the statute authorizes attorneys’ fees and penalties of up to $10,000 per violation. As a result of SB 170, non‑competes are no longer “free.” Employers who want them to remain enforceable must ensure compliance and planning in all hiring decisions and offer letters. Employers should clearly define what constitutes for cause termination events in employment agreements, commit to severance or other post‑separation compensation in advance, and disclose separation pay or compensation at the time the employee signs the employment agreement and non‑compete. In many cases, once these costs are identified, businesses will decide that a non‑compete no longer makes economic sense for a given role. Between now and July 1, 2026, Virginia employers should take several concrete steps. First, review employment agreements and non‑compete templates for compliance with SB 170. Existing agreements should be inventoried so decision-makers know which employees are subject to post‑employment restrictions and which agreements may be amended or renewed in a way that triggers SB 170. Second, Employers should tighten termination provisions in employment agreements. Consider clearly defining for cause termination events to align with actual business practices and goals. Employers should resist the temptation to automatically renew non‑competes without reevaluating whether they are necessary and sustainable under the new framework. Finally, HR, legal, and management teams should be aligned before any termination decision involving a non‑compete holder is made. If a company intends to rely on a non‑compete provision going forward, it must either have a well‑documented for‑cause termination or pay severance exactly as disclosed in the employment agreement. Deviating from that plan after the fact is likely to render the restriction unenforceable. Beginning July 1, 2026, offer letters and employment agreements must be drafted with SB 170 squarely in mind. Severance obligations should be explicit, termination standards should be unambiguous, and the agreement should integrate cleanly with any separation or release documents the company typically uses. Ambiguity will not benefit the employer under this statute. Finally, as an alternative to non-compete provisions, consider refocusing your post-employment protective strategies. Confidentiality agreements, trade secret protections, data access controls, and narrowly tailored non‑solicitation provisions often provide more reliable and less expensive protection than non‑competes under Virginia’s current legal landscape. For some employers, shifting focus to these tools will reduce litigation risk while still safeguarding key business interests. SB 170 continues Virginia’s clear policy trend favoring employee mobility and limiting post‑employment restraints. Non‑competes are not gone, but they are no longer the default solution they once were. Employers who proactively adjust their agreements and offboarding strategies can still protect themselves effectively. Those who ignore these changes risk expensive disputes, unenforceable contracts, and penalties that could have been avoided with thoughtful planning.
April 28, 2026
Intellectual Property
Knowing Isn’t Enough: The Supreme Court Redefines ISP Liability for Piracy
When users pirate music, movies, or other creative works online, the internet service provider (“ISP”) supplying their connection may know more than you might think. Companies like Cox Communications receive thousands of automated notices identifying exactly which subscriber accounts are associated with illegal downloading — in Cox’s case, such notices accrued over a period of two years. In Cox Communications v. Sony Music Entertainment, decided March 25, 2026, the Supreme Court confronted a deceptively simple question: if an ISP knows a subscriber is using its service to steal copyrighted content and keeps providing that service anyway, is the ISP itself liable? A jury of the lower court said “yes,” issuing relief to the tune of roughly $1 billion. The Supreme Court has now unanimously reversed the jury’s decision, although the Justices aren’t in agreement with respect to their rationale and extent. Writing for the majority, Justice Thomas held that an ISP can only be liable for contributing to its users' infringement if it intended that the provided service be used for infringement, particularly in two narrow circumstances: 1) if the ISP actively encouraged the illegal activity, or 2) if the service itself was essentially designed for piracy. The Court found that Cox never promoted piracy and, in fact, issued warnings to and suspended infringing accounts. The majority made clear that simply knowing about infringement and failing to cut off service to every potential infringing account (and, indeed, the record suggests that Cox did not know with total particularity which accounts engaged in infringement) is not enough. Justice Sotomayor, concurring, agreed Cox was not liable but warned that the majority had gone too far in strictly defining only two theories of “intent.” She argued that the ruling diminishes the DMCA safe harbor, which was specifically designed to give ISPs an incentive to crack down on repeat infringers in exchange for legal protection. If ISPs can't be held liable regardless of the very strictly defined theories of intent, that no longer has material effect. Justice Jackson joined Justice Sotomayor in her concurrence. For technology providers, implementing procedures to warn against infringement, and even taking action such as suspending service, may successfully ward off secondary liability. For copyright holders, particularly in the music, film, and entertainment industries, this decision has the potential to present a significant setback for IP enforcement, as avenues for pressuring ISPs to police their networks have been substantially narrowed. Going forward, rights holders may need to focus enforcement efforts more directly on individual infringers or on platforms that actively facilitate piracy, rather than on the companies providing the underlying internet connections. While the decision is a major win for ISPs, the Sotomayor concurrence reasoning could signal that future litigation (or future legislation) may set new standards.
April 27, 2026
Labor and Employment
Substance Use Policies and Legal Cannabis: Balancing Compliance and Judgment in a Rapidly Shifting Landscape
For years, workplace substance use policies were easy to administer and easy to defend. A positive drug test typically ended the analysis. That is no longer true. Legal cannabis has introduced a level of complexity that many employers have not fully absorbed. The issue is not whether employers can maintain drug-free workplaces. They can. The issue is whether their policies reflect the legal distinctions that matter now and whether their decision-making will hold up under scrutiny. In 2026, the risk is not permissiveness. It is imprecision. The instinct to rely on federal law is understandable, but often misplaced. Cannabis remains illegal under the Controlled Substances Act. For certain employers, particularly those subject to the U.S. Department of Transportation, that fact continues to dictate outcomes. Safety-sensitive roles remain tightly regulated, and state law does not override those obligations. But for most employers, federal law does not answer the questions that actually arise in practice. State law increasingly does. The critical mistake is treating federal illegality as a blanket justification for broad policies or reflexive discipline. In many jurisdictions, that approach is no longer defensible. State law has shifted the analysis in a meaningful way. Across the country, legislatures have moved beyond legalization and into regulation of the employment relationship itself. In practical terms, that means employers are now operating within statutory frameworks that protect lawful, off-duty cannabis use and limit how employers can respond to it. The implications are significant. A positive test result, standing alone, is often no longer enough. Hiring decisions based on off-duty use are increasingly restricted. Policies that fail to distinguish between lawful conduct and workplace impairment are becoming harder to defend. This is not a marginal development. It is a structural change in how substance use issues are evaluated. The legal question is no longer “did the employee use cannabis.” Questioning whether an employee used cannabis is no longer valid. It is whether the employee was impaired at work and whether the employer can prove it. That distinction is where many policies break down. Traditional testing methods detect past use, not current impairment. As a result, employers who continue to rely exclusively on test results are often relying on evidence that does not answer the legally relevant question. State guidance is increasingly explicit on this point. Employers are expected to base decisions on observable, contemporaneous indicators of impairment that affect performance or safety. That requires more than suspicion and more than a laboratory result. It requires judgment, documentation, and consistency. Employers who have not trained managers to identify and articulate those indicators are, in effect, delegating critical legal decisions to individuals who are not equipped to make them. These issues rarely exist in isolation. Substance use questions often intersect with obligations under the Americans with Disabilities Act and parallel state laws. That is where the analysis becomes more nuanced. An employee’s conduct may be unprotected. The underlying condition may not be. Treating those as the same issue is a common and costly mistake. Medical cannabis adds another layer. While federal law does not require accommodation of marijuana use, state law may impose obligations that require a more individualized assessment. Employers who default to categorical rules risk overlooking when the law requires a closer look. This is an area where rigid policies tend to create, rather than reduce, exposure. Remote work has made outdated policies harder to defend. The shift to remote and hybrid work has exposed another weakness in legacy substance use policies. Rules that were drafted with a physical workplace in mind do not always translate well to a workforce that operates across locations and, in many cases, from home. The relevant inquiry is no longer where the employee is. It is whether the employee is fit for duty during working time. That sounds like a subtle distinction. It is not. Policies that focus on presence rather than performance are increasingly out of step with both how work is performed and how the law evaluates these issues. What a defensible approach actually looks like. Employers who are managing this well tend to have one thing in common. Their policies are not just updated. They are deliberate. They distinguish clearly between off-duty conduct and on-duty expectations. They define impairment in terms that can be observed and documented. They use testing in a way that aligns with legal limits rather than as a default response. And they train managers to make decisions that will withstand scrutiny after the fact, not just in the moment. Just as importantly, they recognize when a situation calls for legal analysis rather than a reflexive policy application. The takeaway. This is one of those areas where the law has moved faster than most workplace practices. Employers who continue to rely on familiar approaches are not necessarily being careless. But they are often operating with assumptions that no longer reflect the legal landscape. That is where risk accumulates. A well-drafted policy is part of the solution. It is not the entire solution. Alignment between policy, training, and decision-making is what ultimately determines whether an employer is protected or exposed. In a landscape that continues to evolve, getting that alignment right is not simply a compliance exercise. It is a strategic one.
April 24, 2026
Tenant Opportunity to Purchase Act
In this episode of The DC Rental Act in Three Minutes, Offit Kurman attorneys Brian Dorwin and Gwen Roy Harrison break down how the Rental Act reshapes the Tenant Opportunity to Purchase Act (TOPA) for DC multifamily properties. They explain how TOPA once applied almost universally—often delaying closings and forcing landlords and developers into costly negotiations with tenant associations. The Rental Act changes that by introducing key exemptions that streamline transactions and reduce uncertainty. New construction properties (with a certificate of occupancy issued within the last 15 years), LIHTC properties, certain ownership transfers, and small landlords with two to four units may now be exempt from TOPA. The episode also highlights new notice requirements for current and incoming tenants—and why compliance still matters, even with statutory safeguards in place. The takeaway: these reforms are expected to unlock stalled deals and bring greater efficiency to DC’s multifamily market.
April 24, 2026
Business
Strategic Equity Partners: Expertise vs. Governance Friction
In many platform acquisitions (particularly in search funds, entrepreneurship through acquisition (ETA) transactions, and independent sponsor deals), adding a “strategic equity partner” is framed as a clear positive. There are real benefits like additional capital, operating experience, lender credibility, and often a higher probability of closing. The issue is less about whether to add a partner and more about when and how that partner is introduced. When a strategic partner is brought in after the LOI is already signed, the timeline to negotiate the governance framework is compressed. The narrative and excitement at that stage remain focused on upside, while the governance implications of adding another decision-maker are pushed into later negotiations. The LOI-to-close window is compressed, and incentives shift toward getting the deal done. As a result, governance is frequently finalized under pressure rather than designed deliberately. The impact is rarely economic at the outset. It shows up in execution. As additional partner approvals and consent rights are layered in, decisions that were previously within the operator’s control now require alignment across multiple stakeholders. More stakeholders mean more approvals, and more approvals tend to slow the process. That friction is not always visible during the transaction itself. It becomes more apparent in the first 100 days post-close, when the business needs to move quickly, and the governance structure does not support the pace that was underwritten. This dynamic is more pronounced in roll-ups, including those executed through search funds, ETA platforms, and independent sponsor structures, where speed and repeatability drive returns. Even modest governance drag can change outcomes. A structure that is directionally sound but operationally constrained can often underperform a simpler structure that can execute consistently. There is a counterpoint: more deliberate governance can lead to better decisions. The tradeoff between decision quality and execution speed should be explicit rather than assumed. What “Strategic” Usually Signals Introducing a strategic partner at LOI often reflects a gap in the team rather than a pure enhancement. This is especially common in search fund and independent sponsor transactions, where the operator is building infrastructure in parallel with executing the acquisition. The framing is additive, but the underlying driver is frequently a need to solve for something that is not yet fully built into the platform. This dynamic also mirrors a broader structuring question: where strategic partners sit in the equity stack—at the holdco or portfolio level—can materially impact governance and decision flow, not just economics. In many cases, the platform relies on capabilities that are still developing. Integration experience is a common example. The roll-up model assumes that acquisitions can be absorbed efficiently, but that capability is often unproven at the platform stage. Industry-specific operating knowledge may also be limited, particularly where the operator is entering a new vertical or scaling beyond prior experience. Systems and reporting infrastructure tend to lag the ambition of the strategy, creating a mismatch between what is modeled and what can be executed. The natural response is to introduce a strategic partner to bridge that gap. Lender dynamics often reinforce the decision. In leveraged transactions, the team is underwritten alongside the asset. A strategic partner can strengthen that narrative by adding perceived institutional support and a track record that lenders recognize. In some cases, this improves terms or increases certainty of a close. The partner effectively becomes part of the credit story, not just the equity stack. Integration bandwidth is another driver. Roll-ups assume the ability to absorb add-ons quickly, often without a fully built-out operating platform. A partner is expected to support that integration planning and post-close execution, thereby reducing execution risk. There is also an element of risk sharing. Particularly in first platform deals or more aggressive investment theses, bringing in a partner spreads exposure and introduces another perspective if/when performance deviates from plan. None of this is inherently problematic. In many cases, it is a rational response to real constraints. The consistent consequence, however, is that the partner brings governance, and governance changes how the business operates. The key is to enter the deal with a clear understanding of how that governance will function in practice. The below demonstrates a typical board structure in traditional search fund models. You can explore the different models and board structure further here: https://tinyurl.com/2rh74bk2 Where Friction Shows Up As briefly mentioned above, the friction impact appears in decision-making. As additional consent rights are layered in, more parties must agree before action can be taken. The underwriting model may assume speed and autonomy that no longer exists once governance is expanded. Board composition is often where this dynamic becomes real, because it determines who actually has the ability to approve or block decisions. A balanced board on paper can function as a checkpoint in practice once quorum and voting thresholds are applied. If control is not clearly aligned with the operating model, the board shifts from oversight to gatekeeping. Decisions that would otherwise be routine begin to require formal coordination, special meetings, and sometimes even input from professional advisors representing various stakeholders. Protective provisions compound the effect. In practice, these are the provisions that designate certain actions as “reserved matters” requiring supermajority or unanimous consent at the board or investor level. Common examples include: incurring or refinancing debt, approving capital expenditures above a threshold, deviating from the approved budget or business plan, issuing additional equity, or entering into material contracts or acquisitions. Each of these approvals is reasonable on its own. When each step requires a supermajority or unanimous sign-off, the process shifts from operator-led execution to coordinated approvals across multiple stakeholders, which slows the cadence of decision-making. The issue is not the existence of these rights, but how frequently they are triggered in the normal course of operating the business. Budget approvals can create the same constraint. When budgets require approval and variance thresholds are tight, routine adjustments turn into approval processes, limiting management’s ability to respond in real time. Roll-ups rely on speed, and competitive processes — particularly in lower middle market ETA and independent sponsor deals — tend to reward buyers who can move quickly with certainty. If each add-on requires layered approvals, the platform becomes less competitive. Opportunities that fit the thesis may still be identified, but the ability to act on them is constrained by structure rather than strategy. This is why the friction becomes most visible in add-on acquisitions, where speed is often the deciding factor in winning the deal. Management decisions can also migrate from operator discretion to investor approval. Hiring, compensation, and incentive alignment become slower to execute. Over time, this affects the quality and responsiveness of the team, particularly in periods where rapid adjustment is required. Deadlock and Forced Outcomes As additional stakeholders are introduced, disagreements become more likely. In many structures, those disagreements ultimately point parties toward formal deadlock mechanisms. These can include buy-sell arrangements (often structured as “Russian roulette” or “Texas shootout”), put/call rights, forced sales or buyouts, or redemption rights. These mechanisms are designed to break impasses, but they can be outcome-determinative and, in some cases, harsh to one side. A forced buyout may require a sponsor or the company to purchase an equity stake at a defined price or formula, which can create meaningful cash flow strain at the exact moment the business needs capital to execute. Alternatively, a party may be compelled to sell at a time or valuation that does not align with the original thesis. The key point is not that these provisions should be avoided. It is that once disagreements arise, the path to resolution is often binary and financially significant. If those dynamics are not considered upfront, governance can shift from a tool for alignment to a mechanism that forces outcomes under pressure. Why It Matters More in Roll-Ups Single-asset acquisitions can tolerate some governance friction because the operating model is relatively stable. Decisions are fewer in number and less time-sensitive. In that context, additional oversight may be manageable. A roll-up operates differently. The model depends on pace, repetition, and the ability to act decisively across a sequence of opportunities. Each add-on introduces new variables, and the platform must be able to respond quickly to integrate, optimize, and move forward. When governance introduces multiple layers of approval and frequent investor involvement in operational decisions, the strategy becomes harder to execute in practice. Decisions can still be made, but not at the speed required to maintain momentum. At that point, governance directly affects outcomes and is difficult to unwind without renegotiating core terms. The graphic below shows a sample board composition after numerous acquisitions. Note the increasingly limited decision-making power of the operator. Decision Rights to Resolve Early If a strategic partner is introduced around LOI, whether it be in a search fund, ETA, or independent sponsor context, decision rights should be aligned with how the business will operate in practice. Board control at closing needs to be explicit and consistent with the intended operating model. Ambiguity at this stage tends to create friction later. It is also worth recognizing why these protections exist. Investors are seeking to protect capital and, in many cases, bring real experience that can improve outcomes. A well-constructed board can provide discipline, identify risks early, and prevent decisions that would otherwise impair value. The goal is not to remove oversight, but to calibrate it to support execution rather than impede it. Management authority should allow day-to-day decisions without repeated escalation. The distinction between strategic oversight and operational control needs to be clear in both concept and documentation. Add-on acquisition parameters should be defined in advance, so execution does not depend on real-time approvals. Debt capacity should align with the expected capital strategy rather than restrict it. Budget processes should allow for adjustment as conditions change, rather than lock the business into a static plan. Management should retain sufficient control to build and adapt the team required to execute. Deadlock provisions should be evaluated based on how quickly they can resolve disagreement, not simply how balanced they appear. These are execution variables that ultimately determine whether the strategy can be implemented as underwritten or whether governance constraints begin to reshape the outcome. Structuring to Preserve Speed These dynamics point to a few practical governance principles. First, align control with the operating model. If the thesis depends on speed, decision rights should enable timely action at the management level. Second, reserve approvals for truly fundamental matters, not routine operating decisions that occur frequently. Third, define thresholds that reflect how the business will actually run, including pre-approvals for expected activities like add-ons and incremental leverage. Fourth, make approval processes workable in real time, not just balanced on paper. This is where experienced counsel matters. In this context, “sophisticated governance” means more than drafting protections; it involves translating the investment thesis into a decision-rights framework that will function under time pressure. That includes calibrating reserved matters, setting practical thresholds, designing board composition and quorum rules, and stress-testing deadlock outcomes against realistic scenarios. The goal is to preserve investor protections while ensuring the company can execute without repeated escalation. Closing Thought Strategic partners can add value, particularly where they address real capability gaps or strengthen the financing narrative. In many cases, they improve the quality of the deal and increase the probability of closing. But they also introduce a second layer of governance that must align with how the business will operate after closing. If that alignment is not addressed before close, it tends to be addressed afterward, when decisions need to be made quickly and flexibility is limited. That is where execution risk increases and the original thesis begins to drift. Not because the strategy was flawed, but because the structure does not support it. If you are navigating this dynamic in a live deal, it is worth addressing decision rights early and in practical terms — before they become constraints in the first 100 days.
April 23, 2026
Real Estate
Why Delaware Legal Opinions Matter – Part 1: Delaware Law at the Core of Modern Lending Transactions
Welcome to Why Delaware Legal Opinions Matter, a five-part series examining the role of Delaware legal opinions in transactional practice. In this series, you will learn about the scope and purpose of these opinions, the circumstances in which they are required in real-world transactions, how lenders rely on them in real estate finance deals, and practical strategies for obtaining them efficiently without closing delays. In today’s transactional landscape, Delaware is not just a preferred jurisdiction; it is often embedded in the structure of deals that have little or no other connection to the state. A borrower formed in Delaware. A guarantor organized as a Delaware LLC. A holding company sitting at the top of the structure. When that happens, core legal questions in the transaction, existence, authority, and enforceability, are governed by Delaware law, regardless of where the deal is negotiated or the assets are located. That is where Delaware opinion counsel becomes essential. One of the most common misconceptions is that Delaware legal opinions are only relevant to Delaware-based transactions. They often arise when the property or transaction is geographically nowhere near the State of Delaware. For example: property located in Arizona, a loan negotiated by Nevada counsel, or a borrower formed as a Delaware LLC. Even though the transaction is otherwise local, the lender’s ability to rely on the borrower’s existence, authority, and execution is a Delaware law question. At its core, a Delaware legal opinion addresses a defined set of entity-level issues, including whether the: Entity validly exists and is in good standing Entity has the power to enter into the transaction Transaction has been properly authorized by the entity’s governing documents Operative loan documents are enforceable (subject to customary limitations) These are not abstract concepts—they directly address whether the transaction is legally binding on the entity. From a lender’s perspective, these opinions serve as a risk allocation tool. They provide comfort that the borrower is properly formed, authorized, and bound by the transaction documents. In institutional lending, particularly in real estate finance, this is a standard closing requirement. Accordingly, Delaware counsel typically reviews organizational documents, confirms authority and approvals, coordinates with deal counsel, and delivers the opinion on closing. Handled properly, Delaware counsel operates as a seamless extension of the deal team. Delaware entities are used heavily in structured real estate finance and multi-entity borrower structures, where separateness and authority are critical. If your transaction involves a Delaware entity, the key questions are when to engage Delaware counsel and how to do so efficiently. Delaware legal opinions are a core component of modern transactional practice. They are not simply a formality; they are a targeted legal analysis that ensures a transaction is legally effective under Delaware law.
April 22, 2026
Labor and Employment
Non-Discrimination Training: What In-House Counsel and HR Executives Need to Do Now
Non-discrimination training is no longer simply a best practice; it is increasingly a legal imperative. Across the country, states, and municipalities are imposing affirmative obligations on employers to implement, document, and periodically refresh training programs to prevent workplace discrimination and harassment. For companies operating in multiple jurisdictions, the array of requirements presents both compliance complexity and potential litigation risk. This advisory is directed to in-house legal counsel and human resources executives. Its purpose is straightforward: if your organization does not currently have a structured, recurring non-discrimination training program in place, you need one — and the time to act is now. The Legal Landscape: A Jurisdiction-by-Jurisdiction Overview The following summary reflects the current state of non-discrimination training requirements and formal recommendations across key jurisdictions. This is not an exhaustive survey, but it illustrates the breadth of regulatory attention employers face. California California imposes an affirmative duty on employers to take reasonable steps to prevent and promptly correct unlawful discrimination and harassment. While the statute does not establish a single universal periodic training mandate for all protected categories, it does require certain employers to provide regular sexual harassment training. Critically, California law also requires that any training program leading to employment be administered in a nondiscriminatory manner. Employers with California operations who are not already conducting regular, structured anti-discrimination training should treat this as a compliance gap requiring immediate correction. New York City The New York City Human Rights Commission recommends that employers implement antidiscrimination policies specifically addressing gender identity and expression and provide ongoing training for employees and agents. In the context of New York City’s historically aggressive enforcement posture—including substantial administrative penalties and individual liability exposure—these recommendations carry significant practical weight. In-house counsel should treat the commission’s guidance as a strong indicator of what regulators will scrutinize in the event of a complaint. Philadelphia The Philadelphia Fair Practices Ordinance guidance recommends that employers provide training to managers and employees before problems arise—particularly regarding gender identity and expression. This proactive framing is significant: Philadelphia regulators are signaling that reactive training (i.e., training only after a complaint is filed) is insufficient. Employers with Philadelphia operations should build training into their standard onboarding and periodic compliance calendars. San Francisco San Francisco imposes some of the most explicit affirmative obligations. The San Francisco Human Rights Commission requires all agencies, businesses, organizations, city contractors, and city departments to clearly communicate the city’s non-discrimination laws. It further recommends ongoing training for all management, employees, and volunteers on gender identity issues. Washington The Washington State Human Rights Commission recommends that employers educate all employees about non-discrimination policies, with particular attention to gender identity and expression. The commission further suggests that employers consider bringing in outside consultants to provide specialized training on gender identity sensitivity and awareness. For organizations with a significant Washington workforce, this consultant recommendation reflects regulatory awareness of the limits of generic training—and should prompt a review of whether your current training program is sufficiently tailored. District of Columbia The District of Columbia mandates compliance with non-discrimination laws and requires that employer programs contribute to the elimination of sex stereotyping and barriers to employment. While current guidance does not specify a universal periodic training interval for all employers, the District’s substantive mandate is clear, and employers operating there should not interpret the absence of a specific training schedule as an option to forgo training altogether. Why “Recommendations” Carry Real Legal Risk In-house and outside legal counsel sometimes draw a sharp distinction between legal requirements and regulatory recommendations, treating the latter as aspirational and optionally advisable. In the employment discrimination context, that distinction can be misleading and potentially costly. When a regulatory body with enforcement authority—such as the New York City Human Rights Commission, the Philadelphia Commission on Human Relations, or the San Francisco Human Rights Commission—issues guidance recommending employer training, that guidance typically reflects the standard against which the agency will measure employer conduct when adjudicating a complaint. An employer who ignored formal training guidance from an enforcement agency will face a significantly more difficult defense posture than one who followed it. Beyond agency enforcement, you should consider the evidentiary implications in civil litigation. Plaintiffs’ counsel regularly introduce evidence of an employer’s failure to conduct training, or to conduct it adequately, as evidence of a discriminatory or hostile work environment. Courts have consistently recognized training programs as a component of an employer’s affirmative defense in harassment cases. The absence of training, by contrast, can undermine an employer’s ability to invoke the Faragher-Ellerth defense or its state-law equivalents. A Practical Action Plan for Legal Counsel and HR The following steps represent a baseline compliance framework for organizations operating in one or more of the jurisdictions addressed above. Legal counsel and HR executives should assess their current programs against each item. Conduct a Jurisdictional Audit Map your workforce to the specific jurisdictions where employees work or are supervised. For each jurisdiction, identify applicable statutes, ordinances, and agency guidance. Pay particular attention to gender identity and expression requirements, which appear consistently across the surveyed jurisdictions. Establish a Training Calendar Several jurisdictions emphasize ongoing or periodic training—not one-time programs. Build a recurring training schedule into your compliance calendar, with defined intervals for managers and employees. Tie training events to onboarding, annual compliance cycles, and promotion into supervisory roles. Differentiate Manager and Employee Training Management-level training should address investigation obligations, reporting duties, and liability implications that differ from general employee instruction. Several jurisdictions specifically call out training for managers and agents, ensure your program reflects this distinction. Address Gender Identity and Expression Explicitly Every jurisdiction reviewed here specifically references gender identity and expression as a training focus. Ensure your curriculum addresses these protected categories with specificity, not merely as a line item in a broader protected-class list. Consider Specialized Consultants Washington State’s recommendation that employers engage outside consultants for gender identity training is worth noting for employers in any jurisdiction. Where internal training capacity is limited, or where a workforce has complex dynamics, outside expertise can improve both the quality and the credibility of your training program. Document Training records should be maintained systematically. Document attendance, training content, delivery dates, and any acknowledgment forms signed by participants. In the event of an administrative complaint or civil litigation, contemporaneous documentation of a robust training program is among the most valuable evidence an employer can produce. The Bottom Line Non-discrimination training requirements are not static, and the regulatory trend is clearly toward more specificity, more frequency, and more accountability—not less. Employers who treat training as a one-time orientation task, or who have allowed their programs to go stale, are accumulating legal exposure that is relatively inexpensive to address proactively and potentially very costly to address reactively. In-house counsel should elevate this issue with HR leadership and, where appropriate, the executive team. A well-designed, regularly delivered, and carefully documented training program is one of the most straightforward investments a company can make in its employment law compliance infrastructure—and one of the most defensible positions it can establish when regulatory or litigation exposure materializes. Employers should consult qualified employment counsel to evaluate compliance obligations applicable to their specific circumstances and jurisdictions.
April 21, 2026
Construction
The Saga of Economic Volatility Continues — Construction Contract Approaches for Potential Economic Issues Arising from the Iran Military Conflict
Six years ago, the COVID pandemic caused a shutdown of the economy. Since then, continued issues of economic volatility have occurred: supply chain woes; inflation and cost escalation; tariffs; and various other natural disasters. Now, with the Iran military conflict, specific materials and oil prices appear to be at risk. This article presents approaches for addressing these risks in construction contracts. As a starting point, military conflict is a typical type of force majeure event. But that alone does not necessarily dictate a remedy or relief for impacts. Generally, the best approach is for the construction contract to specifically address both the issue and the afforded relief. One initial issue in negotiating such contract clauses is the definition of the Iran military conflict itself. Does the military conflict constitute a war? Does the clause protect from war, terrorism, or a specifically identified military conflict? Does the current conflict constitute an unusual, unforeseen event? What if you sign a contract today—at this point, does it still remain an unforeseen event? Because of these complications, it is best to specifically address the issue with a custom contract clause. Instead of relying solely on vague or broad language, any negotiated clause should specifically identify the issue and all broad concerns—impacts of any terrorism, vandalism, armed conflict, military conflicts, or any widening military or government action, including but not limited to, events arising from the Iran/U.S. military conflict. And it should identify the potential problems (price escalation and delay of materials) and the respective relief (increase in price and extension of time through a change order). Even if a standard construction contract form includes a force majeure clause for “war,” it might not cover all incidents or events. And it might only afford relief of a time extension, but not necessarily additional compensation for price issues. Relying upon generic common law doctrines, such as commercial impracticability are risky because a court might rule that the issue was foreseeable, especially if the contract is signed while the pending conflict is developing. And a court might rule that the impacts from the event do not rise to the level of commercial impracticability. Also, when the issue of concern is economic volatility, the more that the event is known as a potential issue at the time of contracting, the more reason to specifically identify the issue and the mechanisms for relief. This is generally true for all the economic issues identified in this article—pandemics; supply chain issues; inflation and cost escalation; and tariffs. If an event is known to exist and might impact the project, best practice is to specifically address the event with a clause that affords either an extension of time, increase in price, or both. Other specific clauses to consider include: Price escalator clauses for either tariffs, price increases, or specified categories of materials (e.g., specific oil-based materials or fuel price increases) Contingencies or allowances for materials of concern or tariff costs Greater flexibility for substitutes or alternatives to allow for the sourcing of differing materials Extensions of time if materials are difficult to source Termination for convenience clauses if projects become impracticable due to any war-time orders or governmental orders that severely impede the project Segregated pricing by agreement for time-and-material budgets for carved-out scope packages that might be more volatile Prompt procurement, buy-out administration, and warehousing of goods in advance to avoid potential volatility on specified goods Value-engineering during the preconstruction phase to identify different (more easily accessible) materials Increased buffers in the contract price to account for the risk of potential tariff impositions When negotiating and drafting custom contract clauses to address risk on projects, or if litigating claims for equitable adjustments or change orders, best practice is to consult with trusted, experienced counsel that is knowledgeable on the intricacies of construction law. JEFFREY C. BRIGHT is a Principal attorney in Offit Kurman’s Construction Practice Group and maintains a multi-state construction law practice, representing contractors, subcontractors, owners, construction managers, design-builders, and design professionals. He is licensed and active in construction law matters in PA, MD, DC, VA, and CA. In addition to handling construction litigation and project disputes, including time impact claims for liquidated damages, delays, or disruptions, he regularly advises on the preparation, revision, and negotiation of construction contracts for various project delivery systems. He can be reached at jeff.bright@offitkurman.com.
April 21, 2026
Commercial Litigation
Developments in IEEPA Refund Process: CAPE Portal Now Live
This is an update to our previously published article, "Developments in IEEPA Refund Litigation" posted April 15, 2026. U.S. Customs and Border Protection (“CBP”) has taken a significant step forward in implementing a formal refund process for duties imposed under the International Emergency Economic Powers Act (“IEEPA”). With the launch of Phase 1 of the Consolidated Administration and Processing of Entries (“CAPE”) portal within ACE, importers now have an operational mechanism to begin submitting refund claims. While this development signals meaningful progress, eligibility is currently limited, and importers must continue to take proactive steps to preserve their rights. CBP Update: CAPE portal Now Open (Phase 1) At present, CAPE filings are limited to: Unliquidated entries Entries within 80 days of liquidation Entries outside of this scope will be rejected under current validation rules, and CBP has not yet provided guidance on when additional categories of entries will become eligible under future phases. The CAPE system allows for: Submission of multiple entry numbers in a single claim Automated validation of entry eligibility Batch processing of refund claims (currently up to 10,000 entries per form) Based on initial use, the system is generally intuitive and efficient when claims are properly vetted. While some minor system delays have been observed, likely due to high user volume, the submission process itself has proven to be relatively seamless. CIT Update: Continued Importance of Protest Rights As discussed in our prior update, the Court of International Trade (“CIT”) has emphasized the continued importance of administrative remedies. Specifically: CBP has been directed to address:Unliquidated entries; and Entries not yet final The CIT has highlighted that importers “should be aware” of protest rights under 19 U.S.C. § 1514 This remains a critical point. While CAPE provides a new refund pathway, it does not eliminate the need to file protests where applicable. Entries outside the CAPE eligibility window, particularly those more than 80 days post-liquidation, must still be addressed through traditional protest procedures. However, it was made clear that any entry that currently has a pending protest is NOT available to submit a declaration through CAPE, which seems to create hesitation with filing protective protests. Either way, importers and their representatives need to be assessing the risk and planning of action. Inaction could prove costly. Key Takeaways for Importers Categorize Entries Immediately Importers should identify and classify entries into: Unliquidated entries (currently CAPE eligible) Entries ≤ 80 days post-liquidation (currently CAPE eligible) Entries within 180-day protest window (protective protest eligible) Entries beyond 180 days (potential risk, but addressed by CIT order) CAPE Eligibility is Limited Phase 1 is restricted, and CBP has not yet announced timing for broader “Phase 2” eligibility. Importers should not delay action in anticipation of expanded access. Protests Remain a Safeguard The CIT has not resolved whether refunds will be available for entries that are final and beyond the protest period. Filing a protest remains a prudent “belt and suspenders” approach where timing permits. Prepare Claims Carefully Before Submission to Avoid Validation Errors CAPE validations are strict. Entries will be rejected if they: Fall outside eligibility windows Do not contain qualifying IEEPA HTS provisions Are not properly associated with the importer account Looking Ahead CBP’s CAPE portal represents a meaningful advancement in processing IEEPA refund claims, but the current framework remains incomplete. Importers should prioritize: Immediate identification of affected entries Submission of CAPE claims for eligible entries Preservation of protest rights where applicable At this time, there is no indication when additional CAPE filing phases will be implemented, and uncertainty remains for entries outside the current eligibility parameters.
April 21, 2026
Family Law
When “I Do” Turns Into “You Owe”
Marriage is a partnership — but under the Internal Revenue Code, it is also a financial alliance with serious consequences. Only spouses can file a joint tax return under I.R.C. § 6013(a). And when they do, they are jointly and severally liable for the full tax bill. Not half; not a proportional share; but the whole thing. If taxes aren’t paid, the IRS can track down or sue either spouse for 100% of the debt. For many couples, filing jointly offers lower taxes. But when a return has errors, omissions, or unpaid balances, a joint filing can suddenly become a source of unintentional, and profoundly unfair, exposure. Innocent Spouse Relief enables a “requesting spouse” to obtain relief from tax obligations that rightfully belong to the other spouse. I.R.C. has three pathways for relief. § 6015: (i) Traditional Relief; (ii) Separation-of-Liability Relief; and (iii) Equitable Relief. With each of these paths, however, there is a threshold rule: there must be a joint return. Traditional Relief Traditional relief is appropriate when a joint return includes an understated tax liability resulting from errors made by the other spouse’s unreported income received or improper deductions or credits claimed. In the real world, scenarios can be shockingly audacious: the deduction of business expenses never paid; nondeductible state fines disguised as business write-offs; and personal pet costs described as “home office security.” To be eligible, the requesting spouse must demonstrate that they didn’t know and had no reason to know about the understatement when they signed the return and that it would be inequitable to hold them responsible for 50% of the liability. Traditional relief is an issue for the spouse who legally signed the return in good faith and did not know the numbers were erroneous. The alleged innocent spouse running around using the other spouse’s corporate credit card to pay for household groceries, children’s clothing, and private school tuition can claim to be “innocent.” The request for Traditional relief typically must be made within two years of the IRS beginning collection activity. Separation-of-Liability Relief Separation-of-Liability Relief can be used by spouses whose marriage is ending or has ended. For this relief, a spouse wishing to claim is required to be divorced, legally separated, or widowed; have lived apart from the other spouse for at least 12 months before filing the request. The timing for relief under Separation-of-Liability Relief matters, too. The election must be made within two years of the start of collection activity by the IRS. The IRS can use Separation-of-Liability Relief to appropriately and equitably allocate the deficiency between the spouses based on who was responsible for its occurrence. Equitable Relief Sometimes, a spouse doesn’t qualify neatly under the technical rules of Traditional or Separation-of-Liability Relief. Equitable relief is available for hard, more human situations where the rules lack the flexibility to capture unfairness. To be eligible, the requesting spouse needs to have filed a joint return, be ineligible under the other two provisions, file a timely claim (generally within the 10-year collection period), not been involved in fraud, and not engaged in fraudulent asset transfers. Equitable relief exists even if a piece of liability is technically attributable to the requesting spouse, especially in situations involving abuse, financial control, or coercion. The IRS assesses all facts and circumstances, no single factor prevails. Marital status Economic hardship Knowledge or reason to know the tax would not be paid Legal obligations in a divorce decree Whether the requesting spouse significantly benefited Subsequent tax compliance Mental or physical health In cases of abuse, especially when a spouse controlled finances or instilled fear of retaliation, the scales can tilt heavily in favor of relief. Conclusion A joint tax return is not a piece of paper. It’s a legal imperative with actual repercussions. It's a wise financial move to consider. For some, it becomes an unpredictable liability tied to acts they didn't take in the first place and sometimes didn't even know were possible. Innocent Spouse Relief is there to correct that. It understands that fairness is important. And under good circumstances, it offers a powerful remedy for those who signed in trust but were stuck with the bill. Marriage can be shared, but injustice does not have to be.
April 21, 2026
Landlord Representation
Avoiding FLSA Pitfalls When Offering Onsite Housing and Rent Discounts
Onsite housing and rent discounts are common benefits in the property management industry, but federal wage-and-hour litigation makes clear that these arrangements can create significant Fair Labor Standards Act (FLSA) exposure if they are not carefully structured. The central question courts ask is not how the benefit is labeled, but whether onsite living primarily benefits the employer and whether it results in unpaid or underpaid work. When housing benefits blur into compensation or operational control, employers face heightened risk of overtime liability, off‑the‑clock claims, and retaliation allegations. Keep Housing Truly Voluntary Housing benefits pose the least FLSA risk when employees are free to live onsite by choice rather than necessity. Requiring onsite residence as a condition of hire or continued employment strongly suggests that the arrangement exists for the employer’s benefit. Employers should ensure that employment offers, policy documents, and actual practices make clear that living onsite is optional and that declining housing has no effect on wages, scheduling, or job security. Separate Housing Benefits from Compensation Rent discounts must remain clearly distinct from wages. When discounts vary by job title, seniority, or responsibility, courts are more likely to view the housing as compensation rather than a fringe benefit. Uniform discounts—or discounts that are demonstrably unrelated to performance or availability—are easier to defend. Employers should avoid structuring housing benefits in ways that resemble pay incentives or substitutes for overtime compensation. Avoid Creating Implicit On‑Call Obligations Employees who live onsite are often perceived—by management or by tenants—as naturally available after hours. Even absent a formal on-call policy, this expectation can give rise to compensable work time. Employers should clearly define work hours, limit after-hours requests, and avoid relying on employees’ proximity as a substitute for staffing. Where on-call work is required, it must be clearly documented and compensated in accordance with the FLSA. Use Arms-Length Leasing Practices Treating employee residents the same as non-employee tenants reinforces the non-compensatory nature of housing benefits. Requiring standard rental applications, background checks, and lease agreements supports an arms-length relationship and reduces the argument that housing is a condition or incident of employment. Special treatment, guaranteed units, or waived leasing requirements undermine that distinction. Pay for All Time Worked—Including After Hours After-hours responses to maintenance calls, tenant complaints, or emergencies frequently constitute compensable work time. Employers should implement reliable timekeeping procedures that allow employees to record this work and should train supervisors to avoid discouraging accurate reporting. Failure to capture and pay for after-hours work remains one of the most frequent sources of FLSA liability in the property management context. Evaluate Whether Rent Discounts Affect the Regular Rate When onsite living primarily benefits the employer—by ensuring immediate coverage, enhanced security, or continuous availability—the value of a rent discount may be required to be included in the regular rate of pay for overtime calculations. Employers should evaluate housing arrangements holistically and seek legal guidance before excluding rent discounts from overtime calculations, particularly where onsite residence is expected or strongly encouraged. Bottom Line Onsite housing can be a lawful and effective benefit, but only when it functions as a voluntary perk rather than an operational necessity. When housing is mandatory, compensation-linked, or tied to unpaid availability, FLSA risks increase substantially. Careful program design, clear policies, and consistent compensation practices are essential to minimizing wage-and-hour exposure.
April 20, 2026
Understanding Pleading Technicalities Under the DC Rental Act
In Episode 3 of The DC Rental Act in Three Minutes, Offit Kurman attorneys Robert Donahue and Brian Dorwin break down one of the most consequential—and least understood—changes in the new law: how courts handle pleading technicalities. They explain that, under the prior legal framework, any defect in a filing—no matter how small—required the court to dismiss the case. A missing attachment, an outdated form, or a minor clerical error could derail a case at any stage, including on the morning of a jury trial after months of preparation. This rigid “shall dismiss” standard created costly delays and forced landlords to restart cases from scratch for issues that often had no impact on the merits. The Rental Act fundamentally reshapes this process. Judges now have discretion to determine whether a defect actually causes prejudice to either party. Instead of automatic dismissal, courts may allow amendments or permit the case to proceed when the issue is minor—such as a decade‑old RAD form with a technical flaw. For landlords, this means fewer restarts, fewer duplicative filings, and more efficient resolution of disputes. Robert and Brian emphasize that this shift—from shall dismiss to may dismiss—is one of the most practical improvements in the statute. It empowers judges to apply common sense, reduces unnecessary litigation costs, and allows attorneys to advocate more effectively when technical issues arise.
April 17, 2026
Labor and Employment
Responsible AI in HR Starts with Transparency and Trust
Artificial intelligence (AI) is increasingly positioned as a tool to help businesses better understand workforce trends, predict retention risk, and improve performance. Yet from the employee perspective, these same tools can feel intrusive. AI systems often pull sensitive data directly from HRIS platforms including, personal information, performance metrics, engagement signals, communications, and behavioral indicators. Without clear communication, employees may be left wondering what data is being collected, how it is being interpreted, and whether it could be used against them. In this context, transparency is essential: employees should understand not only what data is gathered, but why it is necessary and how it benefits both the business and the workforce. Employers, meanwhile, face their own set of risks. Many AI-driven workforce tools rely on third-party vendors, raising important questions about data ownership, retention, and security. Is employee data being stored indefinitely? Is it being used to train models beyond the scope of the employer’s relationship with the vendor? These concerns make careful contract review critical, particularly around data usage rights, confidentiality, and security safeguards. A practical guiding principle is data minimization: if data is not essential to achieving a clear business purpose, it should not be collected. Excessive data collection can increase legal and regulatory exposure without delivering proportional value. Ultimately, the issue of AI-driven employee monitoring extends beyond compliance to governance, risk management, and organizational trust. When employees believe they are being surveilled without sufficient guardrails and transparency, morale can erode and retention risks can grow. Businesses that use AI responsibly limit data collection and communicate openly with employees are better positioned to maintain employee confidence and foster a culture where technology supports, rather than undermines the workforce.
April 16, 2026
Labor and Employment
Jury Awards Employee $22.5 Million For Employer’s Improper Denial of Pregnancy Accommodation Request
When dealing with injured, sick, or pregnant employees, employers must exercise extreme diligence when denying an accommodation request; it is not as clear-cut as it might appear. The courts (and juries) tend to favor employees. Employers are simply playing with Fire with a capital “F” if an accommodation is denied without first consulting with experienced labor counsel. Take the Ohio state court case discussed below. On March 18, 2026, an Ohio jury awarded an employee $22.5 million dollars for her wrongful death claim against her employer for the loss of her child arising from the denial of her request for a pregnancy-related work accommodation. The jury found that the employer’s initial denial, of only two days, from her work-from-home request, was a substantial factor resulting in her baby’s death. The employee, a fairly new claims associate for a logistics company, was prescribed bed rest by her doctor after she suffered a serious complication related to her pregnancy; this was not in dispute. When she requested a temporary work-from-home accommodation, as was allowed to others, and provided supporting medical documentation, the company denied the request. Instead, it placed her on unpaid leave of absence. Because she and her family depended upon her paycheck and continued medical benefits, she was unwilling to forgo any paychecks and the employee quickly returned to in-office work. At the end of her second day, after the work-from home-denial, the employer reconsidered and said she could work from home. However, unfortunately, that night, after the second day of in-office work, she suffered severe medical complications resulting in her child being born too early; six hours after being born, her baby girl died. The employer’s counsel, we believe, of course, with hindsight, chose a disingenuous defense strategy that obviously offended and inflamed the jury, resulting in the huge verdict. Employer’s counsel conflated the employee having her mother drive her to work so she could ask her supervisor if she could work from home (which the supervisor said she could) and to pick up her computer so she could work at home, by saying she came to work and worked that day of her own volition. Then, when the human resources department overruled the supervisor and denied the employee’s request to work-from-home, it placed her on unpaid leave. When the employee, needing her pay and medical benefits, felt she had to come into work, the employer’s counsel faulted the employee for coming into the office rather than staying on unpaid leave. It became clear that the employer made an error and wrongfully considered the employee’s request as one for unpaid leave of absence. The baby’s estate filed a wrongful death lawsuit in February of 2023: Larkin v. Total Quality Logistics, LLC, (Hamilton County, Ohio). There is no reported decision, and the above alleged facts have been assembled from copies of the complaint and motions filed in the case; it will likely be appealed. We highlight this extreme case because it shows the real danger and consequences of the improper handling of an employee’s good-faith request for a reasonable work accommodation. If the employee suffers physical harm as a result of the denial, or even the unreasonable delay in approval, the employer may be on the hook not only for lost wages, but also the damages that flow from the denial/delay, including wrongful death, medical bills and costs, and pain and suffering. As this employee was relatively new and did not appear to even qualify for FMLA leave, which is unpaid leave, the employer was offering a leave of absence instead of allowing the employee to work from home. However, she had other causes of action under federal and state law. Under the Americans with Disability Act (ADA), 42 U.S.C. §12101 et seq., the Family Medical Leave Act (FMLA), 29 U.S.C. § 2601, et seq. and the Pregnant Workers Fairness Act (PWFA), 42 U.S.C. 2000gg et seq., covered employers are required to assess, through an interactive process with a covered employee, whether a suggested accommodation may allow an employee to fulfill their required job duties in a manner least burdensome on the business. To legally justify denying a reasonable accommodation request, an employer must demonstrate the accommodation would impose an undue hardship, meaning a substantial cost or difficulty, as determined by factors such as the nature and cost of the accommodation, the employer’s financial resources, and the impact on business operations. An employer does not have to create a new position for the employee, but where the disabled/pregnant employee could perform the essential functions of the job by working from home, an employer (especially a large employer, as this was) will have a difficult time justifying a denial. This case serves as a reminder that the stakes of these employment decisions are very high, and mistakes can lead to drastic consequences for both employee and employer. Employers should review employee job descriptions for accuracy and train supervisors on the accommodation process and what is required under the ADA, FMLA, and PWFA. As always, documentation is key. Experienced labor and employment counsel can help successfully navigate this process and should be contacted as soon as there is any discussion about the denial of an accommodation. A short phone call or two (or emails) with labor counsel before a denial could greatly increase the chances of avoiding liability, six figures of attorney’s fees, and serve to avoid harming an employee and his/her family.
April 16, 2026
Mergers and Acquisitions
M&A Nuggets: Take It Personally - It's Goodwill
A common quandary facing sellers taxed as C corporations is the double tax that will result from a sale structured as an asset purchase — one level of tax to the corporation on the sale of its assets and a second level of tax to the stockholders on distribution of the net proceeds from the sale. This double tax can equal close to 50% of the total purchase price. The best way to avoid the double tax is to convince the purchaser to engage in a stock sale. That, however, is not always possible. In that case, serious consideration should be given to whether a portion of the purchase price can be allocated to the personal goodwill of the seller’s owners, as opposed to company goodwill. Any part of the purchase price allocated to personal goodwill will be subject to one level of tax. An additional benefit to the seller is that amounts allocated to personal goodwill are subject to capital gains tax rates. From the purchaser’s viewpoint, it can deduct amounts attributed to personal goodwill over 15 years, which is the same result as with amounts allocated to company goodwill. Personal goodwill is the goodwill of the individual owner of the seller that results from the person’s unique expertise, reputation or relationship with vendors and/or customers. Personal goodwill does not exist in every business. Before agreeing to an allocation to personal goodwill, an analysis should be made to determine the likelihood that the allocation will withstand any challenge by the Internal Revenue Service. The most quoted personal goodwill legal case involved a distributor of ice cream products who sold part of his business to Häagen-Dazs. In that case, the court recognized that the most valuable asset of the business was the owner’s business relationships with the business’s customers; the success of the business depended entirely on the owner. Another important factor was that the owner did not have a non-compete agreement. The court held that the owner, not the company, sold his assets to Häagen-Dazs. If the factors identified by the court in the Häagen-Dazs case apply and personal goodwill exists, a seller can obtain a significant tax benefit. That would be a very nice dessert on top of the main event of the business sale.
April 16, 2026
Immigration Law
Understanding the EB 5 Program’s Critical Deadlines: What Investors Need to Know
The EB‑5 Immigrant Investor Program continues to be one of the most reliable pathways for families seeking permanent residency in the United States through investment. But with the passage of the EB‑5 Reform and Integrity Act (RIA), timing has become more important than ever. Two key dates—September 30, 2026, and September 30, 2027—now shape the strategic landscape for investors. Understanding the difference between these deadlines can help you protect your immigration process, secure your place in line, and avoid unnecessary risk. History of the EB‑5 Immigrant Investor Program The EB‑5 Immigrant Investor Program was created by Congress in 1990 to stimulate the U.S. economy through foreign investment and job creation, offering eligible investors and their families a path to permanent residency in exchange for investing in a new commercial enterprise that creates at least 10 full‑time U.S. jobs. In 1992, Congress introduced the Regional Center Program, allowing investors to participate in pooled, federally designated projects and count indirect job creation, which dramatically expanded the program’s reach and popularity. Over the decades, EB‑5 has undergone significant reforms, most notably the 2022 EB‑5 Reform and Integrity Act, which modernized oversight, increased investment thresholds, and introduced strong integrity measures. September 30, 2026, Grandfathering Deadline Under the RIA, any EB‑5 Regional Center petition filed on or before September 30, 2026, receives powerful “grandfathering” protection. This means: USCIS must continue processing your petition even if the EB‑5 Regional Center Program expires in the future Your case remains valid under the rules in place at the time of filing You are shielded from political uncertainty, program lapses, or regulatory changes that could otherwise disrupt your immigration process For many families, this date represents the safest window to file. Submitting an I‑526E petition before the 2026 deadline locks in today’s requirements and ensures your case cannot be altered by future program interruptions. September 30, 2027, Program Authorization Deadline The EB‑5 Regional Center Program is currently authorized through September 30, 2027. Investors may still file after the 2026 grandfathering deadline and before the 2027 program expiration. However, filings made between October 1, 2026, and September 30, 2027, do not receive the same guaranteed protection. If Congress fails to reauthorize the program after 2027: Petitions filed after September 30, 2026, may be paused or left unprocessed Investors could face delays, uncertainty, or the need to refile under new rules Investment thresholds or program requirements could change In short, you can file until 2027, but only filings made by 2026 are guaranteed protection. Why Investors Should Act Before 2026 Filing before the September 30, 2026, grandfathering deadline offers several advantages: Guaranteed case processing, regardless of future political developments Earlier priority dates, which matter for investors from backlogged countries Protection from future rule changes, including potential increases in investment amounts Reduced risk of delays caused by last‑minute filing surges Given the long‑term nature of the EB‑5 process, securing stability early is often the most prudent choice. Investment total increases and potential fee increase in 2027 January 1, 2027, is another critical date for potential EB-5 investors, as at that point, the USCIS can increase the investment totals under RIA. In addition, new fees and changes to the program are also possible. What This Means for You If you are considering the EB‑5 program, the next 18–24 months represent a uniquely important window. Filing before the 2026 deadline provides the strongest legal protections available under current law. Filing after that date remains possible but carries more uncertainty. Whether you are just beginning your EB‑5 journey or evaluating project options, now is the time to understand your timeline and prepare your strategy.
April 16, 2026
Commercial Litigation
Developments in IEEPA Refund Litigation
Through multiple court filings, the U.S. Customs and Border Protection (CBP) and the U.S. Court of International Trade (CIT) have identified significant updates affecting importers seeking refunds of additional ad valorem duties imposed under the International Emergency Economic Powers Act (IEEPA). These developments signal meaningful progress toward a structured refund process, while also highlighting critical compliance steps importers must take now to preserve potential recovery. CBP Update: CAPE Refund Functionality Progress CBP continues to develop a new refund-processing capability within the Automated Commercial Environment (ACE) collections framework, officially named the Consolidated Administration and Processing of Entries (CAPE). This system is designed to automate and streamline the administration of IEEPA-related duty refunds. As of March 19, 2026, CBP reported the following progress: Claim portal: 73% complete Mass processing: 45% completeOngoing development includes ACE validations and event history tracking Review and liquidation/reliquidation: 80% complete Refund processing: 63% complete Once implemented, CAPE is expected to significantly improve efficiency, with CBP estimating a reduction of over 4 million labor hours compared to manual processing. The system is intended to facilitate more timely and accurate refunds for importers. CIT Update: Continued Stay and Guidance on Entry Status On March 20, 2026, the CIT issued an order continuing its prior stay (initially imposed March 4, 2026) and provided further clarification regarding treatment of entries. CBP is directed to reliquidate: Unliquidated entries; and Entries liquidated but not yet final (i.e., within 90 days of liquidation) For entries approaching or within the 180-day protest window:The CIT emphasized that importers "should be aware" of available protest remedies (under 19 U.S.C. § 1514(a)) Scope Expansion:The court amended its prior orders to encompass all IEEPA duties imposed, including those on imports from Brazil and India Notably, the CIT did not resolve whether refunds will be available for entries that are already liquidated and beyond the 180-day protest deadline, where a protest was not filed. It is important to note that the implication before this order indicated that liquidation dates were no longer relevant, however the court’s specific reference to 19 U.S.C. § 1514(a) seems to signal that failure to file a protest COULD result in forfeiting your claim. Therefore, get documents early, and file the protest if you are within the 180-day window to avoid uncertainty. Ultimately, it is a “belt and suspenders” remedy that is worth the extra time. Key Takeaways for Importers Categorize Entries Immediately The availability of refunds may depend on the liquidation status of entries. Importers should promptly identify and classify entries into the following categories: Unliquidated entries Entries liquidated within the 180-day protest period Entries liquidated beyond 180 days:With a filed protest Without a properly filed protest Current law generally provides: CBP may reliquidate within 90 days of liquidation Importers may file protests within 180 days After 180 days, liquidation is typically considered “final and conclusive” Accordingly, entries beyond the protest period may face significant barriers to recovery. Prepare for CAPE by Confirming Electronic Refund Capabilities on the ACE Portal CBP’s Interim Final Rule on Electronic Refunds (effective February 6, 2026) requires that all refunds be issued electronically. Despite approximately 330,000+ importers having paid IEEPA duties or deposits, only about 21,400 entities had completed electronic refund setup as of early March. CBP has already been unable to process 7,700 refunds for nearly 2,900 importers due to incomplete or improper setup. Important to Note Refund claims will be rejected if the importer has not enabled electronic refund capability in ACE. Importers should immediately confirm: ACE portal access Banking and payment configurations Coordination with customs brokers, where applicable Access the Electronic Refund Enrollment in CBP's ACE Portal here. Looking Ahead CBP’s CAPE system represents a major step toward modernizing the refund process for IEEPA duties, but key legal and procedural uncertainties remain, particularly regarding entries that may already be final under U.S. customs law. In the near term, importers should prioritize entry review and classification, preservation of protest rights where applicable, and completion of ACE electronic refund setup.
April 15, 2026
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