Family Law
Understanding Financial Coercion in Family Law Cases
Representing a financially dependent spouse in a family law case often involves more than simply litigating support or property division. In many cases, the dependent spouse may also be experiencing financial coercion, which is a form of control in which one party uses money, access to resources, or economic pressure to dominate or manipulate the other spouse during the marriage or throughout the litigation process. Common Forms of Financial Control in Marriage Financial coercion can take many forms. One spouse may control all bank accounts, restrict access to funds, monitor spending, cancel credit cards, refuse to provide financial information, provide limited spending budgets, or threaten to stop paying household expenses unless certain demands are met. In some situations, the dependent spouse may have little knowledge of the family’s finances because the other spouse historically managed all income, investments, taxes, and accounts. Legal Challenges Faced by Financially Dependent Spouses These dynamics can place the dependent spouse at a severe disadvantage during divorce litigation. A spouse without access to money may struggle to retain counsel, secure housing, pay experts, or even meet daily living expenses while the case is pending. Fear of financial instability can also pressure a dependent spouse into accepting unfair settlement terms. How Courts Address Economic Imbalance During Divorce Family law courts increasingly recognize that economic control can affect the fairness of the litigation process itself. Requests for pendente lite support, attorney’s fees, temporary use and possession of the marital home, and orders requiring financial disclosures may become critical tools in leveling the playing field. Early intervention is often essential to stabilize the dependent spouse financially before meaningful negotiations can occur. Importance of Financial Documentation and Evidence Documentation is particularly important in these cases. Bank records, account access history, spending restrictions, hidden assets, sudden transfers of funds, and communications involving financial threats may all become relevant evidence. Attorneys may also need to work closely with forensic accountants or financial experts when there are concerns about concealed income, business manipulation, or dissipation of assets. Emotional and Psychological Impact of Financial Coercion Beyond the legal and financial issues, financial coercion frequently has a significant emotional and psychological impact. Many dependent spouses experience anxiety, fear, embarrassment, or a lack of confidence in making financial decisions independently. Effective representation often requires patience, education, and helping the client regain a sense of stability and autonomy throughout the litigation process. Advocating for Fairness and Financial Independence Ultimately, representing a financially dependent spouse involves more than seeking support payments or dividing assets. It often requires addressing an imbalance of power that has existed throughout the relationship and ensuring that the dependent spouse has a fair opportunity to participate in the legal process and rebuild financial independence moving forward.
June 8, 2026
Landlord Representation
HUD’s New Fair Housing Governance Strategies: Accountability, Detection, and Interagency Strategic Targeting
HUD’s unending flurry of announcements, proposed rulemaking, and press releases is neither subtle nor accidental. Over the past 18 months or so, HUD’s announcements have coalesced around three themes likely to shape the next several years of federal housing policy. First, accountability will be operationalized. HUD’s willingness to impose monitorship and assume control of PHAs indicates that compliance failures will increasingly be met with intervention, rather than incremental guidance. Second, civil rights compliance and enforcement remain in flux. As HUD advances regulatory changes and courts inevitably weigh in (over the years to come), housing providers must prepare for a period of doctrinal instability. Third, enforcement will be both targeted and strategic. By selecting high-profile investigations, HUD can influence industry behavior beyond the immediate parties, effectively regulating through example. Taken together, these reflect a deliberate recalibration of federal housing governance, one that blends fair housing enforcement with a renewed emphasis on operational accountability, explicit civil-rights policy, and interagency coordination. The result is a framework that is less about suggested guidance and more about institutional posture: HUD is signaling how it intends to govern, enforce, and intervene for the foreseeable future. From Oversight to Intervention: HUD Reignites Direct Federal Control HUD’s recent actions against local public housing authorities demonstrate a shift from general oversight to direct intervention. The February 2026 placement of the Manhattan Housing Authority into federal monitorship introduced a familiar but newly emphasized tool: the imposition of HUD-appointed “Cure Monitors,” enhanced oversight of procurement and financial controls, and the threat of escalation to full federal possession. That threat materialized mere months later. In May 2026, HUD declared the Little Rock Housing Authority in “substantial default,” dissolved its governing board, and assumed full possession of its programs and assets after finding material violations of a prior recovery agreement. On their face, these actions are rooted in statutory authority (which has long been available to HUD). However, their recent deployment and the speed with which monitorship escalated into possession suggests a revived willingness to unlock this authority. The administrative message is clear: recovery agreements are no longer aspirational. They are enforceable benchmarks, and failure to meet them may trigger immediate consequences. If HUD is prepared to step into the role of operator, the risk of noncompliance becomes substantial. Redefining Civil Rights: From Enforcement Pause to Framework Reset Parallel to this enforcement posture, HUD has undertaken a second, more ideological project: redefining key civil rights concepts within its regulatory framework. In 2025, HUD halted enforcement of aspects of the 2016 Equal Access Rule, signaling a departure from prior interpretations of nondiscrimination obligations in HUD-funded programs. By 2026, that pause had evolved into a proposed rulemaking effort to revise terminology across HUD regulations — removing “gender identity” from interpretations of “sex” and refocusing program requirements on “biological truth.” HUD is not simply deprioritizing enforcement; it is attempting to rewrite the regulatory vocabulary through which compliance is measured. That shift carries consequences not only for shelters and supportive housing providers (where the immediate impact is often most pronounced) but also for any multifamily operator navigating layered federal, state, and local nondiscrimination obligations. The result, at least in the near term, is regulatory fragmentation. Federal program requirements may diverge from state or local law, forcing housing providers into a position of having to simultaneously comply with potentially conflicting regimes. The challenge becomes less about choosing sides and more about engineering policies that can withstand the counterpressure of competing bodies (federal vs. state). The Selective Spotlight: Fair Housing Enforcement Through High-Profile Investigations If HUD’s regulatory proposals define its internal posture, its public-facing enforcement priorities are equally illustrative. The agency’s 2026 decision to open a Fair Housing Act investigation into a planned development in Texas — based on allegations of religious and national origin discrimination — reflects a renewed willingness to bring high-visibility cases that test the boundaries of community identity and exclusivity. The Fair Housing Act has long prohibited discrimination based on those two protected traits. What is notable here is not the legal theory but the emphasis: HUD is scrutinizing how developments are conceived, marketed, and structured, not merely how individual applicants are treated. Allegations involving targeted messaging, financial structures tied to religious institutions, and tiered access mechanisms illustrate HUD’s expansive view of what may constitute discriminatory conduct. This investigation may serve a dual function. It is both an enforcement action and a signaling device, communicating to the market that branding strategies and community frameworks will be evaluated through a fair housing lens, even at the conceptual stage. Interagency Alignment These developments do not exist in isolation. HUD’s participation in broader federal initiatives — including task force activity and coordination with the Department of Justice and Department of Homeland Security — reflects an increasingly strategic enforcement model. This model prioritizes data sharing, coordinated investigations, and multi-agency responses to alleged systemic issues, whether framed as mismanagement, discrimination, or public safety concerns. The practical effect is: issues that once unfolded within a single agency may now trigger parallel scrutiny across multiple federal actors. A Forward-Looking Assessment The way HUD deploys its authority — combining intervention, redefinition, and selective enforcement — signals a more assertive and unpredictable regulatory environment. For multifamily stakeholders, the lesson is less about any single announcement and more about the pattern they form. HUD is not merely administering housing programs; it is actively shaping the conditions under which those programs (and, perhaps, the broader housing market) operate. The prudent response is not reactionary compliance, but anticipatory governance: aligning policies, partnerships, and practices with federal (and state) requirements.
June 3, 2026
Estates and Trusts
Mind the Gap: Naming an “In-Between” Guardian for Your Minor Children
Even the best estate plans can leave an unintended gap. For parents of minor children, that gap may arise between a parent’s death or incapacity and the court’s formal appointment of a guardian. During that in-between period, it may be unclear who is authorized to care for the children, make medical decisions, or handle day-to-day responsibilities. While many parents focus on creating a will, naming beneficiaries, and appointing fiduciaries, they should also consider a temporary guardianship designation. In Maryland, this separate document enables parents to name a trusted person who can step in immediately to care for their children until a permanent guardian is appointed. For any parent, the thought of leaving children behind is understandably difficult. But estate planning is ultimately about making sure your children are cared for if the unexpected happens. A temporary guardianship designation is one of the most practical ways to provide guidance and reassurance during a crisis. The Gap a Will May Not Cover In Maryland, a will can nominate a guardian for minor children, but a will alone may not address the immediate realities after a parent’s death. Before a court formally recognizes the guardian nomination, there may be a period of uncertainty about who is authorized to care for the children and make important decisions on their behalf. A temporary guardianship designation helps fill that gap by providing clear directions as to who should step in immediately. This can minimize confusion among family members, reduce the likelihood of disputes, and help avoid emergency court intervention. It can also help avoid the need for an emergency custody proceeding if a friend or family member must step in unexpectedly without written authority to care for the children. By documenting the parents’ wishes in advance, the temporary designation can provide written authority and practical guidance during an already stressful situation. What Happens Without a Plan Ignoring this issue can create significant practical and emotional challenges. Imagine both parents are unexpectedly killed in an accident. Without temporary guardianship documentation, relatives may disagree about who should care for the children. In some cases, children may even be placed temporarily with social services until the court appoints a guardian. Even a brief period of uncertainty can be deeply unsettling for children already coping with grief and upheaval. By contrast, when parents have signed temporary guardianship documents, the transition is often far smoother. The designated individual—often someone nearby—can step in right away to provide housing, routine, emotional support, and day-to-day care until longer-term arrangements are finalized. Children are more likely to remain in familiar surroundings, continue attending the same school, and maintain important relationships during an extraordinarily difficult time. Choosing the Right Person Selecting a temporary guardian requires careful thought. Parents should choose someone they trust deeply and who shares similar values regarding parenting, education, and discipline. Practical considerations matter as well. The individual should be willing and able to take on the responsibility emotionally, physically, and logistically. Location may also be a factor. While naming someone nearby may reduce disruption, many parents choose out-of-state relatives based on strong relationships or shared values. The best choice is the person best able to provide a stable, supportive environment. Parents should also discuss the role with the proposed guardian in advance. Open communication helps prevent surprises and gives that person an opportunity to ask questions and understand expectations. It is also wise to name one or more alternates in case the primary choice is unavailable. Parents should review these designations periodically as family circumstances and relationships evolve. The temporary and permanent guardians may be the same person, or they may be different individuals. When the same person serves in both roles, the temporary guardianship enables him or her to step in immediately and helps prevent children from remaining in legal limbo until the court formalizes the longer-term appointment. Part of a Bigger Plan A temporary guardianship designation works best as part of a comprehensive estate plan that may also include wills with trust provisions, powers of attorney, and advance medical directives. While a temporary guardian handles a child’s immediate care, a trustee may manage financial resources for the child’s benefit. Coordinating these roles helps ensure that children are both emotionally supported and financially protected. Parents should also understand that Maryland courts ultimately retain authority over guardianship decisions. A temporary designation does not eliminate court involvement, but it does provide strong evidence of the parents’ wishes during a difficult transition. A Simple Step That Makes a Real Difference Too often, parents postpone estate planning because they feel too young, too healthy, or too busy. But emergencies can happen without warning. Naming an “in-between” guardian is one way parents can help ensure that someone they trust is ready to step in when it matters most.
June 3, 2026
Commercial Litigation
The NFL and the Limits of Arbitration Agreements: What Employers Need to Know
Brian Flores, an NFL coach, recently made headlines after the U.S. Supreme Court declined to intervene in a dispute over whether his claims must be arbitrated. Flores asserted race discrimination claims against the NFL and several teams arising from his employment. With the Court denying certiorari on the enforceability of the NFL’s arbitration agreement, those claims will proceed in federal court in the Southern District of New York. This development is notable given the increasing prevalence of arbitration agreements in employment relationships. Many employers require employees to sign arbitration agreements at the outset of employment, often limiting their ability to litigate claims, such as discrimination or wage-and-hour disputes, in court. Because courts frequently grant motions to compel arbitration under these agreements, more disputes are diverted away from judicial forums. However, the NFL’s experience in this case illustrates that not all arbitration agreements will withstand judicial scrutiny. The Federal Arbitration Act (“FAA”) embodies a strong federal policy favoring arbitration, meaning that the vast majority of arbitration agreements will stay a federal suit while the parties proceed in an arbitral forum. Still, that policy is not without limits. Arbitration agreements must preserve a party’s ability to pursue statutory remedies and must, in substance, provide for arbitration, not merely label a process as such. In Flores v. New York Football Giants, Inc., the Second Circuit concluded that the NFL’s arbitration provision did fall under the purview of the FAA. The court emphasized two critical deficiencies. First, the agreement failed to provide for an independent forum for resolving disputes. Instead, it vested authority in the NFL Commissioner to oversee the process. This arrangement fell short of the neutrality expected in arbitration. As the court explained, an arbitration agreement must contemplate an “independent forum that is separate from the parties to the dispute.” A process that requires one party to submit disputes to the “substantive and procedural authority of the principal executive officer” of the opposing party is “an agreement for arbitration in name only.” Second, the agreement lacked sufficient procedural framework. Under the FAA, an arbitration agreement must establish how disputes will be resolved. Although the NFL’s provision granted the Commissioner authority to define procedures, the court found this open-ended delegation inadequate. Thus, the agreement “bore virtually no resemblance to arbitration agreements as envisioned and protected by the FAA.” For employers, the decision provides important guidance. While arbitration remains a valuable tool, its enforceability depends on careful drafting. Key Takeaways for Employers Ensure True Independence of the Arbitral Forum The forum must be neutral and separate from the parties. Employers should avoid retaining unilateral control over the decision-maker or process. Define Clear Procedures Arbitration agreements should outline, at least in general terms, how disputes will proceed — such as rules governing selection of the arbitrator, discovery, and hearings. This can often be done by selecting JAMS, AAA, or another arbitration service. Avoid Unconscionability Procedural fairness matters. Discovery limitations, for example, must not prevent employees from effectively vindicating their statutory rights. As the Fourth Circuit noted in Stinger v. Fort Lincoln Cemetery, LLC, while limited discovery is inherent in arbitration, it cannot be so restrictive as to undermine those rights. Account for State Law Requirements In addition to federal law, state-level unconscionability standards can affect enforceability. Employers should ensure their agreements comply with applicable state law. Ultimately, while the FAA does much of the heavy lifting in enforcing arbitration agreements, the Flores case serves as a reminder that an agreement must actually provide for arbitration in both form and substance. Employers who take the time to draft fair, balanced, and clearly defined arbitration provisions will be best positioned to ensure their agreements are enforceable.
June 3, 2026
Mergers and Acquisitions
When the Deal Gets Personal: The Emotional Inflection Points of Selling a Business
Selling a business is largely viewed as a financial transaction shaped by valuation, structure, diligence, and closing. However, for founders and owners, selling a business is also an emotional journey that can be a highly stressful event. That stress can be compounded when a corporate attorney is brought in late in the process when many sellers have already experienced the early and most precarious stages of the deal. Many sellers work with an investment banker to take the company to market, vet buyers, and there may even be a letter of intent (LOI) on the table before an attorney is brought on board. While the seller feels they are making progress, from a legal and strategic standpoint, this early stage is where complexity and stress begin to escalate and legal counsel is critical. We have discussed the importance of bringing in legal counsel early in the process in multiple posts, and that cannot be emphasized enough. Below, we examine the most stressful components for sellers in any deal and how bringing in legal counsel early can help to ease the burden. Letter of Intent The LOI is one of the earliest inflection points in the deal process. Sellers often underestimate its significance because they see it as non-binding on economic terms. But this is a false sense of flexibility because exclusivity and time restrictions are binding. Once that LOI is signed, the seller is essentially off the market for a determined period and cannot engage in discussions with other interested buyers. This is where leverage begins to shift from the seller to the buyer. The buyer now has two things that are very valuable: time and access. On the other side, the seller is now increasingly invested, both financially and emotionally, in making the deal happen. It is now harder for the seller to walk away from the deal, even if circumstances change. Diligence The leverage shift becomes more pronounced when the deal enters the diligence stage. Buyers are highly disciplined as they approach this phase of the transaction, particularly when they are sophisticated financial sponsors. Diligence is not about buyers just confirming what they have been told, but rather testing assumptions, looking for weaknesses, and then recalibrating valuation based on their findings. It is common for buyers to reassess price or deal structure because of what is uncovered during diligence, and for sellers who entered the process with a clear expectation of value, that can be jarring. The business they have spent years or even decades building is now being evaluated through a different lens. Consistent Performance Another layer that multiplies the pressure on the seller is the expectation that the business continues to perform at the same level throughout the entire process. Entering negotiations to sell does not equate to a pause in operations. It is simply a process that runs parallel to day-to-day operations. Sellers must manage diligence requests, respond to buyer questions, and engage with all their advisors, all while effectively running the company. They cannot afford for performance to dip, even for reasons that have nothing to do with the transaction. That can lead to a reason for renegotiation, with buyers adjusting terms, implementing additional protections, or even revisiting the valuation entirely. This creates constant tension for the seller who is trying to execute the deal and simultaneously maintain the underlying business. Delayed Engagement of Legal Counsel When a seller brings in legal counsel later in the transaction, it can feel disruptive at first. This is because the job of an attorney is to identify and address risks, clarify what has already been agreed to, and ensure that the documents accurately reflect the intended deal. If they are not involved from the jump, they may have to revisit assumptions or unwind understandings that developed earlier in the process. This can feel like friction or a change in direction for sellers, and that can be avoided when counsel is engaged from the start. The issues become even greater when the buyer is a private equity (PE) firm. These repeat players operate with well-established playbooks and experienced deal teams. This is in stark contrast to a first-time seller who sees this as a once in a lifetime event. For a PE firm, this is just a routine transaction. The imbalance this creates can heighten the emotional stakes, particularly when discussing complex deal components. The Personal Dimension The personal dimension of the deal overlays everything. For a seller, their business represents years of work, relationships, and their identity. Their company is not just an asset they are selling; it is often their life’s work. Layer in concerns about their employees, customers, and their legacy, and the personal connection to the business complicates everything. Sellers often carry the weight of the transaction on their own, while they must continue to lead their company, One other very important reality for sellers is that the deal is not done until it is closed. It is easy to get excited and assume that signing an LOI or moving through the diligence process means the outcome is assured. But the truth is that transactions can, and do, change late in the process. Terms evolve, issues emerge, and sometimes, deals fall apart. It is critical to maintain perspective and discipline and attempt to put emotions to the side. The bottom line for sellers is that every transaction must be approached with preparation and support from the start to minimize the significant stress that comes with every stage. Bringing in skilled legal counsel very early in the process can alleviate that stress and help sellers to not only maximize value, but also bring clarity to the many complexities of a sale, resulting in a deal that truly reflects the seller’s goals.
June 1, 2026
Labor and Employment
"The Pitt" is a Hospital Drama. It’s Also a Masterclass in Employment Risk
Like most good TV hospital dramas, "The Pitt" is not really about medicine. It is about pressure. The show captures what happens when employees are overextended, managers are operating in constant crisis mode, and organizational systems begin to strain under the weight of staffing shortages, emotional exhaustion, and impossible expectations. The setting may be a hospital emergency department, but the legal issues are recognizable to virtually every employer. What makes the series especially interesting from a labor and employment perspective is how many of its workplace tensions intersect with real legal obligations. Take burnout. For years, employers treated burnout as a retention problem or a culture issue. Increasingly, however, burnout-related concerns arrive wrapped in legal protections. An employee struggling with anxiety, depression, PTSD, or other mental health conditions may trigger obligations under the ADA. Extended stress-related absences may implicate the FMLA. Complaints about chronic understaffing or unsafe workloads may become protected activity under workplace safety laws or the National Labor Relations Act. The law has not suddenly become more forgiving of operational strain simply because employers are understaffed. If anything, courts and agencies have become more skeptical of workplaces that normalize exhaustion as part of the job. "The Pitt" also illustrates a common but underappreciated source of liability: supervisors under pressure. Employment claims are often shaped less by formal policy and more by how frontline managers respond in moments of stress. A dismissive reaction to a complaint, inconsistent discipline, public criticism, or poorly handled accommodation requests can quickly become evidence in discrimination, retaliation, or hostile work environment litigation. Healthcare settings make this especially visible because the hierarchy is so compressed and the stakes are so immediate. But the broader lesson applies everywhere. Technical excellence is not the same as management training, and many organizations continue to promote high performers into supervisory roles without adequately preparing them for the legal dimensions of people management. The show also reflects the growing legal significance of employee complaints about workplace conditions. Discussions about staffing levels, scheduling, workload, safety, and compensation are often protected under Section 7 of the NLRA, even in non-union workplaces. Employers sometimes frame these issues as morale problems or negativity concerns when, legally, they may constitute protected concerted activity. That distinction matters. Particularly in high-pressure industries, retaliation claims increasingly emerge from situations where employees raised operational concerns, and management responded defensively. Another recurring theme in "The Pitt" is documentation — or, more accurately, the lack of it. In chaotic workplaces, documentation often becomes inconsistent until a complaint arises. By then, employers may attempt to reconstruct performance concerns after the fact, which rarely presents well in litigation. Courts, agencies, and juries tend to view sudden paper trails with suspicion, especially when they appear only after protected activity, leave requests, or accommodation discussions. Perhaps the most modern employment-law lesson embedded in the show is the importance of psychological safety. Employees who fear humiliation, retaliation, or professional consequences for speaking up are less likely to report concerns early, whether those concerns involve discrimination, harassment, or workplace safety. Regulators increasingly expect organizations to create reporting structures that employees actually trust enough to use. Ultimately, "The Pitt" works because it understands something many workplaces still resist acknowledging: prolonged crisis conditions reshape employment risk. Fatigue affects judgment. Stress alters communication. Staffing shortages expose compliance gaps. And cultures built around endurance rather than sustainability tend to create legal vulnerabilities long before litigation begins. The show may be fiction, but the workplace issues are painfully familiar. Just with better lighting and more trauma bays.
May 29, 2026
Business
Post-Close Alignment in Lower Middle Market M&A: Where Deal Stress Begins to Fracture
Most sellers and buyers in lower-middle-market M&A, including search funds, entrepreneurship through acquisition (ETA), and independent-sponsor transactions, begin to suffer from deal fatigue and welcome the post-closing phase of a business acquisition or M&A transaction. No more due diligence, no more negotiations, no more redlines. However, in many cases, the post-close phase is fertile ground for additional disputes to emerge. Most post-closing friction in lower-middle-market M&A deals is not caused by something that was absent from the deal. To the contrary, it is actually related to the negotiated documents governing the relationship between seller and buyer in the post-close transition phase. Consulting agreements, employment agreements, and corporate governance documents in rollover equity transactions seek to govern the relationship, but the relationship is still new in this phase. The parties are experiencing, for the first time, what it is like to work together after the change in dynamics (seller-owner to exited owner; buyer with funding to operator managing debt service and performance expectations). In this example, the seller rolled equity in the transaction and was now an equity holder in the buyer's platform company. The post-closing issues did not stem from a missing provision, but from ambiguities that existed across multiple documents that were meant to align and work together: seller notes, management agreements, and governance documents were all in play and created more confusion than clarity. That pattern is more common than most buyers expect, particularly in search fund, entrepreneurship through acquisition (ETA), and independent sponsor deals where post-close roles and governance tend to be more fluid. The LOI to Close Gap in M&A Transactions Most of these issues are not created at closing. They are created in the window between LOI and signing. At LOI, the parties align on high-level economics and general expectations: The seller will stay involved The business will transition smoothly Equity will keep everyone aligned in the case of rolled equity, or amounts due pursuant to the seller note will incentivize cooperation But those concepts get translated into separate documents depending on the deal: Employment agreement Consulting agreement Operating agreement Purchase agreement Each document answers a different question. Very few processes force those answers to be reconciled into a single operating model. That is where the gap forms. By the time you reach closing, the documents are “complete” but not always aligned. Where Post-Closing Issues Show Up in Business Acquisitions Employment Terms in Post-Closing Transition Buyers often assume that key individuals, particularly a selling owner transitioning into an operating role, will continue “as expected.” The employment agreement is where that expectation either becomes a reality or breaks down. The most common issues include: Role definition is too broad or not tied to actual authority Termination provisions do not reflect how performance issues will be handled Compensation structures do not match the deal model Example: A seller stays on post-close in a senior operating role (e.g., general manager) under a two-year agreement while the buyer installs its own CEO or operating partner. The buyer expects to reshape reporting lines and decision-making authority over time. The agreement, however, includes strong severance protections and defines material changes to duties or authority as “good reason.” Six months in, the buyer begins shifting responsibilities to its operating partner. The seller asserts “good reason” and triggers severance or other protections, despite the buyer viewing the changes as part of the planned transition. Nothing is technically wrong in the document. It just does not reflect how the buyer intended to transition control of the business. Consulting Roles and Transition Services Agreements Consulting arrangements are often treated as secondary or low-risk. In practice, they can drive real execution outcomes. This is especially true in customer transition and institutional knowledge transfer. Where this tends to go wrong: Scope of services is loosely defined Time commitment is not specified Compensation is not tied to outputs Example: A seller agrees to a 12-month consulting arrangement to support transition. The agreement references “reasonable availability” but does not define hours, deliverables, or response expectations. Post-close, the buyer expects active involvement in customer introductions and onboarding. The seller views the role as limited advisory support that can be provided from a remote location and not on-site. The result is predictable. The buyer feels unsupported. The seller believes they are complying with the agreement. Again, nothing is broken in isolation. The expectations were never aligned. Rolled Equity and Post-Close Governance Rolled equity is typically framed as a tool to align the parties in furtherance of a more profitable enterprise. In practice, it can be alignment in concept only, not in execution. Where this tends to go wrong: Different expectations around liquidity timing Limited clarity on governance rights Misunderstanding of distribution mechanics Example: A seller rolls 20% of proceeds into the new structure. The buyer plans to reinvest cash flow into growth and limit near-term distributions. The seller expects periodic cash flow similar to how they operated pre-sale. The operating agreement permits discretion on distributions, but the practical application of that discretion was never aligned. This is not a legal defect. It is an operating mismatch that surfaces quickly once capital allocation decisions begin. Why Post-Closing Misalignment Occurs in M&A Deals During the deal process, these items are negotiated in parallel: Purchase agreement Employment agreements Consulting agreements Equity and governance documents Each document may be internally consistent, but the following question should be asked: Do these documents, taken together, reflect how this business will actually be operated on day one? More specifically: Do they clearly define what the seller is required to do, what authority they retain or lose, how they are compensated for that role, and what happens if those expectations change or break down? If the answer to those questions is unclear, the issue is already embedded in the deal. Practical Considerations Pre-Close in Lower Middle Market Transactions This is almost always easier to address before closing than after. In practice, a strong lower-middle-market post-close package tends to do six things: Define the role with objective deliverables. Move beyond titles. Specify outputs, metrics, and decision rights that tie to how the business will actually be operated. Clearly classify the relationship. State whether the seller is an employee, consultant, or board-level advisor. Blurred status tends to create both operational and legal ambiguity. Precisely frame “cause” and “good reason.” If the buyer retains flexibility to change duties, reporting lines, compensation, or authority, that flexibility should be clearly bounded. Well-defined “cause” and “good reason” concepts are what translate flexibility into enforceable expectations. Separate consulting economics from deal economics. Consulting fees should stand on their own unless the parties intentionally link them to purchase price or earnout mechanics. Unintended overlap often creates disputes about what is being paid for performance versus transition support. Build explicit consequences for disruption. If authority is stripped or termination occurs outside the expected framework, the documents should address the outcome. That can include tolling, acceleration, deemed achievement, or extension concepts tied to equity or earnouts. Preserve a practical enforcement path. Rights are only useful if they can be exercised. Escrow access, information rights, expert determination procedures, and specific performance provisions tend to make these arrangements function in practice. Closing Thought on Post-Closing Risk and Deal Execution These are not technical refinements. They determine whether the post-close relationship functions when conditions change. Most post-closing issues do not come from a single broken provision. They come from small inconsistencies across multiple documents that were never forced to align into a single operating framework. If you are under LOI or in diligence, this is typically the window to fix that alignment without disrupting the deal. After closing, you are no longer interpreting intent; you are operating within the structure you drafted. If you are working through this in a live deal, step back and ask: Do these documents, collectively, dictate how decisions get made, how the seller participates, and how economics actually flow? If not, then the risk is not theoretical. It is already built into the deal.
May 29, 2026
Commercial Litigation
Prejudgment Asset Freezes: Where the Line Is Drawn
In these turbulent times, more and more creditors are pushing for prejudgment asset freezes and restraints. Recent decisions in New York and Florida illustrate when that is possible. A district court in New York was reversed when it granted a preliminary injunction against the assets of guarantors who did not give the creditors any security interest. Interestingly, a bankruptcy court in Florida gave a plan trustee an injunction in a fraudulent conveyance action. The U.S. Supreme Court’s decision in Grupo Mexicano is the common theme. Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999). Grupo Mexicano is considered a departure from practice in the U.K. courts, which issue the so-called Mareva injunctions prohibiting defendants from transferring assets before judgment. See Mareva Compania Naviera S. A. v. International Bulkcarriers S. A., 1 All E.R. 213 (1980). Grupo Mexicano stands for the proposition that an unsecured creditor has no rights, at law or in equity, in the property of his debtor before judgment. New York (Leadenhall v. Advantage Capital – 2d Cir.) The Second Circuit Court of Appeals confirmed that where a creditor has no rights in a debtor’s assets, neither law nor equity shall operate to grant such rights prejudgment, and reversed, as an abuse of discretion, the District Court’s grant of a preliminary injunction against the assets of guarantors. The lenders extended a secured loan to borrower entities and obtained comprehensive collateral from the borrowers, but only unsecured guarantees from affiliated guarantors who pledged no assets. After discovering alleged fraud and default and accelerating roughly $600 million in debt, the lenders sued for breach of contract, fraud, and RICO, and sought to freeze both borrower and guarantor assets prejudgment, based on fears of dissipation. The district court granted the injunction, but the Second Circuit reversed because, as to the guarantors, the lenders asserted only legal claims for money damages, identified no specific property, and held no lien or equitable interest in guarantor assets. Those facts placed the case squarely within Grupo Mexicano. An unsecured creditor with a legal damages claim cannot restrain a defendant’s general assets before judgment, even where dissipation is likely. The absence of any pledged collateral, traceable res, or equitable remedy (such as restitution of specific property) was dispositive. Florida (Vital Pharmaceuticals – Bankr. S.D. Fla.) In a recent decision, Judge Russin held that Grupo Mexicano was inapplicable in a case arising from the bankruptcy of Vital Pharmaceuticals, which was forced into bankruptcy after losing a false advertising lawsuit brought by its competitor, Monster Energy. The debtor’s CEO, while the company faced massive and mounting litigation exposure, caused the company to transfer nearly $10 million of corporate funds to purchase and maintain a specific luxury property titled in a shell entity he controlled, with no consideration flowing back to the company. The transfers occurred as the company was allegedly insolvent or rendered insolvent, and while facing hundreds of millions of dollars in contingent liabilities. After confirmation of a liquidating plan, the trustee brought fraudulent transfer claims seeking to recover that specific real property (or its value), and moved to enjoin further encumbrance or transfer. Critically, the trustee traced estate funds directly into an identifiable res (the property) and pursued equitable relief, avoidance, and recovery of the property itself, not merely money damages. The court granted the preliminary injunction, holding that Grupo Mexicano did not apply because the action fit within the traditional equitable exception. It was an equitable fraudulent-conveyance claim targeting specific property, where the injunction served to preserve the res pending adjudication. The strong factual showing of insider transfers, lack of value, insolvency, and pending litigation exposure further supported both the likelihood of success and the need to prevent dissipation. The recent decisions underscore that Grupo Mexicano remains a firm constraint on prejudgment asset freezes in the United States: unsecured creditors pursuing legal claims for money damages cannot restrain a defendant’s general assets absent a recognized equitable interest. At the same time, courts will grant such relief where the plaintiff can anchor its claim in equity by tracing funds to a specific, identifiable res and seeking recovery of that property. Ultimately, the outcome determinative factors are not urgency or risk of dissipation, but whether the creditors can tie their claim to an identifiable asset or equitable remedy.
May 28, 2026
Title IX and Education
Campus Title IX Hearings: This Isn’t a “Court of Law" but Your Words May Still Have Legal Consequences
Title IX hearings are administrative, educational proceedings designed to address student reports of sexual harassment on campus. They are not intended to simulate a “court of law” and are not held to the same evidentiary or legal standards one can expect from a traditional legal proceeding. Although campus Title IX proceedings are not legal proceedings, students should still be wary of what they say during the process and beyond. While their statements during the campus Title IX process are likely privileged, absolute immunity may not apply to insulate students from defamation liability. Additionally, what students say outside the campus Title IX process is not privileged at all and may carry significant legal consequences. As Title IX matters increasingly intersect with defamation, understanding this overlap is critical. Consider a common scenario: a student is accused of sexual misconduct following an encounter where both parties had been drinking. The accused student believed the interaction was consensual but soon found themselves the subject of rumors spreading across campus, including being labeled a “rapist.” What begins as a private dispute quickly escalates into widespread reputational harm. The accused student experiences social isolation, is asked to step down from organizations, and sees their academic performance decline. Seeking relief, the accused student turns to the university, but institutional responses are often limited. Defamation Basics and Why Title IX Makes Things Complicated The majority of Title IX matters are “he said, she said” situations and often involve competing narratives of what took place during the parties’ encounter. When one party publicly shares their perspective with others, it can sometimes lead to premature conclusions about the other party that have long-lasting and stigmatizing effects. This is where Title IX intersects with the concept of defamation. To establish a defamation claim, a plaintiff must generally show that a false statement of fact was made about them, published to a third party, and caused reputational harm, all without the protection of a legal defense or privilege. However, not every harmful or offensive statement is subject to defamation liability. Opinions and statements made in good faith during the campus Title IX process may fall outside the scope of defamation. In the Title IX context, the line becomes blurred, particularly when statements about another student spread beyond the formal process. Privilege, Immunity, and the Limits of Protection Even when statements are later proven false, they may be protected by privilege if they were made during the Title IX proceeding. In some jurisdictions, a Title IX proceeding qualifies as a “quasi-judicial” proceeding. Certain communications made in quasi-judicial or administrative settings may be shielded from defamation claims, but these protections are not absolute. In fact, very few jurisdictions provide absolute immunity to statements made during the Title IX process. Sometimes, statements are only cloaked by a qualified privilege, which means the speaker must still prove that the statements at issue were made in good faith before the privilege applies. Courts have increasingly been asked to evaluate how these principles apply in university disciplinary proceedings, underscoring the legal complexity surrounding campus speech. How Courts Are Treating Title IX Statements After the Fact As courts begin to weigh in, it has become clear that what is said during a Title IX proceeding, and how those statements are later treated, can have consequences that extend far beyond campus. In Khan v. Yale University and Le v. University of Medicine and Dentistry, the court focused on what happened inside the Title IX process itself. In Khan, the Connecticut Supreme Court concluded that Yale’s Title IX disciplinary process did not function enough like a courtroom to give participants absolute immunity from defamation claims. While the court acknowledged the importance of encouraging students to report sexual misconduct, it held that knowingly false or malicious statements made during the process could still lead to liability. Together, these cases show that statements made during campus disciplinary proceedings may not always be fully protected and can later become the subject of litigation. Statements Outside Title IX Proceedings and Resulting Liability What happens outside of a Title IX proceeding can be just as significant. In Pampu v. Wingo, the defamatory statements at issue were made by two Clemson students outside of the Title IX process. As a result, the statements were not protected by absolute immunity or qualified privilege at all. After a week-long trial examining testimony from five eyewitnesses, the plaintiff and three co-defendants, a twelve-member jury unanimously found the Clemson students liable for defamation and civil conspiracy and awarded Pampu $5.3 million dollars in compensatory and punitive damages1. While the matter is on appeal for reasons unrelated to immunity or privilege, the lesson from Pampu is clear: what a student says about another student can cause lifelong damage and may lead to significant legal liability if a jury determines those statements are untrue. Universities are operating in an increasingly challenging environment. Recent campus controversies involving protests, disciplinary actions, and speech restrictions have heightened the scrutiny of institutional decision-making. Schools must balance competing obligations under Title IX, free speech principles, and due process requirements, often under intense public and legal pressure. In doing so, universities are tasked with protecting the rights, safety, and educational access of all parties, while also managing the reputational and interpersonal fallout that can accompany allegations of misconduct. Ultimately, while a Title IX proceeding may not be a legal proceeding, they are far from consequence-free. What you say about someone during a Title IX proceeding should not be taken lightly and should only be made in good faith. Allegations, responses, witness accounts, and investigative findings can have lasting academic, professional, emotional, and reputational effects, sometimes extending well beyond campus. The safest approach is to treat every statement as if it could matter later, because it very well might. 1See Kimberly Lau Representative Matters, second bullet point
May 27, 2026
Real Estate
Why Delaware Legal Opinions Matter – Part 2: What Delaware Opinions Actually Cover
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. For many transactional attorneys and business professionals, the phrase “Delaware opinion” sounds broader and more comprehensive than it actually is. In reality, the Delaware opinion serves a focused and highly specialized role: providing opinions on discrete issues of Delaware law relating to Delaware entities involved in the transaction. Most Delaware opinions address core legal issues such as: The valid existence and good standing of a Delaware entity The entity’s power and authority to enter into the transaction Due authorization, execution, and delivery of the transaction documents Enforceability of the applicable transaction documents against the Delaware entity[1] In certain transactions, perfection or UCC-related matters governed by Delaware law Importantly, the Delaware opinion generally does not address the entire transaction. The opinion does not typically cover the laws of the state where the real estate is located, the economic substance of the transaction, regulatory compliance outside Delaware, or the business terms negotiated by the parties. Instead, the Delaware opinion provides lenders, investors, and transaction parties with comfort that the Delaware entity itself has been properly formed, authorized, and bound under Delaware law. This distinction matters because modern transactions frequently involve multiple jurisdictions and multiple layers of counsel. For example, a real estate financing transaction involving a property in Texas will require a Delaware opinion because the borrower or guarantor is organized as a Delaware LLC. Similarly, an acquisition governed primarily by New York law will require a Delaware opinion because a holding company or acquisition vehicle was formed in Delaware. In these transactions, Delaware opinion counsel operates as part of a coordinated closing team alongside lead transaction counsel, local real estate counsel, borrower’s counsel, and lender’s counsel. The role is specialized but often critical to closing the deal efficiently. Experienced Delaware opinion counsel also helps avoid one of the most common causes of closing delays: opinion requests that are overbroad, inconsistent with customary practice, or disconnected from the actual structure of the transaction. Because Delaware opinion work is highly practice-driven, understanding customary limitations, assumptions, qualifications, and opinion scope is just as important as understanding the Delaware statutes themselves. When handled efficiently, Delaware opinions become a streamlined component of the closing process rather than a last-minute obstacle. [1] An opinion regarding the enforceability of transaction documents against a Delaware entity is limited to the enforceability of such documents against that Delaware entity under Delaware law and should not be interpreted as a general enforceability opinion regarding the transaction documents as a whole or under the laws of any other jurisdiction.
May 20, 2026
Labor and Employment
Beyond Attendance: The Legal Duties of Nonprofit Board Members
Serving as an officer or director of a nonprofit organization is both an honor and a serious legal responsibility. Whether your organization is a large regional association or a small community-based nonprofit, the individuals who sit on the board are held to defined legal standards — standards that exist to protect the organization, its members, and the public it serves. This article outlines the core governance obligations that apply to every nonprofit board member, including the three fiduciary duties imposed by state law, the board’s proper role in organizational management, and several practical obligations that are easy to overlook but carry real legal consequences. Modern Governance Demands Active, Informed Leadership Nonprofits today operate in an environment of heightened public scrutiny, legal complexity, and accountability. The days when a board member could fulfill his or her obligations simply by showing up for quarterly meetings and voting on motions are long past. Effective governance now requires directors to be proactive, to engage with the organization between formal meetings, to participate meaningfully in leadership transitions, and to approach every board communication and decision with deliberation. Passive participation is not just ineffective; it can be a legal liability. A director who sits back, defers entirely to others, and casts uninformed votes risks violating the very duties assumed upon joining the board. The Board Governs — It Does Not Manage One of the most important distinctions in nonprofit governance is the line between policy and management. The board of directors is the organization’s governing body, with ultimate responsibility for its mission and direction. But that responsibility does not extend to the day-to-day administration of the organization. Operational decisions —staffing, program delivery, vendor relationships, and the like — are properly delegated to paid staff, designated committees, or empowered officers. This principle holds even for smaller nonprofits that lack a professional staff. The board’s role is to set policy and ensure that results align with the organization’s mission and governing documents. When boards stray into micromanagement, they create confusion, undermine staff authority, and expose themselves to unnecessary risk. The best boards define clear boundaries, delegate appropriately, and hold leadership accountable for outcomes. The Three Fiduciary Duties State law imposes three legally enforceable fiduciary duties on every officer and director of a nonprofit organization: the duty of care, the duty of loyalty, and the duty of obedience. These duties are not optional — they cannot be waived by agreement, and they apply regardless of whether the organization is large or small, well-funded or volunteer-run. Every decision made in the course of board service should be evaluated against all three. Duty of Care: Be Informed and Engaged The duty of care requires directors to exercise the same ordinary and reasonable diligence that a prudent person would apply in similar circumstances. In practice, this means directors must arrive at meetings prepared, ask questions when something is unclear, seek out information independently when necessary, and engage substantively in board deliberations. A director who attends meetings without reviewing materials in advance, who relies entirely on the representations of other board members without independent inquiry, or who votes yes or no simply to go along with the room is not meeting this standard. The duty of care is an individual obligation; each director is personally responsible for being informed. Duty of Loyalty: Put the Organization First The duty of loyalty requires that when a director acts in his or her capacity as a board member, that director’s allegiance must be undivided and directed entirely to the organization’s interests. Personal interests, outside business relationships, and affiliations with other organizations must not influence board decisions. This duty encompasses two related obligations. First, directors must avoid actual conflicts of interest — situations in which personal gain could be derived from an organizational decision. Second, and equally important, directors must avoid even the appearance of conflicts of interest. The credibility of a nonprofit depends in large part on public trust, and that trust is damaged when there is any reasonable basis for questioning whether a board member’s decisions were made for the right reasons. Organizations should have a written conflict-of-interest policy, and directors should be prepared to disclose and recuse themselves where appropriate. Duty of Obedience: Know and Follow Your Governing Documents The duty of obedience requires directors to act in accordance with the organization’s articles of incorporation, bylaws, mission statement, and any other governing documents, as well as applicable federal, state, and local law. This is not a passive obligation. Directors are expected to have read and understood the organization’s governing documents, and to act consistently with them, even when a director might personally have approached a matter differently. If governing documents are outdated, unclear, or inconsistent with current law, the appropriate response is to pursue a proper amendment, not to ignore the documents or work around them. Counsel can assist with reviewing and updating governing documents to ensure they reflect the organization’s current operations and legal obligations. Additional Obligations Individual Accountability for Fellow Directors’ Conduct Board membership is not a passive credential. Directors have an individual obligation to respond when they become aware that a fellow director, or an officer, is engaging in conduct that is illegal, in violation of fiduciary duties, or otherwise contrary to the organization’s interests. Awareness without action can itself give rise to personal liability. What constitutes an adequate response will depend on the circumstances, but in serious cases it may require raising the issue formally at a board meeting, consulting with legal counsel, or escalating the matter through appropriate channels. Directors who simply look away when misconduct is apparent do so at their own legal risk. Confidentiality: An Absolute Obligation Board deliberations are confidential. Information discussed in the course of board business — whether in formal meetings or in communications among directors — may not be shared with individuals who are not part of the board or otherwise properly within the organization’s governance structure. This obligation applies regardless of how a vote came out and regardless of whether the director agreed with the board’s decision. The reason for this rule is practical as well as legal. Open and candid board discussion depends on the mutual understanding that what is said in the boardroom stays there. When confidentiality is breached, even informally, even with good intentions, it chills future deliberation and can seriously damage the organization. Directors should treat all board communications as confidential by default, and should decline to discuss board matters with family members, professional colleagues, or anyone else outside the governance structure. Written Communications: Assume Everything Is Public In litigation and regulatory proceedings, written communications are among the first materials sought in discovery which includes emails, text messages, board messaging platforms, and any other written communication, regardless of how informal the channel. There is, in practical terms, no such thing as a private electronic communication for a nonprofit director. Directors should bring the same care to their written communications that they bring to formal board proceedings. This means avoiding emotional or inflammatory language, refraining from personal attacks, and thinking carefully before committing anything to writing that would be embarrassing, misleading, or legally problematic if it later appeared in a courtroom or regulatory hearing. When in doubt, a phone call is often the better choice. And when written communication is particularly sensitive, having it reviewed by counsel before sending is a worthwhile precaution. Nonprofit Directors Are Accountable to the Public Unlike the directors of a for-profit corporation, who owe their primary duty to shareholders, nonprofit directors operate in a context of broader public accountability. The tax-exempt status and public-benefit mission of a nonprofit organization mean that its governance is, in a meaningful sense, a matter of public interest. This is the foundation of many of the rules that apply to nonprofits and their directors, and it is why the standards for nonprofit governance are taken seriously by regulators, courts, and the communities these organizations serve. Directors who internalize this principle — who understand that their role is not simply to serve the membership but to advance a mission for the broader public good — tend to govern more effectively and with greater integrity. A Final Word The legal obligations of nonprofit board service are real, and they apply from the moment a director takes office. But they are not burdensome for directors who approach the role with the seriousness it deserves. Directors who stay informed, act in the organization’s best interest, follow the governing documents, communicate carefully, and hold themselves and their colleagues accountable will, in virtually every case, meet their legal obligations and serve their organization well.
May 20, 2026
Business
Virginia Reshapes Franchising with Ban on Post-Term Non-Competes
Franchisors with Virginia locations should prepare to revise their franchise agreements and Virginia-specific disclosure materials. Beginning July 1, 2026, Virginia law will prohibit most post-termination non-compete provisions in covered franchise agreements and will require those agreements to be governed by Virginia law. For franchisees, the amendments create greater post-exit flexibility and reduce the ability of franchisors to rely on out-of-state governing-law clauses to avoid Virginia’s statutory protections. The practical message is straightforward: franchisors should review Virginia-facing templates, renewal and amendment practices, confidentiality and trade secret protections, and enforcement strategies well before making any new offer, sale, renewal, extension, or amendment for a Virginia location on or after the effective date. Implications for Virginia Franchisors and Franchisees These changes matter immediately for drafting and compliance. A franchisor that continues to use a standard national form for Virginia deals without modification risks including provisions that will no longer be permitted once the new law takes effect. Agreements entered into before July 1, 2026, are not automatically displaced, but renewals, extensions, and amendments on or after that date may trigger the new requirements, making it especially important to review not only new-deal documents but also legacy agreements that may soon come back into circulation. Public commentary following the legislation has also noted guidance issued on April 14, 2026, by the Virginia State Corporation Commission’s Division of Securities and Retail Franchising regarding updates to franchise disclosure materials and Virginia addenda, underscoring that compliance will require attention not just to contracts but also to disclosure practice. How Virginia’s New Franchise Non-Compete Law Affects Franchise Agreements The amendments to Virginia’s Retail Franchising Act, enacted through House Bill 69 and the companion Senate Bill 240, apply to franchises that require or contemplate a place of business in Virginia, a concept broad enough to reach more than traditional brick-and-mortar outlets and potentially many service concepts operating in the Commonwealth. Effective July 1, 2026, the law makes it unlawful to offer or enter into a covered franchise agreement that restricts the franchisee’s right to engage in the business of offering, selling, or distributing goods or services at retail after termination or expiration of the franchise agreement. Just as significantly, covered franchise agreements must now be governed by Virginia law, preventing franchisors from selecting another state’s law in an effort to sidestep Virginia’s franchisee protections. Virginia Franchise Non-Compete Exceptions The statute includes a narrow exception when a franchisee voluntarily sells the franchise at a mutually agreed price, whether to a third party or back to the franchisor. In that setting, the franchisor or the buyer may require the selling franchisee to agree to a non-compete that is binding for up to two years after the sale. Outside that sale context, however, post-term non-compete restrictions in covered Virginia franchise agreements are no longer permitted. The law is also expressly prospective: contracts entered into, extended, or modified on or before June 30, 2026, remain unaffected, but activity on or after July 1, 2026, may bring an agreement within the amended statute’s reach. The Business Impact of Virginia’s Franchise Non-Compete Ban and Compliance Steps for Franchisors Taken together, the amendments materially rebalance franchise relationships for Virginia locations in favor of franchisees by eliminating most post-termination non-competes and requiring Virginia law to govern covered agreements. That governing-law requirement may prove especially consequential, because it reduces the usefulness of contract provisions that previously might have directed disputes toward more franchisor-friendly legal standards. It also means that franchisors evaluating renewals, transfers, terminations, and system enforcement in Virginia will need to assess those decisions against Virginia’s franchise-specific statutory framework. For franchisors, the likely response will be to strengthen other forms of system protection that do not depend on a post-term non-compete. Confidentiality provisions, trade secret controls, non-solicitation language where appropriate, access limits on customer data, tighter operational safeguards, and clearer brand-transition requirements may all take on greater importance. The statute does not prevent a franchisor from pursuing monetary remedies when a franchisee breaches contractual obligations during the term, so careful drafting around in-term defaults, de-branding obligations, liquidated damages, and post-termination transition steps may become more important than ever. The new law may also influence how franchisors think about renewal rights in Virginia. If a former franchisee cannot be restricted from competing after expiration in most circumstances, franchisors may revisit whether renewal should remain automatic or broadly available, and whether Virginia-specific renewal provisions should be adjusted to reflect the changed competitive landscape. For franchisees, by contrast, the law creates additional bargaining leverage and a more realistic ability to continue in business after the franchise relationship ends, provided they do so without violating enforceable contractual duties that survive termination. More broadly, Virginia’s action may be an early indication of where franchise regulation is heading in other jurisdictions. Franchisors operating nationally may therefore want to treat these amendments not as an isolated state-law issue, but as a signal to review their broader contract architecture and protective covenants across the system. For now, however, the immediate takeaway is clear: any franchisor with Virginia-facing agreements or pending registration materials should act promptly to align its documents, disclosures, and operational protections with the Commonwealth’s new rules before July 1, 2026.
May 18, 2026
Intellectual Property
Prelaunch Trademark Risk: What In‑House Counsel Should Address Before Product Launch
Most trademark problems do not begin with a refusal from the USPTO or a cease-and-desist letter from a competitor. They begin much earlier during product development and brand naming, often before legal is meaningfully involved. For in-house counsel, pre-launch trademark risk is less about technical doctrine and more about process. Decisions made under time constraints, reliance on incomplete clearance signals, selection of legally weak brands, and launching without a filing strategy all narrow options later and increase the cost of correction. The companies that encounter the most difficult trademark issues are rarely careless. They move quickly, assume issues can be addressed later and underestimate how much momentum limits flexibility once a product is public. This article outlines the most common pre-launch trademark mistakes and explains how in-house counsel can reduce risk without slowing down the business. Trademark Risk Begins Before Legal Engagement Most trademark issues do not originate with the USPTO. They originate months earlier, often before an application is filed and before legal is formally engaged. From an in-house perspective, this distinction matters. When disputes, launch delays, or rebrands arise, the underlying issue is rarely legal uncertainty. More often, it is the result of early decisions made quickly and without a clear understanding of how difficult it will be to unwind later. Product launches compress timelines and concentrate risk. Naming decisions intersect with marketing, product design, domain strategy, packaging, investor communications, and customer-facing materials. Once those elements begin to align around a particular name, even modest legal concerns can feel disruptive rather than protective. By the time a trademark issue surfaces, legal’s role often shifts from risk management to damage control. The objective of pre-launch trademark oversight is not to prevent launches. It is to ensure that risk is identified early enough that the business still has meaningful choices. Naming Is a Business Decision with Legal Consequences Brand naming is often treated as a creative exercise. Teams generate options under tight timelines. Internal alignment forms quickly around a preferred name. That name begins appearing in materials across the organization. By the time legal is consulted, the decision may feel effectively final. The risk is not creativity. It is commitment before clearance. From an in-house standpoint, the most effective intervention is not controlling the naming process but setting expectations. No name is final until trademark risk has been evaluated. That evaluation does not always need to be exhaustive. In many cases, a high-level assessment is sufficient to identify obvious conflicts or structural weaknesses. When legal review is positioned as a standard step rather than an exception, teams are less likely to treat it as an obstacle. Over time, this reframes trademark review as part of launch planning, not a last-minute hurdle. Superficial Clearance Signals Create False Confidence Teams often rely on informal indicators to assess trademark risk, especially under time limitations: a domain is available, a state entity search is clean, a quick internet search shows no obvious conflicts. These signals can create a strong sense of comfort. The problem is that trademark risk does not turn on identical names or identical industries. It turns on the likelihood of confusion, a fact-specific analysis that considers the relationship between goods or services, channels of trade, and overall commercial impression. Those considerations rarely surface through informal searches. From a general counsel perspective, the issue is not that teams perform preliminary checks. It is when those checks are treated as conclusions rather than inputs. When “nothing obvious came up” becomes “this is safe,” the business begins investing in a name based on assumptions that may not hold. Early legal review recalibrates that assumption. It identifies where uncertainty exists and provides context for evaluating risk before additional resources are committed. Clearance Does Not Equal Strength Even when a name clears existing rights, it may still be a poor trademark. Descriptive or highly suggestive names are often attractive because they communicate product features quickly. From a legal standpoint, however, these marks tend to offer limited exclusivity and are more difficult to enforce. This distinction is often overlooked. Many weak marks can be registered. Registration alone does not ensure meaningful protection. In-house counsel plays an important role in distinguishing between registrability and strength. A mark that technically clears may still leave the company exposed to competitors operating nearby in the market. Over time, that exposure can lead to inconsistent enforcement and frustration when legal remedies do not align with business expectations. Framing trademarks as strategic assets rather than filing exercises helps align naming decisions with long-term differentiation. Launching Without a Filing Strategy Narrows Options Speed to market is a legitimate business priority. So is trademark priority. Companies often launch products without deciding which marks warrant protection, how consistently the brand will be used, or how it may expand across products, services or jurisdictions. In some cases, filing decisions are deferred simply because they have not been considered. Once public use begins, options narrow. Changes become more visible and course correction becomes more difficult. Strategy becomes reactive rather than intentional. From an in-house perspective, early planning does not need to be complex. Even a limited pre-launch discussion can clarify key questions: Which names are central to the business, and which are experimental? Is the mark likely to expand beyond a single product? Are international markets realistically in scope? Addressing these questions early preserves flexibility for enforcement, expansion and future transactions. “We’ll Fix It Later” Is Rarely a Strategy A common assumption is that trademark issues can be addressed after launch. Sometimes they can. Often, they cannot. Rebrands are expensive. Enforcement leverage weakens over time. International expansion frequently exposes conflicts that were not apparent at launch. What initially appears to be a manageable legal issue can become a broader commercial problem. By the time the issue is clear, the available options are typically narrower and more costly. Legal solutions may feel misaligned with business momentum. In-house counsel does not need to control naming decisions. They do need to normalize early involvement, set expectations around clearance, and ensure that trademark decisions align with long-term business objectives. Trademark Risk Is a Process Issue Most preventable trademark risks arise before legal engagement. It stems from timing, assumptions, and informal decision-making, not from misunderstanding the law. For general counsel, the opportunity lies in process. Clear expectations around when legal is consulted, how preliminary clearance is interpreted, and when filing strategy is addressed can significantly reduce risk without slowing the business. When trademark considerations are integrated into launch planning early, legal’s role shifts from reacting to problems to shaping outcomes. That shift preserves flexibility, reduces surprises, and allows trademark protection to support business growth. The objective is not perfection. It is awareness, alignment, and control at the point when decisions are still flexible.
May 14, 2026
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
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