North America

Ohio Senate passes bill to create tax credit for Opportunity Zone investments

We have been following a new federal program that provides federal tax benefits for qualifying investments in geographically designated Opportunity Zones. As part of federal tax reform in 2017, Congress created the Opportunity Zone program to encourage investment in low-income areas. Last October the IRS and Treasury Department issued proposed regulations to provide investors with further guidance on the program. Now, the Ohio General Assembly is seriously considering a tax credit against the Ohio income tax with similar policy objectives in mind.

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Harden Your Organization’s Domain Name System (DNS) Security To Protect Against Damaging Data Loss and Insider Threat

The importance of the Domain Name System (DNS) to your organization’s cybersecurity cannot be understated. Communications between computers on the Internet depend on DNS to get to their intended destination. Network communications begin with a query to DNS to resolve the human readable domain name to a numeric Internet Protocol (IP) address required by computers to route the transmission. A malicious party who is able to exploit a weakness in DNS can re-route sensitive traffic, including Protected Health Information (PHI), Personally Identifiable Information (PII) and other valuable information from the intended recipient to the malicious actor. Indeed, as recent attacks on DNS indicate, even encrypting the communication may not be an effective countermeasure because the transmission can be decrypted after interception. Malicious employees and other insiders may also abuse DNS as a side channel to covertly exfiltrate the organization’s most sensitive proprietary information avoiding Data Loss Prevention (DLP) countermeasures that may operate at different layers of the communication process. The recent attacks reported by the Department of Homeland Security reinforce the need to protect DNS functionality as a fundamental component of your organization’s overall cybersecurity and compliance strategy.

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FDA Announces New Proposed Rule to Enhance Mammography Services

On March 27, 2019, the FDA announced that it would be proposing new amendments to key regulations regarding mammography facilities that would require these entities “to tell women more about how dense breast tissue can affect their health and increase their cancer risk.”  The proposed changes to mammography facility regulations would be the first issued in more than 20 years.  The FDA believes the change will “expand the information mammography facilities must provide to patients and health care professionals, allowing for more informed medical decision-making.”  In addition, FDA is proposing to modernize quality standards by, for example, expressly authorizing FDA communications with patients and practitioners in the event of quality issues, requiring use of FDA-approved or -cleared digital accessories, and strengthening recordkeeping requirements.  These changes not only enhance regulatory requirements, but likely foreshadow increasing enforcement and communications from FDA with regard to mammography services.

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March Madness Department of Labor-style

While the rest of us were busy filling out our NCAA tournament brackets, the U.S. Department of Labor (DOL) was engaged in another kind of March Madness. In a flurry of activity during the month of March, the DOL issued two notices of significant Fair Labor Standards Act (FLSA) rulemaking along with three new Opinion Letters on Fair Labor Standards Act (FMLA) and FLSA issues.

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FDA Commissioner Gottlieb Says Agency Will Not Tolerate Deceptive Marketing of CBD Products; Issues Warning Letters

On April 2, 2019, FDA issued a press release featuring a statement from FDA Commissioner Scott Gottlieb announcing the Agency’s latest enforcement actions taken against companies engaging in unlawful marketing of cannabidiol (CBD) products.  Coming just days before Gottlieb’s anticipated departure from the Agency, this news otherwise is unsurprising given recent events on the federal and state level.  In a December 2018 press release issued on the heels of the Farm Bill’s passage, FDA forecast its intention to step up enforcement against CBD products, and earlier this year state and local governments initiated seizures of CBD products from store shelves.  For manufacturers, retailers, and consumers, the takeaway from these recent statements and actions is that it remains unlawful under the Federal Food Drug and Cosmetic (FD&C) Act to market conventional foods or dietary supplements containing CBD.

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Howard & Howard Expands Royal Oak Office; Welcomes Esshaki and Lee

Royal Oak-based law firm Howard & Howard is pleased to announce that Eric S. Esshaki and Timothy D. Lee have joined the firm. They will both practice out of the firm’s Royal Oak office.

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No-Poach Clauses in Franchise Agreements: Four More Franchisors Agree to Drop Them and the DOJ Weighs In on Class Actions Alleging Antitrust Violations

On March 12, 2019, Dunkin’ Donuts, Arby’s, Five Guys Burgers and Fries, and Little Caesars agreed to stop including “no-poach” clauses in their franchise agreements and no longer to enforce such clauses in existing agreements. A no-poach clause is an agreement between employers not to hire each other’s employees. The franchisors agreed to end this practice following an investigation by a coalition of attorneys general from 14 states into the use of no-poach clauses in fast food franchise agreements.[1] In a press release announcing the settlement, Maryland Attorney General Brian Frosh explained his concern “that no-poach provisions make it difficult for workers to improve their earning potential by moving from one job to another or seeking a higher-paying job at another franchise location, and that many workers are unaware they are subject to these no-poach provisions.”

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Ask and You Shall Receive: Straws and Soda with Kids’ Meals Only Available upon Request

Over the past few years, cities have enacted laws to mandate the default drink sold with kids’ meals and only give plastic straws to consumers upon request. In September 2018, when then-Governor Jerry Brown signed SB 1192 and AB 1884 into law, California became the first state to enact these types of measures statewide. In the current legislative session, other states are following suit and proposing statewide legislation to mandate certain default drinks for kids’ meals and to ban or limit single-use plastic straws. Most of these laws define a “single-use plastic straw” as a straw predominantly made of plastic derived from either petroleum or a biologically based polymer that is designed to be used once. The following is a brief summary of the enacted and proposed laws.

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Maryland General Assembly Overrides Veto to Enact Bill Increasing Minimum Wage to $15

On March 22, 2019, we wrote that the two houses of the Maryland General Assembly had agreed on a conference report adopting the Senate’s version of a bill that would increase the state-wide minimum wage to $15 by 2025 or 2026, depending on the size of the company, with two minor changes. We also discussed the bill on March 18, 2019.

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NLRB Responds to Congressional Inquiry Regarding Proposed Joint-Employer Rule

Since 2015, employers have faced continued uncertainty regarding which standard the National Labor Relations Board (“NLRB” or the “Board”) will apply when determining joint-employer status under the National Labor Relations Act (“NLRA”). Businesses utilizing contractors and staffing firms or operating in partnering arrangements, as well as those engaged in providing temporaries and other contingent workers, have faced a moving target before the Board when it comes to potential responsibility in union recognition, bargaining obligations, and unfair labor practice cases.

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