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Five Stories that Matter in Michigan This Week – March 24, 2023

$10 Million Microbusiness Loan Program Launched for Michigan Women, Entrepreneurs of Color

Michigan Women Forward recently announced the launch of a $10 million loan program for women and entrepreneurs of color. The Michigan Economic Opportunity Fund program offers funds to small business owners who may not qualify for more traditional loans.

Why it Matters: Small business startup and expansion is key to Michigan’s economic vitality. This program will help women entrepreneurs who identify as socially and economically disadvantaged due to a lack of access to capital and credit.

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Recent NLRB Decision Makes Unlawful the Proffer of a Severance Agreement With Standard “Confidentiality” and “Non-Disparagement” Provisions

In McLaren Macomb, 372 NLRB No. 58 (2023), the National Labor Relations Board overruled two prior decisions and held that an employer violates the National Labor Relations Act “when it proffers a severance agreement with provisions that would restrict employees’ exercise of their NLRA rights,” including agreements containing reasonably standard confidentiality-of-agreement and non-disparagement provisions.

Why it Matters: The typical “remedy” for a violation of this nature, and the remedy awarded in McLaren, is to “cease and desist” from proffering unlawful language in future severance agreements and post a notice of the immediate violation in prominent places in the employer’s facility. Now that the new “rule” is announced, however, future remedies could include (a) rescission of the offending agreements; (b) notification of other employees who signed unlawful agreements (subject to the statutory 6-month limitations period) and other remedial orders. Contact your Fraser Trebilcock attorney.

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Michigan Right-to-Work Law Likely to be Repealed Soon

The Michigan Senate approved a bill on March 14 to repeal the state’s right-to-work law that currently allows employees in unionized jobs to opt out of membership and paying dues. The Michigan House previously passed its own version of the bill. Governor Whitmer has indicated she will sign the final bill into law once it reaches her desk.

Why it Matters: It’s time to review current collective bargaining agreements with labor law counsel to prepare for a post-right-to-work environment in Michigan. Employers should also be thinking about their approach to upcoming collective bargaining agreement negotiations in light of these developments.

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Michigan Cannabis Sales Hit $216 Million in February

Michigan cannabis sales surpassed $200 million in February, per recent data published by the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $206,378,444.08, which medical sales came in at $10,010,601.91.

Why it Matters: Marijuana sales remain strong in Michigan, particularly for recreational use. However, there still are significant concerns about profitability and market over-saturation that the industry is contending with.

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How Trademarks Protect Your Business

Trademarks operate to distinguish your business, build consumer goodwill and solidify your reputation as a source for the goods or services. In most cases, a trademark is a distinctive word, phrase, logo or design that is associated with or applied to a category of goods or services.

Why it Matters: If you are in the business of providing goods or services, then it is strongly recommended that you consult with an intellectual property lawyer to get the best protection in a timely manner. Learn more.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Cannabis Law | Sean Gallagher
Intellectual Property | Jared Roberts

Five Stories that Matter in Michigan This Week – March 17, 2023

Business Education Series – Teaching Leadership

Hosted at the Lansing Regional Chamber on Wednesday, March 22 at 10:00 to 11:30 a.m., the March Business Education Series will have Brain Town, founder and CEO of Michigan Creative, who will discuss how to inspire your staff to be the leaders they all have inside of them.

Why it Matters: Brian will also show you how to write core values that can guide your business and help form an unstoppable team. Attendees will learn how to write and use core values, leadership tips, and ways to inspire greatness. Business owners and leaders are encouraged to attend! Learn more.

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How Patents Protect Your Business

A patent is a legal monopoly for protecting a utilitarian device, system, machine, composition or process. A patent owner has the right to prevent others from making, using, selling or importing a protected invention for a limited time.

Why it Matters: The U.S. is a “first-to-file” system, so it is imperative that an inventor keep the details of their invention confidential until a patent application has been filed. Also, timing is of the essence to prevent a competitor from winning the race to the Patent Office. Learn more.

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Noteworthy Michigan Cannabis Brand Put into Receivership

Skymint Brands, a high-profile Michigan consumer cannabis brand, was placed into receivership on March 7. According to a lawsuit filed by Tropics, LP against Skymint’s parent company, Green Peak Industries, Inc., Tropics is owed more than $127 million in loans that are in default.

Why it Matters: While Michigan has experienced strong sales of recreational marijuana as a whole, prices per ounce have fallen significantly, making it difficult for many dispensaries to generate profits. The fact that Skymint’s assets were put into receivership is also noteworthy, as state court receivership has become an alternative to bankruptcy for distressed cannabis companies. Because cannabis is still illegal at the federal level, companies can’t access federal bankruptcy to reorganize or liquidate.

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CRA Publishes February 2023 Data, Average Price Hovers Near All-Time Low

The Cannabis Regulatory Agency recently published its latest monthly data, showing that the average price for an ounce of cannabis is $86.00, an increase from the all-time low of $80.16 in January of this year.

Why it Matters: While the prices of cannabis and cannabis-related products continue to decrease and make consumers happy, growers on the other hand are seeing profits decrease resulting in them seeking ways to halt new licenses to be granted in an effort to steady prices. Contact our cannabis law attorneys if you have any questions.

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Ten Reasons You May Want to Consider a Family Cottage Succession Plan

The goal of cottage succession planning is to set up legal ground rules that provide the best chance to keep a cottage in the family for future generations.

Why it Matters: Here are a few reasons why you and/or your family may want to consider a family cottage succession plan. Prevents a joint owner from forcing the sale of the cottage through an action for partition, prevents transfer of an interest in the cottage outside the family, protects owners from creditor claims, and establishes a framework for making decisions affecting the cottage. See the complete list from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Intellectual Property | Jared Roberts
Cannabis Law | Sean Gallagher
Cottage Law | Mark Kellogg

Five Stories that Matter in Michigan This Week – March 10, 2023

US Supreme Court Makes Clear that Highly Compensated Employees can be Eligible for Overtime Pay

In Helix Energy Solutions Group v. Helix, the U.S. Supreme Court ruled that highly compensated employees—in this case the employee at issue earned more than $200,000 per year—can be eligible for overtime pay if they are paid on a daily basis as opposed to a salary basis.

Why it Matters: Many employers mistakenly assume that highly compensated employees are not eligible for overtime pay. However, under the Fair Labor Standards Act, employees are exempt from overtime if they earn at least $107,432 per year on a salary basis (and perform executive, administrative, professional or outside sales work. Because the penalties for noncompliance can be steep, employers should consult with legal counsel to help ensure that their workers are classified and paid in accordance with state and federal guidelines.

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How Copyrights Protect Your Business

Copyright is the exclusive legal protection that covers an original work of authorship. Copyrights vest upon creation of the work, which means placing the work onto a tangible medium (e.g., applying paint to a canvas or words to a screenplay).

Why it Matters: As noted above, copyrights vest upon creation of the work, even if it isn’t published. Similar to trademark law, it can be difficult to enforce your copyright if the work is not registered with the U.S. Copyright Office. Learn more.

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Department of Labor Issues Guidance to Employers on Telework

Why it Matters: The Bulletin provides that the protections under the FLSA apply equally to employees who telework as to employees working at an office, factory, construction site, retail outlet, or any other worksite location. Learn more.

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Business Education Series – Teaching Leadership

Hosted at the Lansing Regional Chamber, the March Business Education Series will have Brain Town, founder and CEO of Michigan Creative, who will discuss how to inspire your staff to be the leaders they all have inside of them.

Why it Matters: Brian will also show you how to write core values that can guide your business and help form an unstoppable team. Attendees will learn how to write and use core values, leadership tips, and ways to inspire greatness. Business owners and leaders are encouraged to attend! Learn more.

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The Ins and Outs of Cottage Succession Planning in Michigan (Part Two)

A cottage plan is an agreement that describes how a cottage will be shared, managed and passed on to future generations of family members. Cottage plans typically cover a range of issues that can impede the succession of a cottage if left unaddressed.

Why it Matters: There are significant advantages to having a cottage plan that utilizes an LLC or trust structure. There is no single option that is best for all families, so it’s important to consult with an experienced cottage law attorney to determine what option is right for you. Learn more from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | Aaron Davis

Intellectual Property | Jared Roberts

Cottage Law | Mark Kellogg

Five Stories that Matter in Michigan This Week – March 3, 2023

DOL Issues Telework Guidance to Employers

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How Trademarks Protect Your Business

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$35 Million in Grants Available for Small Nonprofits

Why it Matters: Under this initiative, called the MI Nonprofit Relief Fund, grants in amounts between $5,000 and $25,000 will be awarded to selected entities with annual revenues total under $1 million. In addition, eligible entities must be based in Michigan and recognized by the IRS under Section 501(c)(3). Learn more.

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Michigan Cannabis Sales Over $200 Million in January

Marijuana sales surpassed $200 million in January, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $196,008,634, while medical sales came in at $11,295,443.

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The Ins and Outs of Cottage Succession Planning in Michigan (Part One)

When purchasing a cottage, it’s often the intent of the owner to pass the cottage on to future generations to enjoy. Unfortunately, that vision may not become a reality due to challenges such as high property taxes, differing objectives among heirs and resulting family disputes that result in the cottage being sold upon the owner’s death.

Why it Matters: Common issues that prevent the passing of a cottage to future generations in Michigan can be addressed through careful cottage succession planning. Learn more from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

DOL Issues Telework Guidance to Employers

As the modern workforce evolves, more and more employees are enjoying the flexibility of working from home, teleworking, or working away from the employer’s premises. These arrangements allow for greater work-life balance, increased productivity, and cost savings. However, as these teleworking arrangements become more common, it is important for both employers and employees to understand the protections and rights available under the law.

On February 9, 2023, the U.S. Department of Labor (DOL) issued a Field Assistance Bulletin (Bulletin) addressing several questions related to compliance with the Fair Labor Standards Act (FLSA) and Family and Medical Leave Act (FMLA) when a business employs teleworkers. While Field Assistance Bulletins do not have the effect of law, they are nonetheless important statements of DOL policy and statutory interpretation.

The Bulletin explains that under the FLSA, employees who telework are entitled to compensation for all hours worked, including short rest breaks. In qualifying circumstances, employees are also entitled to take breaks to express breast milk free from intrusion and shielded from view. The Bulletin provides that the protections under the FLSA apply equally to employees who telework as to employees working at an office, factory, construction site, retail outlet, or any other worksite location. This means that teleworking employees are entitled to the same compensation and protection as employees working at a traditional worksite.

Similarly, under the FMLA, all hours worked are counted for purposes of determining an employee’s eligibility for leave. The Bulletin provides that when an employee teleworks from home consistently or in combination with working at another or various worksites, all of those hours count towards determining eligibility for FMLA leave. However, the determination of the worksite for an employee who teleworks is fact-specific and will be based on factors such as where the employee reports to work or the location where the employee’s assignments are made.

In conclusion, teleworking arrangements provide numerous benefits to both employees and employers. However, it is important to remember that these arrangements do not exempt employees from the protections and rights afforded to them by the FLSA and FMLA. While the Bulletin doesn’t have the force of law, it’s an important indicator of DOL policy regarding FLSA and FMLA enforcement. Employers and employees must be mindful of the protections and rights the DOL describes are due to telework employees to ensure that teleworking arrangements are fair and equitable for all parties involved.

For questions or assistance, please contact your Fraser Trebilcock attorney.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Aaron L. Davis is Firm Vice President and Treasurer, and Chair of Fraser Trebilcock’s labor law practice. You can reach him at adavis@fraserlawfirm.com or (517) 377-0822.

Five Stories that Matter in Michigan This Week – February 24, 2023

$35 Million in Grants Available for Small Nonprofits

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Michigan Cannabis Regulatory Agency Suspends Licenses, Issues Advisory

The Michigan Cannabis Regulatory Agency (CRA) recently suspended the licenses of a marijuana processor and issued a safety advisory for items manufactured with “illicit product.”

Why it Matters: This action is an important reminder to marijuana businesses in Michigan that the CRA is active in regulating businesses and taking enforcement action when appropriate. TAS Asset Holdings is the second processor to have its license suspended by the CRA this month. The CRA also announced disciplinary action against 10 marijuana businesses on February 10.

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CRA Publishes January 2023 Data, Average Price Drops

Per recent monthly data published by the Cannabis Regulatory Agency, the average retail flower price of an ounce of cannabis is $80.16, an all-time low, and almost a 50% decrease compared to last year’s average price of $152.74.

Why it Matters: While the prices of cannabis and cannabis-related products continue to decrease and make consumers happy, growers on the other hand are seeing profits decrease resulting in them seeking ways to halt new licenses to be granted in an effort to steady prices. Contact our cannabis law attorneys if you have any questions.

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DOL Issues Telework Guidance to Employers

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ERISA Health and Welfare Plan Voluntary Audit Service

Fraser Trebilcock is excited to introduce our Health and Welfare Plan Voluntary Audit Service to help businesses ensure their health and welfare plans are compliant with the Employee Retirement Income Security Act (ERISA).

Why it Matters: ERISA is a complex set of regulations that governs employee benefit plans, including health and welfare plans. Failure to comply with ERISA can result in costly fines and penalties, not to mention damage to your company’s reputation. Learn more from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Business & Tax | Robert Burgee
Cannabis Law | Sean Gallagher
Labor, Employment & Civil Rights | Aaron Davis
Employee Benefits | Robert Burgee

$35 Million in Grants Available for Small Nonprofits

The State of Michigan, Department of Labor and Economic Opportunity (LEO) and Michigan Nonprofit Association (MNA) have teamed up to help Michigan charities whose operations were impacted by the COVID-19 pandemic. Under this initiative, called the MI Nonprofit Relief Fund, grants in amounts between $5,000 and $25,000 will be awarded to selected entities with annual revenues total under $1 million. In addition, eligible entities must be based in Michigan and recognized by the IRS under Section 501(c)(3).

At this time, interested nonprofit organizations are being invited to complete an “Intent to Apply” form at MiNonprofitRelief.org, a website managed by MNA, who is responsible for managing the fund. Complete applications will be made available in March 2023.

Contact your Fraser attorney for further information and assistance in applying for this exceptional funding opportunity.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Robert D. Burgee is an attorney at Fraser Trebilcock’s Lansing office with over a decade of experience counseling clients with a focus on corporate structures and compliance, licensing, contracts, regulatory compliance, mergers and acquisitions, and a host of other matters related to the operation of small and medium-sized businesses and non-profits. He can be reached at bburgee@fraserlawfirm.com, or at 517.377.0848.

Edward J. Castellani is an attorney and CPA with Fraser Trebilcock with over three decades of experience handling business transactions. He may be contacted at ecast@fraserlawfirm.com or 517-377-0845.

Name, Image, Likeness Law for Student-Athletes Takes Effect in Michigan

Michigan House Bill 5217, which was passed into law in 2020, took effect on December 31, 2022. The new law set standards for how student-athletes can earn compensation for the use of their name, image, and likeness (“NIL”) in Michigan. The NCAA also has its own NIL policy, which took effect on July 1, 2021.

It’s important that Michigan student-athletes, covered higher education institutions, and businesses ensure that NIL deals comply not only with NCAA rules and regulations, but also with the new standards that will apply in the State of Michigan.

For example, higher education institutions are prohibited from paying a student-athlete compensation directly for the use of their NIL rights, or revoking or reducing a student-athlete’s athletic scholarship because they earned compensation from an NIL deal.

The law also places certain limitations and obligations upon student-athletes, including:

Prior to entering into any endorsement agreement, the student-athlete must disclose the proposed opportunity to a university-designated official at least seven days prior to committing to the opportunity or contract.
Student-athlete endorsers are prohibited from entering into an apparel contract if that contract or promotional relationship conflicts with any provision of their school’s existing apparel contract.
Restrictions on the use of the name, trademarks, service marks, logos, symbols, or other intellectual property of their university in conjunction with the student-athletes use of their name, image or likeness.

This is an evolving area of the law in Michigan and throughout the country. There is some speculation that a new federal law will be passed standardizing how NIL works throughout the country. Currently, however, the restrictions and obligations on parties participating in NIL deals must be discerned from a patchwork of NCAA rules and regulations, state laws, and university policies. For questions or assistance, please contact Ryan Kauffman.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Ryan K. Kauffman is a Shareholder at Fraser Trebilcock with more than a decade of experience handling complex litigation matters. You can contact him at rkauffman@fraserlawfirm.com or 517.377.0881.

Five Stories that Matter in Michigan This Week – February 3, 2023

1. Michigan Legislature Expands EITC Credit

The Michigan legislature recently passed a bill expanding Michigan’s Earned Income Tax Credit (EITC). The approved legislation retroactively increased the state’s EITC to 30% of the federal credit, where it is estimated to impact over 700,000 low-income workers.

Why it Matters: Per the Michigan League for Public Policy, upping the state’s EITC credit means that for individuals and their families who are eligible can receive an average of $750 credit per family.

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2. CRA Publishes December 2022 Data, Average Price Drops

According to recent monthly datapublished by the Cannabis Regulatory Agency, the average retail flower price of an ounce of cannabis is $90.68, an all-time low and more than a 50% decrease compared to last year’s December 2021 average price of $184.90.

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3. Michigan Legislature Approves $1.1 Billion Supplemental Spending Bill

The Michigan Legislature on Thursday approved a supplemental spending bill totaling $1.1 billion over two years. The spending includes $150 million to deposit into the state’s Strategic Outreach and Attraction Reserve Fund, which the state has used to pay major incentives to manufacturers with plans to build batteries and electric vehicles, and $150 million to develop a tax credit program to reduce housing costs.

Why it Matters: The bill, one of the first acts of the Democrat-controlled legislature, generated some controversy. Republicans complained that there was insufficient time to review the bills, and raised questions about how some of the spending is to be allocated.

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4. Upcoming Changes to 529 Plans Following SECURE Act 2.0

President Biden signed the SECURE Act 2.0 into law on December 29, 2022. Under certain conditions, Section 126 of the Act will amend the IRS Code to allow tax and penalty free rollovers from 529 accounts to Roth IRAs.

Why it Matters: There has been a decline in 529 accounts because families are worried about needing to take non-qualified withdrawals of leftover funds within the account, thus incurring a penalty. Section 126 will provide individuals with an option to make better use of leftover funds within a 529 account. Section 126 will become effective with respect to distributions after December 31, 2023. Learn more on the topic.

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5. What You Need to Know About Pet Trusts

A pet trust is a legal document that allows you to provide for the care of your beloved pet if you become incapacitated and after you pass away. A pet trust can be created as a standalone document, or as part of a revocable (living) trust or will. In addition, a durable power of attorney can provide instructions to an agent for the care of a pet during your lifetime.

Why it Matters: Estate planning with pets in mind is an increasingly popular way for pet owners to ensure that their furry companions are taken care of, even when the owners can no longer care for themselves. Learn more about how to effectively care for your pets if you become incapacitated or pass away.

Related Practice Groups and Professionals

Business & Tax | Ed Castellani
Cannabis Law | Sean Gallagher
Labor, Employment & Civil Rights | Aaron Davis
Trusts & Estates | Elizabeth Siefker

SECURE Act 2.0 and Changes to 529 Accounts

Under this Section, a beneficiary of a 529 account is permitted to rollover up to $35,000 over their lifetime from any 529 account in their name to a Roth IRA. These rollovers will be subject to Roth IRA annual contribution limits, and the 529 account must have been open for more than 15 years.

There has been a decline in 529 accounts because families are worried about needing to take non-qualified withdrawals of leftover funds within the account, thus incurring a penalty. Section 126 will provide individuals with an option to make better use of leftover funds within a 529 account. Section 126 will become effective with respect to distributions after December 31, 2023.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Elizabeth M. Siefker is an attorney at Fraser Trebilcock in the trusts and estates practice group focusing on estate planning, elder law, and business planning. You can reach her at esiefker@fraserlawfirm.com, or at 517.377.0801.