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UPDATE to the Center for Medicare and Medicaid Services’ (CMS) Interim Final Rule: “Omnibus COVID-19 Health Care Staff Vaccination”

Today, December 15, 2021, the United States Court of Appeals for the Fifth Circuit stayed the nationwide preliminary injunction pertaining to the CMS health care worker vaccine mandate. The court decided to limit the injunction to the 14 states that filed the initial action, including: Louisiana, Montana, Arizona, Alabama, Georgia, Idaho, Indiana, Mississippi, Oklahoma, South Carolina, Utah, West Virginia, Kentucky and Ohio. In a brief opinion, the court found little justification for issuing an injunction outside the 14 states that brought suit. Lacking was the need for “constitutional uniformity” or “the concern that patchwork rulings would undermine an injunction limited to certain jurisdictions.” The court held that ultimate resolution of the vaccine mandate would “benefit from the airing of competing views in our sister circuits.”

This decision did not impact the preliminary injunction over the 10 states that filed suit in Missouri v Biden, (ED Mo, Nov. 29, 2021) including: Alaska, Arkansas, Iowa, Kansas, Missouri, Nebraska, New Hampshire, North Dakota, South Dakota, and Wyoming. Meaning, that only the 24 states listed are currently protected by court order and are not required to comply with the CMS mandate. As for the other 26 states and territories, including Michigan, there is nothing prohibiting CMS from implementing and enforcing the mandate’s requirements. CMS has not yet provided further guidance as to whether it will enforce the mandate in eligible jurisdictions or wait until litigation is complete. The merits challenging the mandate have yet to be addressed. Nonetheless, health care providers and suppliers in eligible jurisdictions should prepare to comply given today’s ruling.

See further details about the mandate’s requirements in our prior blog post: Across the Board Halt on Vaccine Mandates: Employers, What Does That Mean for You?

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

Lauren D. Harrington is an associate attorney at Fraser Trebilcock focusing on Employment Law. You can reach her at 517.377.0874, or email her at lharrington@fraserlawfirm.com.

Elizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2019 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.

Across the Board Halt on Vaccine Mandates: Employers, What Does That Mean for You?

The Biden administration faces setbacks as federal courts across the nation challenge several attempts to employ mandatory Covid-19 vaccinations, leaving employers in limbo. Whether you are a health care provider, federal contractor or private employer of 100 or more, here is the guidance you need to help navigate the current state of vaccine legislation:

As of today, agencies tasked with the execution of mandatory Covid-19 vaccination requirements pursuant to 86 Fed. Reg. 61555 (Health Care Workers), Executive Order 14042 (federal contractors), and 86 Fed. Reg. 61402 (Private Employers of 100+) have suspended all implementation and enforcement pending litigation in federal courts.

Center for Medicare and Medicaid Services’ (CMS) Interim Final Rule:
“Omnibus COVID-19 Health Care Staff Vaccination”

On November 4, 2021, CMS published a rule requiring staff working for Medicare-or Medicaid-certified providers to have the shots necessary to be fully vaccinated against COVID-19 by January 4, 2022 and to receive their first shot prior to December 6, 2021. The Rule applied to:

Ambulatory Surgery Centers.
Community Mental Health Centers.
Comprehensive Outpatient Rehabilitation Facilities.
Critical Access Hospitals.
End-Stage Renal Disease Facilities.
Home Health Agencies.
Home Infusion Therapy Suppliers.
Hospices.
Hospitals.
Intermediate Care Facilities for Individuals with Intellectual Disabilities.
Clinics, Rehabilitation Agencies, and Public Health Agencies as Providers of Outpatient Physical Therapy and Speech-Language Pathology Services.
Psychiatric Residential Treatment Facilities (PRTFs).
Programs for All-Inclusive Care for the Elderly Organizations (PACE).
Rural Health Clinics.
Medicare Federally Qualified Health Centers.
Long Term Care facilities.

Specifically excluded were: Religious Nonmedical Health Care Institutions, Organ Procurement Organizations, Portable X-Ray Suppliers, Assisted Living Facilities, Group Homes, Home and Community-based Services, and Physician’s Offices. All eligible staff, both current and new, working at a facility regardless of clinical responsibility or patient contact were required to comply, including: Facility Employees, Licensed Practitioners, Students, Trainees, Volunteers and Contracted Staff. Even those who performed duties offsite (such as home health, home infusion therapy, etc.) and individuals who entered into a CMS regulated facility were required to be fully vaccinated.

Under this rule, regulated employers were not only required to ensure full vaccination of its staff but to also develop processes for tracking staff vaccinations and verifying medical and religious based exemptions in alignment with federal law (ADA, Title VII of the Civil Rights Act of 1964, etc.). Those who failed to comply were advised they’d face penalties ranging from civil monetary penalties, to denial of payment, and even termination from the Medicare and Medicaid program.

As employers scrambled to meet the first dose December 6, 2021 deadline, the United States District Court for the Eastern District of Missouri, on November 29, 2021, issued a preliminary injunction against the implementation and enforcement of the Rule in ten states: Alaska, Arkansas, Iowa, Kansas, Missouri, Nebraska, New Hampshire, North Dakota, South Dakota, and Wyoming. See Missouri v Biden, (ED Mo, Nov. 29, 2021). And just a day later, on November 30, 2021, the United States District Court for the Western District of Louisiana issued a nationwide preliminary injunction to the same effect. See Louisiana v Becerra, (WD La, Nov. 30, 2021). Between the two of them, these injunctions cover all states, the District of Columbia and the US Territories. CMS has appealed both of these decisions and has filed motions for stays of these orders. Accordingly, as of December 2, 2021, CMS has suspended all activities related to the implementation and enforcement of the Rule pending future developments in the litigation.

Executive Order 14042 – Safer Federal Workforce Taskforce COVID-19 Workplace
Safety Guidance for Federal Contractors and Subcontractors

On September 9, President Biden signed Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors, directing executive departments and agencies to ensure that contracts and contract-like instruments covered by the order include a clause requiring the contractor—and their subcontractors at any tier—to, for the duration of the contract, comply with all guidance for contractor or subcontractor workplace locations published by the Safer Federal Workforce Taskforce. The guidance published required contractors and subcontractors who work on contracts of a value over $250,000 to receive full Covid-19 vaccinations by January 18, 2022.

On October 29, 2021, the States of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah and West Virginia, the governors of several of those states and various state agencies, including the Board of Regents of the University System of Georgia, filed suit seeking declaratory and injunctive relief against enforcement of Executive Order No. 14042. On November 19, 2021, the Director of the Office of Management and Budget (OMB) extended the deadline to comply (ensure full vaccination) from December 8th to January 18, 2022 and provided a public comment period through December 16, 2021. Unsatisfied, Plaintiffs amended their complaint and motion for preliminary injunction; and Intervenors and Amicus Curiae filed briefs in support of their positions. Oral arguments were held December 3, 2021.

In an order issued December 7, 2021, the District Court for the Southern District of Georgia Augusta Division: (1) granted the Associated Builders and Contractors, Inc. (“ABC”) motion to intervene, (2) denied the Associated Builders and Contractors of Georgia, Inc. (“ABC-Georgia”) motion to intervene, (3) found that the Plaintiffs showed a sufficient injury-in-fact to have standing, and (4) issued a nationwide preliminary injunction prohibiting the enforcement of the vaccine mandate for federal contractors and sub-contractors in all covered contracts in any state or territory of the United States pending litigation. See Georgia v Biden, (SD Ga, Dec. 7, 2021). While federal contractors and sub-contractors in Tennessee, Kentucky and Ohio were already discharged from the vaccine requirements due to the injunction issued by the Eastern District of Kentucky November 30, 2021, the injunction issued December 7th is nationwide, including all federal contractors and sub-contractors in Michigan.

In issuing its injunction, the court conducted an analysis of the four requisites entitling a party to a preliminary injunction: (1) a substantial likelihood of ultimate success on the merit; (2) that an injunction or protective order is necessary to prevent irreparable injury; (3) the threatened injury outweighs the harm the injunction would inflict on the non-movant; and (4) the injunction or protective order would not be adverse to the public interest. The court found that the Executive Order went far beyond addressing administrative and management issues in order to promote efficiency and economy in procurement and contracting, and instead in application, worked as a regulation of public health. Simply put, the court found that the Executive Order’s directive and resulting impact radiated too far beyond the purposes of the Procurement Act and the authority it granted to the President. In balancing the interests, the court empathized with the employees who would face termination if they refused the vaccine and stressed the burden on staffing employers would face. While the Safer Federal Workforce Task Force Guidance for Federal Contractors and Subcontractors has not yet been updated, it is clear that enforcement and implementation has been suspended.

Occupational Safety and Health Administration’s (OSHA) COVID-19
Vaccination and Testing Emergency Temporary Standard

On November 5, 2021, OSHA issued a standard requiring all employers with a total of 100 or more employees to develop, implement, and enforce a mandatory COVID-19 vaccination policy, with an exception for employers that instead adopt a policy requiring employees to elect either to get vaccinated or to undergo regular COVID-19 testing and wear a face covering at work.

The Standard applied to all private employers with 100 or more employees firm or corporate wide. In states with OSHA-approved State Plans, state and local-government employers, as well as private employers, with 100 or more employees were also subject to the requirements. Those who were not required to comply included:

workplaces covered under the Safer Federal Workforce Task Force COVID-19 Workplace Safety Guidance for Federal Contractors and subcontractors;
settings where any employee provided healthcare services or healthcare support services pursuant to the Healthcare ETS (§ 1910.502);
employers with fewer than 100 employees in total;
and, public employers in states without state plans.

The requirements of the Standard did not apply to employees who did not report to a workplace where other individuals were present, employees who work entirely remote, or employees who work exclusively outdoors.

Employers were given 30 days to come into compliance for most requirements and 60 days for others. Nonetheless, before deadlines approached on November 12, 2021 a nationwide stay was granted by the U.S. Court of Appeals for the Fifth Circuit (with jurisdiction over Louisiana, Mississippi, and Texas) prohibiting further effect and enforcement. See BST Holdings, LLC v OSHA, (CA 5, Nov. 6, 2021). The stay is in effect while the U.S. Court of Appeals for the Sixth Circuit decides the merits of the challenges. The Sixth Circuit was chosen at random to hear the consolidated cases through a lottery system under the procedures governing multi-district litigation. As the Sixth Circuit is predominately comprised of judges nominated by former Republican presidents, those who oppose the mandate foresee the selected jurisdiction will aid in a successful final invalidation. As of December 8, 2021, the US Senate voted 52 to 48 blocking the mandate from enforcement. The resolution still needs to pass through the House of Representatives and President Biden himself. Accordingly, as of November 12, 2021, OSHA has suspended all activities related to the implementation and enforcement of the Rule pending future developments in the litigation.

Moving Forward for Employers

As discussed above, the suspension of these mandates are due to temporary equitable remedies issued by federal district and appellate courts. There has yet to be a final determination on the validity of any Covid-19 vaccine mandate. The US Supreme Court is currently not posed to address this issue, and Congress has yet to do so either. Until vaccination requirements are set in stone, employers are in position to choose. Employers are free to encourage their staff to receive the vaccine, and employers can also wait until a final determination has been issued. If you are an employer with questions on how these mandates apply to your organization, or would like to establish your own Covid-19 vaccine policies and procedures, please connect with an attorney at Fraser Trebilcock. Our team is well-versed in these issues and ready to assist as more information becomes available.

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

Lauren D. Harrington is an associate attorney at Fraser Trebilcock focusing on Employment Law. You can reach her at 517.377.0874, or email her at lharrington@fraserlawfirm.com.

Financial Amnesty for Uninsured Michigan Drivers Ends January 1, 2022

In 2020, Governor Whitmer signed automotive no-fault reform legislation into law. One of the objectives of the new law was to get more drivers in Michigan insured given that Michigan has historically had high numbers of uninsured drivers on the roads, and the new law established an amnesty program meant to address this issue. According to reports, 20% of Michiganders and 60% of Detroiters were allegedly driving without insurance when the reforms took effect.

Beginning on July 2, 2020, uninsured drivers could obtain coverage without penalties. Generally, insurance companies will impose penalties and coverage restrictions for drivers with lapsed coverage. Under the law, during the amnesty period, insurers are not permitted to limit coverage, charge a reinstatement fee, or increase the premium for a driver solely due to a lapse in coverage.

That will soon change. Drivers who remain uninsured have until January 1, 2022 to take advantage of the financial amnesty by obtaining coverage. Thereafter, the limitations on insurance companies’ abilities to impose penalties on those with lapsed coverage will be lifted.

Emily M. Vanderlaan is a litigation associate at Fraser Trebilcock serving some of the largest and most sophisticated insurers in Michigan. From case evaluation, to settlement negotiations, to trial and appeal work, Emily has experience representing insurance companies in a wide range of cases in Michigan state courts. You can reach her at (517) 377.0882 or at evanderlaan@fraserlawfirm.com.

Why You May Need a Certificate of Trust When Selling Real Estate in Michigan

A last will and testament and a living trust are two of the most common estate planning methods. A living trust is attractive for many because it provides for an efficient and effective disposition of assets to loved ones, and unlike a will a living trust avoids probate court.

Once a trust is established it must be funded. Funding a trust is the process of transferring ownership of assets from the individual(s) who established the trust to the trustee of the trust, which involves titling assets in the name of the trustee. In almost all cases, the person who establishes and funds the trust also names himself or herself the trustee who has the right to manage all of the money, property, and assets that are placed inside of the living trust.

One asset that many people put in their trusts is real estate, be it a primary residence, vacant land, or otherwise. In Michigan, to the extent that a trustee decides to sell real estate that is part of a living trust, a certificate of trust will be required at or before the real estate closing.

What is a Certificate of Trust in Michigan?

Up until a few years ago, there were two different types of certificates of trust used in Michigan. One type was used for real estate transactions and the other was used mainly for financial transactions involving a trust.

Each type was governed by a different set of laws with quite different requirements. While each set of laws used the term “certificate of trust existence and authority,” one set was found in the statutes relating to Conveyances of Real Property and the other set was in the Michigan Trust Code. In 2018, as discussed below, Michigan law changed to harmonize the two statutes, simplifying our laws, reducing costs, errors, and confusion.

New legislation was signed into law in 2018 that, in essence, consolidated the two types of certificates of trust into one. Pursuant to the current law, a certificate of trust must include:

The name of the trust, the date of the trust, and the date of each operative trust instrument.
The name and address of each current trustee.
The powers of the trustee relating to the purposes for which the certificate of trust is offered.
The revocability or irrevocability of the trust and the identity of any person holding the power to revoke the trust.
The authority of co-trustees to sign on behalf of the trust or otherwise authenticate on behalf of the trust and whether all or less than all co-trustees are required to exercise the trustee powers.
A statement that the trust has not been revoked, modified or amended in any manner that would cause the representations included in the certificate of trust to be incorrect.

The certificate of trust may be signed or otherwise authenticated by the settlor, any trustee (including a successor trustee), or an attorney for the settlor or the trustee.

Do You Need a Certificate of Trust?

If you have a living trust, a certificate of trust will help the trustee open new financial accounts without needing to provide the entire trust. To the extent that real estate is in your trust, and you desire to sell it, the title company will require you to have a certificate of trust. Often, trustees are unaware of the need for a certificate of trust as part of the sale and are left scrambling in final days prior to the closing. If you are about to sell real estate titled in your name as trustee, you should obtain a certificate of trust early in the process to eliminate the stress and possible delays caused by not having the proper paperwork.

Even if you have a certificate of trust, it may need updating depending on when it was created. Because of the requirements imposed by the new statute, many certificates of trust that were created prior to 2018 are invalid. Additionally, since trustees and their addresses change from time to time, older certificates of trust are often out of date.

If you require assistance, the experienced trusts and estates and real estate lawyers at Fraser Trebilcock can provide the guidance you need. Please contact us.

Chair of Fraser Trebilcock’s Trusts and Estates Department, attorney Marlaine C. Teahan is a Fellow of the American College of Trust and Estate Counsel, and is the past Chair of the Probate and Estate Planning Section of the State Bar of Michigan. For help getting necessary legal authority for your loved one’s COVID-19 vaccine consent form, contact Marlaine at 517.290.0057 (cell) or mteahan@fraserlawfirm.com.

MRA Orders Largest Marijuana Product Recall in Michigan History

Michigan’s Marijuana Regulatory Agency (MRA) issued its largest marijuana recall ever on November 17 because of concerns over safety tests conducted by two companies.

Most products containing marijuana flower that had passed safety testing at Viridis Laboratories, LLC and Viridis North, LLC between August 10 and November 16 were recalled in a move that reportedly affected products sold at over 400 retail locations. The affected retailers were outlined in a 31-page Public Health and Safety Bulletin issued by the MRA. The recall did not impact inhalable marijuana concentrate products such as vape carts, live resin, distillate, and cannabis concentrate.

The value of the recalled marijuana products is estimated to be in the tens of millions of dollars and affected more than half the current stock for many retailers, according to multiple media reports.

The investigation is ongoing and additional findings may be released by the MRA at a later date.

The reasoning for the recall was “inaccurate and/or unreliable” microbial lab test results according to the MRA, although further details were not released by the agency. Microbial testing is required of cannabis products with the hope of eliminating products containing high levels of mold, bacteria, and yeast. Having a high level of those substances can lead to an increased risk of illness for users, including cases of E. coli and salmonella.

A large state recall mandated by the MRA also occurred in August 2020 after a marijuana flower failed safety and compliance testing for both mold and yeast.

What retailers and consumers should do with recalled products

Retailers are directed to properly dispose of any recalled products in adherence to MRA guidelines and along with processors must discontinue sales and transfers. Proof of product destruction must be sent to the MRA’s compliance email at MRA-Compliance@michigan.gov. Another option is for an affected product to be retested or sent back to the original licensee source.

Additionally, retailers must display recall notices in visible locations on their sales floors.

Customers who purchased the recalled product are expected to return those products to the retailer they purchased it from for disposal.

Product testing is at the heart of medical marijuana legislation

Proponents of a more heavily regulated medical marijuana market argue that a significant amount of marijuana sold in the state is done so illegally as part of an illicit market, which threatens the health and safety of consumers because there is no guarantee the products have been properly tested.

One of the outcomes of this debate is the recent introduction of bills in the Michigan Legislature that would limit the role and more heavily regulate caregivers in growing, storing, and distributing product.

Testing guidelines by the MRA are readily available online

The MRA has created and updated its Sampling and Testing Technical Guidance document for marijuana products. The basic tenet is that all sampling and analysis must be conducted by a laboratory licensed by the MRA and accredited to the International Organization for Standardization (ISO), ISO/IEC 17025:2017 by an International Laboratory Accreditation Cooperation (ILAC) recognized accreditation body or by an entity approved by the MRA.

Our team will continue to keep you updated on this recall and related news, and the progress of any legislation impacting the marijuana industry in Michigan. If you have any questions, please contact Paul Mallon or your Fraser Trebilcock attorney.

Paul C. Mallon, Jr. is Shareholder and Chair of Fraser Trebilcock’s cannabis law practice. You can reach him at pmallon@fraserlawfirm.com or (313) 965-9043.

October Updates: Legal and Regulatory Developments Impacting the Michigan Cannabis Industry

In a burgeoning industry such as legal cannabis in Michigan, one of the things you can count on is a frequently changing legal and regulatory landscape. There were several noteworthy developments in October that those competing in the industry should be aware of.

Michigan House Committee Advances Bills that Would Impose More Stringent Regulations on Medical Marijuana Caregivers

On October 26, 2021, the Michigan House of Representatives Regulatory Reform Committee approved a package of bills that would limit the amount of marijuana that caregivers could grow, store and distribute.

In a previous article, we outlined the key changes the new legislation would impose on caregivers, including the creation of a new specialty medical grower license that includes a variety of regulations, if signed into law. One change that was added to the bills before passage in the committee was adding language that allows unlicensed caregivers to serve up to five patients from their primary residence, but only allow them to grow 24 marijuana plants at their home. Beyond that, a specialty medical grower license would be required.

We will continue to keep you updated on this legislation as it moves to the full House for a vote.

Movements to Decriminalize Psychedelics Gain Momentum on a Local Level

Efforts to decriminalize the possession and use of naturally occurring psychedelics are gaining steam in Michigan.

Proposal E, which would decriminalize personal possession and therapeutic use of entheogenic plants by adults, is on the November 2nd ballot in Detroit.

In Grand Rapids, city commissioners recently voted to affirm a resolution that declares “support for state and federal legislative efforts that would decriminalize entheogenic plants and fungi.”

In Ann Arbor, the city council passed a resolution to make enforcement of laws prohibiting certain psychedelics a low priority.

There are also efforts to decriminalize psychedelics taking place at the state level. Senate Bill 631 has been introduced which would decriminalize entheogenic plants and fungi across Michigan.

Key Congressional House Committee Approved Bill to Federally Legalize Marijuana

While it happened in September (September 30), it’s worth noting in this October update that the U.S. House of Representatives Judiciary Committee approved the Marijuana Opportunity, Reinvestment and Expungement Act, which would federally legalize marijuana and promote social equity.

The bill would:

Remove marijuana from the Controlled Substances Act (CSA),
Enable people with cannabis convictions to have their records expunged
Create a federal tax on marijuana to support community reinvestment and other programs

The passage of the bill came one week after the full House of Representatives voted in favor of a defense spending bill that includes an amendment that would protect banks that serve cannabis businesses in states where they legally operate from being penalized by federal regulators.

We will continue to keep you apprised of further legal and regulatory developments. In the meantime, if you have any questions or require assistance, please contact Paul Mallon or your Fraser Trebilcock attorney.

Paul C. Mallon, Jr. is Shareholder and Chair of Fraser Trebilcock’s cannabis law practice. You can reach him at pmallon@fraserlawfirm.com or (313) 965-9043.

IRS Announces 2022 Increase for Health FSAs

The IRS has just released its 2022 annual inflation adjustments, in which it announced that the Code section 125 dollar limitation on voluntary employee salary reductions to health flexible spending arrangements (health FSAs) is increasing to $2,850.

The IRS annual inflation adjustments for more than 60 tax provisions, including health FSAs, qualified transportation fringe benefits, adoption assistance, medical savings accounts, and qualified small employer HRAs, can be found in Rev. Proc. 2021-45.

With regard to the health FSA increase for 2022, Rev. Proc. 2021-45 reiterates that cafeteria plans can be written to allow carryovers of unused health FSA amounts up to a maximum of $570. However, by way of temporary relief and if the cafeteria plan was amended, leftover amounts in the dependent care FSA and/or the health FSA can be carried over from the 2021 plan year to the 2022 plan year. This is allowed under Notice 2021-15 and was previously described in our March 8, 2021 Client Alert.

Although open enrollment season is about to be in full swing for most, employers should ensure that their salary reduction agreements, plan documents, and related enrollment materials are updated to reflect any changes in benefits for the upcoming plan year.

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

Brian T. Gallagher is an attorney at Fraser Trebilcock specializing in ERISA, Employee Benefits, and Deferred and Executive Compensation. He can be reached at (517) 377-0886 or bgallagher@fraserlawfirm.com.

Fewer Vehicles on the Road, Yet More Fatalities in 2020

While the early months of the pandemic saw a significant decrease of vehicles on the road, traffic fatalities in Michigan and nationally increased during 2020.

Data from the U.S. Department of Transportation’s National Highway Traffic Safety Administration and the Michigan Office of Highway Safety Planning indicate that 2020 saw the largest number of auto accident fatalities nationally since 2007.

In Michigan, 1,083 people died in car crashes, an approximately 10 percent rise relative to 2019. Nationally, an estimated 38,860 people died in car crashes in 2020—a 7.2 percent increase compared to 2019.

According to data from the Governors Highway Safety Association, pedestrian fatalities involving vehicles also rose to 6,721 nationally in 2020, a 4.8 percent increase from 2019. In Michigan, pedestrian accidents increased 17 percent in 2020 relative to 2019.

The increase in auto accident and pedestrian deaths occurred despite the fact that vehicle miles traveled in the U.S. decreased by 13.2 percent in 2020, according to the National Highway Traffic Safety Administration (NHTSA). In addition, traffic accidents were down. In Michigan, there were 245,432 accidents in 2020 compared to 314,377 in 2019.

With more Americans working from home and spending less time driving on the roads, why did auto accident fatalities surge higher?

There is not a single definitive reason for this dichotomy, although NHTSA data shows that occupant ejection rose by 20 percent and speeding related crashes increased by 11 percent.

Alcohol-related crashes also increased (fatal crashes involving alcohol were up 9 percent in 2020 compared to 2019 according to NHTSA) and several studies show that alcohol consumption broadly increased with the pandemic in 2020. Pandemics such as COVID-19 can cause many medical, psychological, and sociological problems, including increased alcohol consumption and related harms from such consumption

Additional evidence that more careless drivers may have been on the road in 2020 is the fact that there was a 4 percent increase in fatal crashes among those properly wearing seat belts, compared to a 16 percent increase in those who did not, according to Michigan Office of Highway Safety Planning data. NHTSA figures also revealed that the number of traffic tickets for speeding issued by law enforcement agencies increased in most states, and states such as Iowa and Ohio saw 101 percent and 61 percent increases, respectively, in the number of drivers ticketed for driving over 100 miles per hour.

In June, the Michigan State Police announced a partnership with five other states for a regional traffic safety campaign known as “Great Lakes, High Stakes.” It announced that the campaign was being undertaken in light of the fact that “law enforcement agencies across the nation have reported an alarming rise in speeding and fatal crashes” since the COVID-19 pandemic began.

Priorities for Staying Safe on the Roads

The biggest tragedy resulting from auto accidents is the loss of life, and the medical challenges that serious auto accidents can cause. This also leads to a financial burden on our society where devastating injuries can adversely affect an individual’s pocketbook and ability to work.

Eliminating distracted driving is one of the most effective ways to reduce vehicle accidents and increase driver and pedestrian safety. In 2019, distracted driving crashes killed 3,142 people in the United States, according to the NHTSA.

There are currently a trio of bills in Michigan—House Bills 4277, 4278 and 4279—pending before the Michigan House of Representatives, that seek to impose penalties on drivers for engaging in distracted driving pertaining to cell phone and other mobile device usage. They would ban the ability to use handheld devices beyond just texting and driving and include more specific types of device usage, including social media, video streaming and more.

To help reduce distracted driving, consider:

Placing your cell phone out of sight to prevent unsafe usage or connect it to your vehicle’s connected car system for hands-free usage only.
Programming your destination using navigation before starting to drive.
Pulling over if you must call or text.
Asking passengers for help. Passengers themselves can warn a driver about unsafe distracted driving
Activating the Do Not Disturb feature on devices.

Another concern in the months ahead is the danger that driving on Michigan’s wintry roads can bring. Here is a short list of winter driving tips from AAA Michigan, which are particularly important for inexperienced drivers:

Accelerate and decelerate slowly on icy roads.
Maintain safe distance with other cars (approximately six seconds for braking).
Remember that it’s not easy to bring a car to a complete stop on wintry roads.
Do not try to accelerate up hills, which can cause wheels to spin and lose traction.

And don’t forget that it’s deer season in Michigan. During the next couple of months there will be thousands of deer/car accidents in both rural and suburban Michigan. In fact, statistics suggest that there will be over 50,000 deer/car accidents during the 2020 calendar year. The Michigan State Police report that 80% of these accidents will occur between dawn and dusk, but they are not limited to rural areas. Indeed, for example in the Lansing area alone, Meridian Township had 129 car/deer accidents, and Delta Township had 128 deer/car accidents in 2018. Simply stated, if you drive enough, there is an excellent chance that at some point in time you will be involved in a car/deer accident. For tips on how to drive safely during deer season, and what to do if you have an unfortunate encounter with a deer, check out our previous article on the topic: “Fall in Michigan: Safely Handling Deer/Automobile Accidents.”

By driving defensively and safely on the roads, we can all contribute to lowering the state’s auto fatality rate.

Fraser Trebilcock Shareholder Gary C. Rogers has firsthand experience with car/deer accidents, having been involved in four himself; Gary is recognized as one of the top civil defense attorneys in the area of automobile related cases, and he has co-written Michigan No-Fault Law-The Insurers’ Perspective, a handbook for handling claims under Michigan’s No-Fault Automobile legislation. Gary can be reached at grogers@fraserlawfirm.com or (517) 377-0828.

Recent NLRB Memorandum Argues that Certain College and University Student-Athletes Qualify as Employees and Should be Afforded Statutory Protections

The debate on whether college or university athletes should be considered as employees isn’t a new one, especially in light of coaches like Alabama’s Nick Saban receiving almost a $10 million salary. In fact, college coaches dominate lists of highest paid public employees in most states.

The conversation on the disparity between coach pay, revenue generated by the NCAA and higher education institutions from sports, and student-athletes seeking compensation for their participation is evolving. In July 2021, the NCAA adopted a new name, image and likeness (NIL) policy, by which student-athletes can be compensated for the use of their NIL. In addition, a recent memorandum by the National Labor Relations Board (NLRB) general counsel redefined the term “employee” as it applies to student-athletes. In the September 2021 nine-page memorandum, general counsel Jennifer A. Abruzzo takes the position that student-athletes are misclassified. The memorandum opens the door for students to be considered employees of a private university or college and have the option to unionize and participate in collective bargaining under the NLRB.

The purpose of the memorandum is to put private universities and colleges on notice of NLRB’s pro-labor policy. NLRB doesn’t have jurisdiction over wages and compensation and cannot compel colleges and universities to pay student-athletes. The memorandum is not considered binding precedent, but Abruzzo’s reasoning indicates NLRB’s position should the right case appear before the board.

The Reasoning Behind the Memorandum

Abruzzo’s reasoning focuses on several key points, including misclassifying the term “student-athlete,” redefining the term “employee” in the context of an athlete, and the increasing social and racial justice activism occurring on campuses.

First, the memo argues colleges’ and universities’ use of the term “student-athlete” is an inherent misclassification. This label prevents the athlete at a college or university from pursuing protection under federal law. Instead, Abruzzo calls on institutions to classify athletes as “players at academic institutions.”

In her second point, Abruzzo defines the term employee in the context of an athlete playing a sport at a college or university. “Players at Academic Institutions perform services for institutions in return for compensation and are subject to their control. Thus, the broad language of Section 2(3) of the Act, the policies underlying the NLRA, Board law, and the common law fully support the conclusion that certain Players at Academic Institutions are statutory employees, who have the right to act collectively to improve their terms and conditions of employment,” Abruzza asserts in her memorandum.

For example, a basketball player who plays on behalf of his or her private university and the NCAA performs a service by playing on the team and receives compensation in the form of a scholarship. The coach and staff dictate practices and general working conditions for the athlete.

Lastly, the memorandum also addresses the recent activism by students on campus. In the last few years, there has been an increase in participation in advocating for social and racial justice issues. She specifically highlights the Black Lives Matter movement and states that athletes who participate in such activism to improve working conditions should be protected from retaliation.

Precedent that supports NLRB’s recent memorandum

Abruzzo’s current memorandum essentially picks up where a 2017 memorandum left off. The NLRB, in GC 17-01, stated that Division 1 scholarship football players who competed in the NCAA at private colleges are employees, but declined to intervene. The memo was rescinded by the Trump administration, and the current Abruzzo memorandum reinstates the point that the football players at issue satisfy the definition of employee under Section 2(3) and the common-law agency test, in which an employee is “a person who performs services for another and is subject to the other’s control or right to control.”

In the June 2021 Supreme Court decision in NCAA vs. Alston, the Court unanimously upheld that a cap on education-related benefits for athletes violated antitrust laws. In his concurring opinion, Justice Brett Kavanaugh stated that college athletes “collectively generate billions of dollars in revenues for colleges every year. Those enormous sums of money flow to seemingly everyone except the student athletes. College presidents, athletic directors, coaches, conference commissioners, and NCAA executives take in six- and seven-figure salaries. Colleges build lavish new facilities. But the student athletes who generate the revenues, many of whom are African American and from lower-income backgrounds, end up with little or nothing.” Given this context, Kavanaugh suggests collective bargaining could be a solution to provide college athletes a fairer share of the revenue their institutions generate. This decision also indicates that the court is moving toward legislation that benefits the athlete playing for a private institution or college.

In addition, Abruzzo notes that players at academic institutions can now be compensated for the use of their NIL, similar to professional athletes.

What are the practical implications of the memorandum for public universities and colleges?

As it stands, the NLRB memorandum impacts only private universities and doesn’t apply to athletes in public universities. For example, in Michigan, where there isn’t a Division 1 private school, the public universities are subject to the jurisdiction of the MIchigan Employment Relations Commission rather than the NLRB.

There is a potential caveat since Abruzzo indicated that she might pursue a joint employer theory of liability to apply to public universities as well. She concedes that the current memorandum puts athletes at public universities out of reach, but if (potentially) an NLRB-covered entity is involved in the conditions or terms of employment, the joint employer liability theory might extend to these institutions. The current memorandum certainly opens the door to that possibility. Abruzzo explicitly states, “I will consider pursuing charges against an athletic conference or association even if some member schools are state institutions.”

For those institutions that fall within the scope of the memorandum, there will be more of an impetus to form unions. It is unlikely this development will occur immediately, but Abruzzo’s memorandum clearly sets up the possibility.

The underpinnings of the memorandum certainly challenge the current model employed by private universities and colleges as well as NCAA policy on compensation. If one college or basketball program started paying their athletes, what impact would this have on competition overall? Would the public universities feel the need to follow suit?

The NLRB position seems to embrace a pro-labor stance. The landscape of the student-athlete appears to be evolving, and clearly the colleges and universities – both private and public – need to be attuned to these changes.

If you have any questions, please contact Ryan Kauffman.

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

Corporate Transparency Act Imposes Significant New Reporting Requirements on Businesses

Congress recently passed the Corporate Transparency Act (“CTA”), which requires certain business entities to report the “beneficial ownership” of an entity to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FINCEN”).

The CTA is intended to deter activity such as money laundering, financing terrorism, and tax fraud, among other things. Failure to disclose the necessary information may subject businesses to significant civil and criminal penalties.

FINCEN is charged with developing regulations to implement the CTA by January 1, 2022. It released an advance notice of proposed rulemaking on April 5, 2021.

What Businesses Does the CTA Apply to?

The CTA applies to a “reporting company,” which under the statute includes a corporation, limited liability company, or other “similar entity” formed by filing with a secretary of state (or similar office under the law of a state) or formed under the law of a foreign country and registered to do business in the United States. We anticipate that the regulations developed by FINCEN will further clarify what “similar entity” means.

Several types of entities are exempt from reporting requirements, including government entities, as well as certain financial institutions, certain nonprofits, and publicly traded companies. Entities that (i) employ 20 or more full-time employees in the United States; (ii) filed a federal income tax return showing more than $5 million in gross receipts or sales; and (iii) have an operating presence at a physical office within the United States are also exempt.

An “exempt grandfathered entity” is one that: (i) was formed over one year prior to January 1, 2021; (ii) has not engaged in active business; (iii) is not owned, directly or indirectly, by a foreign person; (iv) has not, in the preceding 12-month period, experienced a change in ownership or sent or received funds in an amount greater than $1,000; and (v) does not otherwise hold any type of assets.

Who is a Beneficial Owner or Applicant?

Under the CTA, a “beneficial owner” is an individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, (i) exercises substantial control over a corporation or limited liability company; (ii) owns 25% or more of the equity interests of a corporation or limited liability company; or (iii) receives substantial economic benefits from the assets of a corporation or limited liability company.

A reporting company must submit a report to FINCEN that discloses the full legal name, date of birth, address, and a unique identifying number from an acceptable identification document or a FINCEN identifier of any beneficial owner.

Reporting companies must also disclose similar information for any “applicant.” An “applicant” includes an individual who: (i) files an application to form a corporation, LLC, or other similar entity under state or Indian Tribe law; or (ii) registers or files an application to register a corporation, LLC, or other similar entity formed under the laws of a foreign country to do business in the United States by filing a document with the secretary of state or similar office under state or Indian Tribe law.

When Must Reporting Occur?

A reporting company that is formed or registered after the effective date of the regulations must submit a report to FINCEN with the beneficial ownership information related to the reporting company at the time it is formed or registered. A reporting company that was formed or registered before the effective date of the regulations must submit a report to FinCEN no later than two years after the effective date of the regulations. To the extent that there are changes in reported beneficial ownership information, a reporting company must submit an updated report to FINCEN by no later than one year after the date of the change.

What are the Penalties for Failing to Comply?

It is unlawful for any person to willfully provide, or attempt to provide, false or fraudulent beneficial ownership information to FINCEN, or willfully fail to report complete or updated beneficial ownership information to FINCEN. Violations are subject to civil penalties of not more than $500 for each day that the violation continues, and criminal penalties of imprisonment of up to two years and fines of up to $10,000.

There is a safe harbor rule that protects individuals from liability if they voluntarily follow procedures and submit a report with correct information within 90 days. The safe harbor is inapplicable to individuals who submit a report with knowledge that it contains incorrect information in an effort to evade reporting requirements.

We Can Help

The foregoing is a summary of some of the important provisions of the CTA. The statute is lengthy and complex and there is much more to know. Businesses should consult with their attorney to understand their obligations under the CTA. For assistance, please contact Ed Castellani or your Fraser Trebilcock attorney.

Edward J. Castellani is an attorney and CPA who represents clients involved with alcohol beverages as a manufacturer, wholesaler, or retailer. He leads the firm’s Business & Tax practice group, and may be contacted at ecast@fraserlawfirm.com or 517-377-0845.