Joint Statement by Federal Agencies Marks Heightened Enforcement Attention on Potential Bias in AI Systems

On April 25, 2023, the Consumer Financial Protection Bureau (CFPB), Department of Justice (DOJ) Civil Rights Division, the Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC) issued a joint statement affirming that they will be working collaboratively to enforce existing laws and regulations as applied to potential discrimination and bias in artificial intelligence (AI) systems. Companies that use AI and other automated systems should prepare for greater scrutiny from these agencies.

Congressional Action on AI Takes Major Step Forward

Congressional leaders are intensifying efforts to legislate and regulate artificial intelligence (AI) technology. On April 13, Senate Majority Leader Chuck Schumer (D-NY) publicly announced a framework on artificial intelligence (AI) regulation. The announcement came in response to the Chinese Communist Party’s release of their own AI regulatory framework. Schumer revealed his framework as part of the United States’ duty to “lead and shape the rules governing such a transformative technology” rather than allow China to “write the rules of the road.”

U.S. Patent Trial and Appeal Board (PTAB) Considers Sweeping Reform to Address Discretionary Denials and Petitions Filed by Certain For-Profit Entities

On April 21, 2023, the U.S. Patent and Trademarks Office (USPTO) published an advance notice of proposed rulemaking seeking comments on the proposed changes addressing the U.S. Patent Trial and Appeal Board’s (PTAB) authority under 35 U.S.C. §§ 314(a) and 325(d) to exercise its discretion in denying petitions for inter partes review (IPR) and post-grant review (PGR). The USPTO is specifically seeking public input on a number of changes under consideration for future rule changes. Those who regularly make use of the IPR and post-grant proceedings before the PTAB will want to carefully review the changes under consideration and provide comments by June 20, 2023, if they want to affect the USPTO’s final rule changes.

No Cutting the (Priority) Line!: Incidental Beneficiaries to Assumed Contracts and Leases Cannot Assert Cure Claims Against Debtors

The Second Circuit held that a creditor seeking to assert a cure claim must have a contractual right to payment under the assumed contract or lease, and accordingly, a creditor with only a tangential or incidental interest in a contract or lease cannot assert a cure claim. (See In re George Washington Bridge Bus Station Development Venture LLC, No. 21-2050-bk, 2023 WL 2847175, 2d Cir. Apr. 10, 2023.) To allow otherwise would subvert Congress’s intent in creating a priority scheme for bankruptcy cases and contradict the language of section 365 of the U.S. Bankruptcy Code, because parties with no legal rights would get paid before creditors with legal rights to payment. The Second Circuit left unanswered whether intended beneficiaries can assert cure claims, but hinted that intended beneficiaries should be entitled to the protections afforded to counterparties to assumed contracts because they have a right to performance.

FCC Adopts International Section 214 Authorization Order and Notice of Proposed Rulemaking to Address National Security Concerns Posed by Foreign Ownership

The Federal Communications Commission (FCC), on April 25, 2023, released an Order and Notice of Proposed Rulemaking (NPRM) relating to international Section 214 authorizations, in response to recent concerns regarding national security, law enforcement and foreign ownership of telecommunications services. International Section 214 authorizations are issued to telecommunications providers that seek to offer international services originating or terminating in the United States.

Los Angeles Initiative Seeks to Impose $450,000 Cap on Annual Compensation of Executives in Health Care Facilities

An initiative submitted by the Service Employees International Union United Healthcare Workers West (SEIU-UHW) seeks to limit the annual compensation of health care executives in the city of Los Angeles to $450,000 per year. Entitled the “Limit Excessive Healthcare Executive Compensation Ordinance,” the initiative argues that health care executives should not receive higher compensation than the U.S. President, whose compensation is set by federal statute in 3 U.S.C. § 102 (Compensation of the President). Employing a similar legislative strategy, the initiative proposes a cap on the compensation of health care administrative professionals with executive, managerial or administrative duties, i.e., CEOs, CFOs, executive vice presidents and similar administrators, at privately owned health care facilities located in the city of Los Angeles. Covered health care facilities would include licensed general acute care hospitals, acute psychiatric hospitals, skilled nursing facilities and even residential care facilities for the elderly. Notably, medical professionals that provide medical services, research, patient care or other non-administrative services are excluded from the compensation cap.

Follow the Money: AI Winners in President Biden’s FY 2024 Budget Request

The artificial intelligence (AI) revolution is rapidly transforming industries and reshaping our world as we know it. With advances in machine learning, natural language processing and computer vision, AI has moved beyond the realm of science fiction and become a driving force of innovation and productivity. This disruptive technology is creating new opportunities, challenges and implications for society at large. The Biden Administration is taking notice—here is a look at new AI programs and funding proposed in President Biden’s fiscal year 2024 budget proposal released on March 9, 2023.

“If You Don’t Make It There, You Can’t Make It Anywhere:” New York’s Zero Manufacturing Rate Requires New York Property

A New York State Division of Tax Appeals (DTA) administrative law judge (ALJ) determined that Raytheon Company and affiliates (Raytheon) did not qualify for New York’s zero percent tax rate for manufacturers or the reduced tax rate for qualified emerging technology companies (QETCs). Raytheon’s primary contention in the litigation is that the zero percent manufacturing rate unconstitutionally discriminates against manufacturing activity outside New York. Specifically, Raytheon argued that the law as applied to its facts violated the U.S. Constitution, but the ALJ determined that Raytheon’s argument constituted a facial challenge to the statute that falls outside the DTA’s jurisdiction. Because the New York legislature included a poison pill in the session law that enacted the zero percent rate, the constitutional challenge could eliminate the zero percent manufacturing rate for all taxpayers.

Human Rights Due Diligence—ESG Impact on M&A Transactions

Over the past several years, environmental, social and governance (ESG) considerations have gained global importance in the context of mergers and acquisitions (M&A). Corporations, customers, regulators and investors are increasingly demanding the integration of ESG factors into the decision-making processes of businesses with regards to M&A in an effort to enhance business opportunities, protect reputations and mitigate risks. In today’s globalized economy, many companies rely on a complex web of supply chains that span multiple countries. Beginning with the exposure of China’s crimes against Uyghurs and other Muslim ethnic groups in Xinjiang and compounded by Russia’s recent invasion of Ukraine, there has been a renewed push for global brands to take their ESG efforts more seriously. As a result, companies and potential buyers are more sensitive to the risk of doing business in countries like China where labor costs are much lower than in other developed countries but where there is simultaneously a lack of respect for human rights and humane labor conditions.

Concerns Over PFAS Contribute to New Federal Legislation Expanding FDA’s Authority Over Cosmetics

On December 29, 2022, President Biden signed the Modernization of Cosmetics Regulation Act of 2022 (MoCRA) into law. (See Consolidated Appropriations Act, 2023, Pub. L. No: 117-328, § 3501-06.) MoCRA substantially expands the authority of the Food and Drug Administration (FDA) to promulgate new regulations over cosmetics and initiate enforcement against manufacturers and distributors of cosmetic products that present health risks. Most MoCRA provisions, including those dealing with facility registration and product listing, take effect on December 29, 2023, and existing facilities will have to register and comply with its product listing requirements as of this date.

Maine and Massachusetts Consider PFAS Legislation

Maine Regulators Propose Rules Providing Guidance on Newly Enacted Ban on PFAS-Containing Products
The Maine Department of Environmental Protection has proposed a new rule intended to establish, in greater detail, the procedures necessary for compliance with Public Law c. 477, entitled “An Act To Stop Perfluoroalkyl and Polyfluoroalkyl Substances Pollution.” As discussed in a previous post, this law, which went into effect January 1, 2023, imposes reporting requirements for consumer products with intentionally added per- and polyfluoroalkyl substances (PFAS) and phases out products containing PFAS beginning with carpets, rugs and fabric treatments. The proposed regulation largely echoes the language of the statute itself but does provide new definitions material to the statute’s “currently unavailable use” exemption and elaborates on the required content of the statutorily prescribed notices regarding PFAS-containing products.

China Issues Proposed Regulations on Generative AI

With OpenAI’s introduction of ChatGPT into the market, Generative Artificial Intelligence (Generative AI) has dominated the headlines across the globe. Many technology companies have followed suit and released their Generative AI tools and services. Generative AI is widely expected to empower and change business models across industries and has immediately improved efficiency in many sectors. Pillsbury has been closely monitoring and advising our clients on these fast-changing AI technologies. (See our website at Artificial Intelligence (AI) Law | Pillsbury Law.)

The Nuclear Regulatory Commission Unanimously Votes to Separate Fusion Energy Regulation from Nuclear Fission

On April 14, 2023, in a unanimous vote, the Commissioners of the U.S. NRC directed that fusion energy devices will be regulated under the agency’s existing rules for use of byproduct materials in 10 C.F.R. Part 30, with only a limited-scope rulemaking. This approach separates the regulatory framework for fusion from the utilization facility framework applicable to nuclear fission energy and will allow the NRC to tailor its regulatory approach to the emerging fusion energy sector.

Consumer Financial Protection Bureau Finalizes Small Business Lending Data Rule

On March 30, 2023, the Consumer Financial Protection Bureau (CFPB) issued a final rule that requires small business lenders to collect detailed demographic and financial data about applications and originations, and annually report that data to the CFPB. Currently, lenders typically only collect demographic data (such as the race or ethnicity of an applicant) with residential mortgage applications because federal law has significantly restricted the collection of such data in other circumstances. The new rule will therefore require small business lenders to make substantial operational changes. Lenders will also need to assess and revise their compliance programs to manage both the new data collection and reporting requirements, as well as the increased fair lending scrutiny that is likely to result from regulators’ access to this detailed data.

Washington Court Reaffirms Tribal Sovereignty in Sports Betting Case, But Differences Among Courts Begin to Emerge

Over recent decades, tribal gaming has developed into a $32 billion industry, providing economic stability and tribal government funding for sovereign nation building. More recently, the U.S. Supreme Court’s decision (in 2018) to overturn the Professional and Amateur Sports Protection Act has sparked renegotiations of tribal-state gaming compacts across the country to allow tribes to enter the online sports betting arena.

Department of Energy Announces Strategy for Offshore Wind Deployment

On Thursday March 29, 2023, the Department of Energy (DOE) announced its offshore wind strategy to advance the deployment of offshore wind energy in the United States. The strategy reflects the DOE’s comprehensive approach for accelerating a carbon-free electricity sector by 2035 and a net-zero economy by 2050.

Canadian Government Moves Forward on Major Clean Hydrogen Investment Tax Credit

On Tuesday, March 28, Canadian Prime Minister Justin Trudeau and Deputy Prime Minister Chrystia Freeland presented Budget 2023: A Made-in-Canada Plan, the 2023 – 2024 Canadian federal budget proposal. The proposed budget includes several clean energy programs, including a $17.7 billion CAD ($12.6 billion USD) Clean Hydrogen Investment Tax Credit (ITC).

Court of Appeals Finds That Insurers May Not Participate in Bankruptcy Negotiations by Invoking an Insured’s Duty to Cooperate

In Truck Ins. Exch. v. Kaiser Gypsum Co. (In re Kaiser Gypsum Co.), 60 F.4th 73 (4th Cir. 2023), the U.S. Court of Appeals for the Fourth Circuit found that an insured’s duty to cooperate under its general liability insurance policies, which require the insured to assist and cooperate with litigation-related defense, does not give its insurer the right to negotiate the terms of a chapter 11 plan in the insured’s asbestos bankruptcy because the duty to cooperate is limited to “traditional litigation activities.” The Fourth Circuit also found that the insurer was not a “party in interest” and lacked standing to object to the plan because, by leaving the insurer’s rights and obligations under the policy intact, the plan was “insurance neutral.”

Nuclear Energy Agency Announces Publication of the Small Modular Reactor Dashboard

On March 13, 2023, the Organization for Economic Co-operation and Development (OECD) Nuclear Energy Agency (NEA) announced publication of the Small Modular Reactor Dashboard, a compilation of verified publicly available information on progress-to-date towards SMR first-of-a-kind (FOAK) deployment and commercialization. This information aims to help the public understand the pace of progress to commercial deployment of these technologies as governments consider available paths to achieve net zero by 2050.

AI Warning: ChatGPT Blocked for Data Laws Breach

Wherever you are located, you need to be mindful of various laws around the world that may apply to your development and use of AI. Recent laws proposed in Europe (e.g., the AI Act) have attracted a lot of attention, but it can often be a mistake to overlook other laws that can apply and are currently in force, such as the General Data Protection Regulation (GDPR). The Italian data regulator’s enforcement action against OpenAI and ChatGPT this past week reminded everyone that laws such as GDPR do indeed impact the creation, development and use of AI.

Application Windows Opening for New Federal Funding

On August 16, 2022, the passage of the Inflation Reduction Act (IRA) marked the establishment of a trifecta of bipartisan legislation aimed at improving U.S. economic competitiveness through innovation and domestic industrial productivity. In total, the IRA, the CHIPS and Science Act (CHIPS) and the Infrastructure Investment and Jobs Act (IIJA) provide about $2 trillion in federal funding, offering businesses and organizations a rare opportunity to apply for federal grants or take advantage of other federal incentive benefits. Many application windows for grants, loans and other incentives have opened since the passage of these landmark bills, with additional application periods opening across the first three quarters of 2023. Businesses should be assessing how available programs align with objectives and growth plans and preparing to meet critical eligibility and compliance obligations to obtain benefits. Though more details are still to come, below are considerations for companies seeking to benefit from new federal spending and incentive programs to support infrastructure projects, technology innovation, semiconductor manufacturing, and climate protection and clean energy initiatives.

Commerce Releases New Proposed Rule Governing Restrictions on Chinese Investments by CHIPS Act Applicants

On March 21, 2023, the Department of Commerce (Commerce) released a Notice of Proposed Rulemaking (NPRM) imposing guardrails preventing the “improper use of funds” made available under the CHIPS Act of 2022, which creates a private sector incentive program to boost semiconductor manufacturing in the United States. The guardrails are designed to ensure that technology and innovation spurred by the CHIPS Act is targeted towards domestic investment in semiconductor facilities and equipment, exclusively, and does not benefit adversarial countries, principally China.

Cross-Border Data Transfer Mechanisms and Requirements in China

In recent years, alongside the rapid development of the digital economy and the concomitant increase in data generation, collection, processing and monitoring in the People’s Republic of China (PRC or China), the Chinese government has accelerated efforts to establish a robust legal framework for data protection. Over the past five years, China has promulgated several major data protection laws, including the Cybersecurity Law (CSL) (effective from June 1, 2017), the Personal Information Protection Law (PIPL) (effective from November 1, 2021) and the Data Security Law (DSL) (effective from September 1, 2021), together with a series of implementation regulations and administrative guidance. These laws and regulations, particularly with respect to requirements on the processing of personal information and cross-border data transfer, pose significant challenges and compliance obligations for multinational companies when conducting business in and with China. This article outlines our observations of the mechanisms and practice of cross-border transfer of personal information under China’s current legal framework.

Don’t Let Bank Uncertainty Delay Payroll: Considerations for Employers

With bank uncertainty making headlines, we answer employers’ most frequently asked questions about the consequences of payroll delays, strategies for mitigating risk and more.

EPA Proposes Stringent Regulation of PFAS in Drinking Water

On March 14, 2023, the EPA proposed a National Primary Drinking Water Regulation under the Safe Drinking Water Act to establish Maximum Contaminant Levels (MCLs) for six per- and polyfluoroalkyl substances (PFAS).

Department of Energy Announces $6 Billion Funding Opportunity for Industrial Decarbonization and Emissions Reduction Projects

On March 8, 2023, the Department of Energy (DOE) announced approximately $6 billion in funding to accelerate decarbonization projects in energy intensive industries and provide American manufacturers a competitive advantage. Funded by the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA), the Industrial Demonstrations Program will focus on revolutionizing energy intensive industrial processes with the highest emissions, where decarbonization technologies will have the greatest impact. Industries that represent the greatest opportunities include iron, steel, steel mill products, aluminum, cement, concrete, glass, pulp, paper, industrial ceramics and chemical products.

New Biden Administration Cyber Strategy Proposes Dramatic Shift in Order to Hold Software Developers Liable for “Insecure” Software

On March 2, 2023, the Biden administration released its National Cyber Security ("Strategy") to create a more defensible, resilient and value-aligned digital ecosystem which includes, among other priorities, the administration’s efforts to make software firms liable for system insecurities.

New UK GDPR Reform Bill Published

Businesses already face an uphill struggle keeping pace with fast changing and numerous new data laws being passed in multiple U.S. states as well as countries around the world. The one silver lining has been the emergence of a recent trend of basing, to some extent, many of these new laws on the GDPR. This means that one way forward has been to look to build upon effort already expended on creating and administering GDPR compliance frameworks, albeit with updating needed for relevant recent changes or enforcement. The UK government changes therefore may well leave some feeling nervous. The changes to the UK GDPR will have to be scrutinized after the post-parliamentary readings to assess final impact of the Data Protection & Digital Information (No.2) Bill (DPDI2) (e.g., regarding fines, AI, cookies, transfers, legitimate interests, records of processing activities (ROPA), data protection officers (DPOs), Data Protection Impact Assessments (DPIAs), etc.). We will also have to see how the EU responds, as any removal of adequacy status will add further complications to EU-UK data transfers. Any business with UK operations, customers, suppliers or partners will need to freshly review and consider changes to its policies, documents and procedures to account for DPDI2.

China Publishes Measures on Standard Contract for Cross-border Transfer of Personal Information

The Cyberspace Administration of China (CAC) issued the final version of the Measures on the Standard Contract for the Cross-border Transfer of Personal Information (Standard Contract Measures) on February 24, 2023, which includes a template standard contract (Standard Contract). The Measures will take effect on June 1, 2023, but set forth a six-month grace period until December 1, 2023, to provide companies with time to take actions for compliance.

Seeking Certainty: Redefining “Waters of the United States”

Making good on a promise to redefine the Clean Water Act (CWA) term, “Waters of the United States” or WOTUS, on January 18, 2023, the latest revised definition of “Waters of the United States” was published in the Federal Register by the U.S. Army Corps of Engineers (ACOE) and the Environmental Protection Agency (EPA) at 86 FR 3004. The effective date of this rule will be March 20, 2023. Remarkably, this action marks the fourth time in eight years that these agencies have attempted to craft a workable definition of WOTUS and thereby affect far-ranging impacts on everything from infrastructure and agriculture to private land use. While the agencies indicate that the newly redefined WOTUS is, in many ways, a return to the longstanding regulatory regime, there are several notable changes.

Department of Energy Opens Second Award Cycle for Civil Nuclear Credit Program

On March 2, 2023, the Department of Energy (DOE) announced the opening of the second round awards cycle of the Civil Nuclear Credit (CNC) Program and released application guidance. The application guidance describes the timelines, deliverables and supporting information needed to apply for CNC certification and to submit sealed bids to receive allocated credits.

New DOJ Clawback Policy Brings Compensation and Employment Questions Front and Center for Companies

On March 2, 2023, Deputy Attorney General (DAG) Lisa Monaco announced a new Criminal Division policy for Department of Justice (DOJ) prosecutors to consider the implementation of compensation clawback policies as an important factor in corporate criminal resolutions. This policy is aimed at incentivizing both public and private companies to incorporate clawback clauses into contracts and compensation policies for employees, officers and directors.

New UK GDPR Proposals Incoming

Businesses already face an uphill struggle keeping pace with fast changing and multiple new data laws being passed in multiple U.S. states as well as numerous countries around the world. The one silver lining has been the emergence of a recent trend of basing, to some extent, many of these new laws on the GDPR. This means that one way forward has been to look to build upon effort already expended on creating and administering GDPR compliance frameworks, albeit with updating needed for relevant recent changes or enforcement. The current efforts of the UK government therefore may well leave some feeling nervous. The details of any proposed changes to the UK GDPR will have to be scrutinized to assess impact (and to see if Data Protection & Digital Information Bill (DPDI) proposals regarding fines, cookies, data protection officers (DPOs), Data Protection Impact Assessments (DPIAs), etc. survive). We will also have to keep an eye on how the EU responds, as any removal of adequacy status will add further complications to EU-UK data transfers. One thing that is for certain is that any business with UK operations, customers, suppliers or partners will need to freshly review and likely make changes to its policies, documents and procedures to account for any changes this year.

CHIPS Act Funds Start to Flow: First Funding Opportunity Announced for Commercial Front-end and Back-end Semiconductor Fabrication Facilities

On February 28, 2023, the first funding opportunity opened under the Creating Helpful Incentives to Produce Semiconductors and Science Act (CHIPS Act), federal legislation that appropriated $52.7B in federal funding to boost the semiconductor industry, including $39B in semiconductor manufacturing incentives.

Recent DOJ Action Creates Uncertainty for Information-Sharing Programs

The U.S. Department of Justice (DOJ) recently withdrew three antitrust policy statements that had provided guidance for information sharing by competitors and that DOJ had issued jointly with the Federal Trade Commission (FTC) starting 30 years ago. DOJ said that the guidance in those statements was “overly permissive on certain subjects, such as information sharing.”

NLRB Invalidates Common Confidentiality and Non-Disparagement Clauses in Severance Agreements

Section 7 of the National Labor Relations Act (NLRA) confers broad rights to non-supervisory employees to engage in “protected, concerted activity” for their “mutual aid and protection,” which generally includes discussing the terms and conditions of their employment both with other employees and, more generally, with the public (“Section 7 rights”). Section 8(a)(1) of the NLRA makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of” their Section 7 rights.

U.S. Attorney’s Offices Adopt New Voluntary Self-Disclosure Policy

It is a reality of corporate America that most companies at one point or other will become aware of misconduct at some level within their ranks. When an organization learns of such misconduct, it is important to move quickly to investigate and remediate any misdeeds. When such misconduct rises to the level of a potential criminal violation, however, organizations seeking to reduce the risk of criminal prosecution or the severity of potential penalties also can consider the further step of voluntary self-disclosure to manage risk.

EPA Launches Initiative to Replace Lead Pipes in Underserved Communities

In 2021, the White House introduced the Biden-Harris Lead Pipe and Paint Action Plan, which promises to replace all lead service lines in America over the next decade. The White House dubbed the plan “game-changing” and anticipates that it will put “pipefitters to work replacing all of America’s lead pipes and service lines.”

DoD Issues New Small Business Strategy to Bolster Participation

Small businesses are not only vital to the American economy, but they also form the backbone of the defense industrial base. More than 70% of the companies doing business with the DoD are small businesses. Despite their importance, the number of small businesses participating in the defense industrial base has declined by more than 40% over the last decade due to various factors, including complex regulations, a convoluted entry process into the defense marketplace, fewer contracting opportunities and increased costs.

Federal Court Ends California’s Ban on Mandatory Employment Arbitration Agreements

In 2019, California enacted Assembly Bill 51 (AB 51) which made it a criminal offense for an employer to require an employee or applicant to consent to arbitration as a condition of employment. In an effort to avoid preemption under the Federal Arbitration Act (FAA), an Act which bars states from treating arbitration agreements differently than other contracts, AB 51 included a provision stating that if the parties mutually entered into an arbitration agreement, it would be enforceable. Thus, an employer could be subject to criminal prosecution for requiring an employee to enter into an arbitration agreement, but if the employee signed the arbitration agreement, it would be enforced.

North Carolina, California, Wisconsin and Illinois Sue Companies over PFAS “Forever Chemicals” Contamination

In the last eight months, the attorneys general of North Carolina, California, Wisconsin and Illinois have sued various primary manufacturers of per- and polyfluoroalkyl substances (PFAS), as well as over a dozen secondary manufacturers of PFAS-containing products. Each lawsuit alleges that the manufacture and distribution of PFAS and PFAS-containing products has led to widespread environmental contamination and harmful exposure.

Alternating Current Yields Alternating Decisions on Bankruptcy Priority Treatment

Scientists have been puzzling over the nature of electricity since as early as 565 B.C., when the Greek philosopher Thales of Miletus experimented by rubbing amber on fur to attract feathers. Thales, however, did not have to ponder the legal nature of the static electricity he observed.

Amid the Rise of Greenwashing Litigation, Guidance Due for Updates May Become Law

How terms like “net zero,” “carbon neutral” and “sustainable” are defined and how such standards are measured are critically important to companies seeking to accurately brand their services and products. Lawsuits related to greenwashing are on the rise, with consumer groups and environmental non-governmental organizations (eNGOs) utilizing consumer protection laws to challenge statements made in green marketing campaigns and how companies account for their claims of environmental-friendliness.

OMB Proposes Revisions to Guidance Supporting the Implementation of IIJA’s Build America, Buy America Act Provisions

As anticipated, following President Biden’s State of the Union Address, the Office of Management and Budget (OMB) issued additional guidance to implement the Build America, Buy America Act provisions of the IIJA. Published on February 9, 2023, the proposed guidance seeks to implement consistent government-wide Buy America requirements for infrastructure projects, and includes guidance to determine the cost of manufactured products and when a variety of types of construction materials can be treated as U.S.-made.

Russia Issues New Authority to Suspend Voting Rights of Some International Investors in Major Russian Companies

The Russian government continues to take measures to curtail the rights of investors from or connected to “unfriendly jurisdictions” (i.e., countries that have introduced sanctions on Russia and Russian persons) (“Western Investors”) without definitively expropriating their assets.

New York Finalizes Disclosure Requirements for Commercial Financing Transactions

In December 2020, New York became the second state to enact legislation to impose consumer-style disclosure requirements for commercial financing transactions. Although these requirements were initially scheduled to become effective on January 1, 2022, the New York Department of Financial Services (NYDFS) issued guidance stating that compliance with the requirements would be delayed until NYDFS issued final implementing regulations. NYDFS issued those final regulations on February 1, 2023, and the disclosure requirements will now become effective in New York on August 1, 2023.

Employment Law in the Golden State: 2023 Updates

As California employers update employee policies and handbooks for the coming year, it is critical that they are aware of new employment laws in 2022 and understand how these changes will potentially affect their operations in the year ahead. From key legislative, case law and wage-and-hour developments to “post”-pandemic pointers and the impacts of new and proposed federal laws, the following updates provide practical guidance to help employers ensure they are in compliance with the new laws that are generally applicable to most California employers.

The SEC’s Fast-Approaching Cybersecurity Overhaul for Public Companies and Regulated Entities

In remarks last year, Gary Gensler, Chair of the Securities and Exchange Commission (SEC) made clear that the SEC “has a role to play” in regulating cybersecurity in the name of “maintaining orderly markets.” That role cannot be overstated.

New OSHA Enforcement Guidance Could Subject Employers to More Citations and Increased Associated Penalties

On January 26, 2023, the Occupational Safety and Health Administration (OSHA) announced new enforcement guidance to effectively increase the number of citations it can issue. OSHA’s current typical practice is to issue a citation containing multiple “instances” of an alleged violation. For example, a citation alleging violation of a machine guarding standard will contain an instance for each machine not properly guarded. Following the new enforcement guidance, OSHA is now encouraged to issue a separate citation for each instance, naturally multiplying the associated penalties.

What to Expect from the New York Department of Financial Services in 2023

The New York Department of Financial Services (NYDFS) is responsible for the supervision of financial services companies operating in New York, including all New York state-chartered banks, insurance companies and producers, companies engaged in virtual currency activity, money services businesses, mortgage lenders and servicers, other non-depository lenders, credit reporting agencies and student loan servicers. According to its most recent annual report, NYDFS supervises approximately 3,000 financial institutions with assets exceeding $8.8 trillion.