Beneficial Ownership Information Reporting Once Again Required Under the Corporate Transparency Act and Potential for a Legislative Deadline Extension

Thursday, February 20th, 2025

On February 17, 2025, in the case of Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex), the U.S. District Court for the Eastern District of Texas, Tyler Division issued an order granting the U.S. Department of the Treasury’s motion to stay the January 7, 2025 nationwide injunction of reporting requirements under the Corporate Transparency Act (“CTA”) pending appeal. This order marks an end to the final standing injunction blocking enforcement of reporting requirements under the CTA by the Financial Crime Enforcement Network (“FinCEN”).

On February 19, 2025, FinCEN posted an update addressing the reinstatement of reporting requirements. In their announcement, FinCEN extended the deadline for reporting companies to file their beneficial ownership information reports (“BOI”) to March 21, 2025. FinCEN also noted that it will “assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks.” (www.fincen.gov/boi, accessed February 19, 2024).

What does the update mean for reporting companies who have yet to file their BOI? Reporting companies should make plans to have their BOI filed with FinCEN by March 21, 2025 because there is no guarantee that another delay will occur. FinCEN has allowed itself latitude for additional modifications to the March 21 deadline in their February 19, 2025 alert, but again, it is not guaranteed.

What is next for the Corporate Transparency Act?

The expedited timeline for appeal with the Fifth Circuit Court of Appeals is unchanged:

• briefing due February 28, 2025
• oral arguments set for March 3, 2025

It is not clear what the outcome of the appeal will be, but regardless of the outcome, we can expect that there will be an appeal to the Supreme Court of the United States.

There is potential for a legislative delay to the reporting deadline currently working its way through the U.S. Senate. The Protect Small Business from Excessive Paperwork Act of 2025, H.R. 736, seeks to extend the deadline under the CTA for reporting companies formed prior to January 1, 2024 until January 1, 2026. Below is a timeline of the bill as of the posting of this article:

• January 24, 2025: bill was introduced into the U.S. House of Representative
• February 10, 2025: bill was passed by the House
• February 11, 2025: bill received by the U.S. Senate and referred to the committee on Banking, Housing, and Urban Affairs

There is undoubtedly more to come for the CTA and reporting companies should continue to monitor their reporting obligations by visiting FinCEN’s official website at www.fincen.gov/boi.

If you have any questions, please email us at CTA@gentrylocke.com.

Your Legal Duty to Remove Snow and Ice from Vehicles

Wednesday, February 19th, 2025

In the wintertime, weather advisories are often issued cautioning drivers to be extremely careful on roads and interstates. Snow and ice on these surfaces can result in extremely low friction between the tire and the pavement, often resulting in horrible crashes and sometimes involving serious bodily injury or death.

Unfortunately, it is not only the snow and ice on the road surfaces that pose a substantial danger. Snow and ice left on a vehicle – such as a car, tractor-trailer, bus, or RV – can be the source of a catastrophic accident. Snow and ice can weigh a tremendous amount and be in a very hard solid state. As the vehicle accelerates, the wind will begin to try and separate the snow and ice from the top of the vehicle. When this occurs, the snow and ice can be flipped backwards off the vehicle, going through the air and causing vehicles behind it to attempt evasive action, which can result in a serious crash. The snow and ice sometimes strikes the vehicle and penetrates the windshield, thereby causing immediate injury to the occupants of the vehicle and often resulting in a secondary crash when the operator loses control. In two reported cases, the driver of the vehicle struck by snow and ice suffered serious eye injuries – with one becoming completely blind in one eye.[1]

Both traffic laws and civil negligence law require motorists to remove snow and ice from their vehicles.

I. Traffic Laws Requiring Removal of Snow & Ice from Vehicles

Many states have traffic laws designed to keep drivers from taking or failing to take any action when it comes to objects obstructing vision out of their vehicle. Under Virginia law, it is illegal for a driver to allow objects to “substantially obstruct the driver’s clear view of the highway through the windshield, the front side windows, or the rear window.”[2] Obviously, snow and ice would qualify for this prohibition. Therefore, under Virginia law, snow and ice must be cleaned off of these surfaces before operating the vehicle. Failure to do so can result in a traffic infraction, a fine up to $250, and court costs.[3]

II. Civil Obligation to Remove Snow & Ice from Vehicles

If snow or ice breaks loose from a vehicle, causing another vehicle to crash or its occupants to be injured, then the driver who failed to properly clean the vehicle (and/or his or her company) can be sued and held liable for any personal injury and property damages caused by the failure to remove the snow and ice. This is negligence, just like a driver who rear-ends another motorist or a driver who runs a red light and T-bones another motorist. Therefore, all Virginia motorists have a civil legal obligation to reasonably remove snow, ice, and any other dangerous and unsecured objects from their vehicle that may cause injury to others when the vehicle is in operation. Motor vehicles of all shapes and sizes can and must be rendered free of snow and ice prior to operation.

A. What to Do if You or Your Vehicle are Injured from Snow/Ice Falling from Another Vehicle

If you are a victim of the negligence of another driver who failed to properly clean the surface of their car, truck, etc., prior to using the roads and highway, you should immediately do the following:

1. Call the police and report the accident;
2. Contact emergency services and get the help you and/or your passengers need for any injuries you suffered;
3. Attempt to get the name and/or the description of the vehicle and/or driver of the vehicle from which the snow or ice originated;
4. Contact your insurance company to advise them of the accident and of your need for towing, a rental vehicle, and potentially vehicle repair; and
5. Contact a personal injury attorney experienced in handling negligence cases resulting from similar situations.

B. What to Do if You Cannot Identify the Negligent Driver

Frequently, the driver and passengers of the victim’s vehicle often have no idea of the identity of the vehicle from which the ice or snow broke loose and caused the accident. The at-fault driver then becomes a “John Doe.” You obviously cannot seek compensatory damages from someone you cannot identify or locate. However, our law provides for a very powerful cure for that problem. A portion of your auto insurance policy is designed specifically for this purpose. It is called Uninsured Motorist Coverage (UM).

If you have a Virginia insurance policy, then you are already paying for this benefit because all Virginia auto insurance policies have some level of uninsured motorist coverage by default.[4] All Virginia auto insurance policies issued or renewed on or after January 1, 2025 will have at least $50,000 in uninsured motorist coverage.[5]

The way this works is that you file a lawsuit against “John Doe,” you serve the lawsuit on your own insurance company, and your insurance company defends “John Doe.”[6] But won’t that claim increase your insurance premiums? No, your insurance company cannot raise your insurance rates for filing a John Doe or uninsured motorist claim, unless you were at fault for the accident.[7]

The major problem we have observed over the years is that the average person does not purchase enough uninsured motorist coverage to protect against serious injuries or death. The $50,000 in minimum coverage can be exhausted from medical bills from a helicopter flight or a single hospital visit, let alone provide for a catastrophically injured person with ongoing medical needs or replace the income of a lost family member. Every driver who cares about themselves, their family, their friends – or anyone else who rides in their vehicle – should have at least $1 million in uninsured/underinsured motorist coverage. This amount of coverage is usually obtained through purchasing an umbrella policy that has a uninsured/underinsured motorist coverage endorsement. Currently, the cost of this coverage is approximately $200-$500 per year, depending on the insurer. Do not let anyone talk you into not securing this important coverage to protect you, your family, and your passengers.

Insurance is something you hope you will never use – just like an attorney. However, when something tragic happens, you almost always need both!

For further information about this topic or if you or a loved one has been injured due to someone else’s negligence, our experience personal injury attorneys are here to help. Stay safe, drive responsibly, and protect yourself this winter. Contact us today.

[1] See Alaska Freight Lines v. Harry, 220 F.2d 272, 273 (9th Cir. 1955); Kimmel v. Pontiakowski, 2014 U.S. Dist. LEXIS 147452, at *1-2 (M.D. Pa. Oct. 16, 2014).
[2] Va. Code § 46.2-1054.
[3] See Va. Code § 46.2-113; Va. Code § 18.2-11(d).
[4] See Va. Code § 38.2-2202(B) (stating that an insured can elect to reduce the limits of uninsured/underinsured motorist coverage, “BUT NO LOWER THAN THE FINANCIAL RESPONSIBILITY LIMITS REQUIRED BY § 46.2-472”).
[5] See id.; Va. Code § 46.2-472(B).
[6] See Va. Code § 38.2-2206(E) (“If the owner or operator of any vehicle causing injury or damages is unknown, an action may be instituted against the unknown defendant as “John Doe” and service of process may be made by delivering a copy of the motion for judgment or other pleadings to the clerk of the court in which the action is brought. Service upon the insurer issuing the policy shall be made as prescribed by law as though the insurer were a party defendant. The provisions of § 8.01-288 shall not be applicable to the service of process required in this subsection. The insurer shall have the right to file pleadings and take other action allowable by law in the name of John Doe.”).
[7] Va. Code § 38.2-1905(A).

Administrative Law Update – University of Richmond Law Review

Wednesday, February 12th, 2025

Gentry Locke is honored to announce the publication of the first Administrative Law update in the Annual Survey of Virginia Law since 2014. Noah Sullivan was chosen to pen this first update in ten years because of his unique perspectives on administrative law and regulatory issues. Sullivan has practiced administrative law in the private sector and also been “in the room where it happens” in the Virginia Governor’s office. While Virginia administrative law has been stable, Virginia politics have not. The state’s political dynamics have significantly changed in the last ten years. This article predicts that, because of those trends, the next ten years will not be so quiet on administrative law.

Read more to learn about Administrative Law case updates, legislative updates, significant developments and more here: Administrative Law Update – Annual Survey of Virginia Law

2025 Virginia General Assembly Crossover Update

Thursday, February 6th, 2025

Tuesday, February 4, was the midway point for the Virginia General Assembly, known as “Crossover.” Each chamber will now only deal with legislation that originated from the other. Over 2,000 bills, constitutional amendments, and joint study resolutions were introduced for consideration. This number has been significantly diminished and will continue to be before the General Assembly adjourns Sine Die on February 22. Below are updates on legislative initiatives previously mentioned in the Pre-Session Report.

Artificial Intelligence

Over the past year, the Joint Commission on Technology and Science (JCOTS) met to discuss legislation carried over from the 2024 Session. All four of the refined bill concepts were recommended by the Commission.

• HB697(Maldonado)/SB571(Ebbin): This legislation makes it a Class 1 misdemeanor to use synthetic media for committing a crime offense involving fraud. Also, it allows civil action against the person who violates this code section. Lastly, it calls on the Attorney General to establish a workgroup to study Virginia’s AI laws. Status: Concepts reintroduced as HB2124 and SB1053 have passed the House 87-9 and 39-0.
• SB164(Reeves): Creates property rights for people to own their digital replications of themselves for commercial use. Allows these digital creations to be licensed and provides a legal framework for unauthorized use. Status: Concepts reintroduced as SB1421 and HB2411 (Glass). The Senate Bill was passed by indefinitely (8-7). The House Bill failed to report from the Appropriations Committee.
• SB487(Aird): Establishes standards for public bodies that use AI systems to make “high-risk” decisions to avoid algorithmic discrimination. A high-risk decision is considered material or legal and impacts education, employment, finance, or housing. The concern is based on fears of biased data that will negatively impact a person because of their gender, race, etc. It also seeks to establish a workgroup to study the impact on local governments. Status: Concepts reintroduced as SB1642 and passed the Senate 40-0.
• HB747(Maldonado): Regulates high-risk decision-making AI systems private entities use to prevent algorithmic discrimination. This includes disclosure to a consumer when AI is being used, allowing a person to opt out in favor of human review. Status: Concepts reintroduced as HB2094 and passed the House 51-47.

Car Tax

The Governor’s amendments to the biannual budget seek to provide car tax relief. He addresses this issue by creating a $1.1 billion fund for income tax credits—individual taxpayers earning $50,000 or less will qualify for $150 in tax credits. Joint filers will qualify for $300 if their income is $100,000 or less. Status: Both the House and Senate budgets repurposed the $1.1 Billion as rebates of $200 for individuals and $400 for joint filers to be issued by October 15, 2025, and increases in the refundable portion of the Earned Income Tax Credit (EITC) to 20% of the federal credit.

Data Centers

On December 9, 2024, the Joint Legislative Audit and Review Commission (JLARC) reported on Virginia’s world-leading data center industry and policy options for the General Assembly to consider how best to handle the industry moving forward. Northern Virginia accounts for 13% of global data center operational capacity, the world’s single largest market. Data centers are estimated to contribute $9.1 billion in GDP annually to the Commonwealth’s economy. The most substantial aspect of the report is the impact industry growth will have on energy consumption. The report states that left unconstrained, data center projects will increase energy demand by +183% between now and 2040. Much of the industry’s new site growth is expected along the I-95 corridor. The list of policy options made by the Commission may be read here. Status: Numerous data center bills were introduced during this Session based on the JLARC report. Below are the bills that remain.

• HB1601(Thomas)/SB1449(Ebbin) Provides that before any approval of a rezoning application, special exception, or special use permit for the siting of a new high energy use facility (HEUF) shall collect certain information. Status: HB1601 Passed the House (57-40). SB1449 Passed the Senate (33-6-1).
• HB2084(Shin) Directs the SCC to determine if the utilities need new and additional classifications for energy customers. Status: Passed the House (61-35).
• SB960(Perry) Directs the SCC to initiate proceedings to determine if the current allocation of costs among its customers is appropriate to ensure data centers are not being subsidized. Status: Passed the Senate (26-13-1).
• SB1047(Roem) Directs the Department of Energy to evaluate and asses demand response programs. Status: Passed the Senate (21-17).

NOVA Casino

Following extensive legislative actions, studies from JLARC, and referendums by localities, Virginia has five permitted casinos in as many localities: Bristol, Danville, Norfolk, Petersburg, and Portsmouth. During the 2024 Session, Senator Marsden introduced SB675, which enables a casino in Northern Virginia. This legislation failed to pass, but similar bills are expected to be introduced this year.  Status: SB982 (Surovell) passed the Senate (24-16).

Sanctuary Cities

Under budget Item 377 in the Governor’s proposed amendments to the biannual budget, there is language that compels officials to comply with ICE and directs the withholding of payments for failure to comply. This is one of many policy decisions that will nationalize legislative policy discussions during this Session.

F.1. Any Director, Superintendent, sheriff, or other official in charge of a facility in which an alien is incarcerated shall comply with lawful U.S. Immigration and Customs Enforcement detainers and shall provide at least 48-hour prerelease notification to U.S. Immigration and Customs Enforcement.

2. If any Director, Superintendent, sheriff, or other official in charge of a facility is in violation of F.1. or if a local law enforcement agency, sheriff’s office, or official in charge of a facility, pursuant to adoption of a local ordinance, procedure, policy, or custom prohibits or impedes communication or cooperation with U.S. Immigration and Customs Enforcement, the Director of the Department of Criminal Justice Services shall withhold reimbursements due to a locality under Title 9.1, Chapter 1, Article 8, Code of Virginia, and the Compensation Board shall withhold per diem payments for financial assistance to local or regional jails.

Status: Removed from House and Senate Budgets.

Solar-Siting

The reconstituted Commission on Electric Utility Regulation took on numerous policy questions impacting the regulation and permitting of Virginia’s energy industry. One prominent question is how to balance the Commonwealth’s renewable energy goals created in the Virginia Clean Economy Act and surging energy demand with local land use decision-making. There has been a sharp decline in solar projects approved by local governments and a sharp increase in onerous zoning ordinances. Potential recommendations are expected at the Commission’s final meeting before Session later today. The Commission’s meeting may be viewed here. Status: SB1190 (Deeds) and HB2126 (Sullivan) were introduced to capture the recommendations of CEUR. Both were substantially amended throughout the process. SB1190 failed to report from the Floor. HB2126 failed to report from Subcommittee. Additionally, there is legislation to set standard ordinances for siting, HB2438 (Mundon King). This legislation passed the House (48-46).

Standard Deduction

Governor Younkgin has called on the General Assembly to permanently increase the standard deduction from $3,000 for single filers and $6,000 for couples to $8,500 and $17,000, respectively. This change expires on January 1, 2026. As of this posting, Senator Suetterlein has introduced SB782 to accomplish this initiative. Status: SB782 failed to report from committee. The House and Senate budgets made adjustments to the standard deduction by increasing the current biennium deduction to $8,750 for individuals and $17,500 for joint filers.

Taxes on Tips

Senate Minority Leader Ryan McDougle and Delegate Chad Green have introduced SB763/HB1562. This legislation provides an income tax deduction for cash tips received and is a major initiative in Governor Youngkin’s 2025 Legislative Agenda. This proposal is anticipated to return $70 million annually to taxpayers. The Virginia Department of Taxation and the Virginia Employment Commission estimate that more than 250,000 Virginia workers receive tips as part of their employment. Status: Both bills failed to report from committee.

Virginia Military Survivors and Education Program (VMSDEP)

Following the 2024 General Assembly Session, numerous meetings were held regarding the long-term feasibility of VMSDEP. This program is designed to provide educational benefits to the surviving family members and dependents of military service members who are killed in action, are permanently disabled due to service, or are classified as missing in action. The Governor announced an additional $120 million and long-term sustainable funding from VA529 surpluses. No policy changes on how the program is implemented were presented. There will likely be legislation introduced to decide the program’s long-term viability. Status: HB1694 (Askew) requires the Department of Veterans Services and the State Council of Higher Education for Virginia to coordinate to report no later than December 15 of each year on persons eligible for the program and an estimate of how many enrolled in higher education using the tuition waiver. Budget discussions are still ongoing.

Zach is a part of our Gentry Locke Consulting team that is affiliated with Gentry Locke’s Government & Regulatory Affairs Practice Group. To learn more about Zach and our Gentry Locke Consulting team, check out their website here.

Practical Advice for Virginia Private Sector Employers Regarding their DEI Policies & Practices

Tuesday, February 4th, 2025

Article by Todd Leeson[1]

There is much confusion regarding whether private sector employers are able to maintain policies regarding Diversity, Equity and Inclusion (DEI) in the workplace.  I have been following the public policy and legal issues surrounding DEI for years.  I have also closely scrutinized the activities over the last few weeks including the Executive Orders (EOs) recently issued by President Trump.  This article is the combination of my experience, as well as dozens upon dozens of articles and legal authorities I have studied. It is not exhaustive, but is intended to convey my primary thoughts at this time.

For purposes of this article, the three primary EO’s to note are as follows:

• Executive Order 14173: “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” issued January 21, 2025.
• Executive Order 14151: “Ending Radical and Wasteful Government DEI Programs and Preferencing,” issued January 20, 2025.
• Executive Order 14168: “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,’ issued January 20, 2025.

Executive Orders cannot replace or overrule laws enacted by Congress, state laws, or decisions of the United States Supreme Court.  For example, Title VII of the Civil Rights Act of 1964 remains settled law: employers cannot discriminate against persons, or condone harassment, on the basis of their race, sex, national origin, or religion.  (Likewise, pursuant to the Age Discrimination Employment Act, Americans With Disabilities Act, and Pregnant Workers Fairness Act, employers cannot discriminate against persons on the basis of their age, disability, pregnancy, childbirth, or related medical conditions.)

Moreover, in Bostock v. Clayton County, 590 U.S. 644 (2020), the U.S. Supreme Court held that “sex” discrimination under Title VII included discrimination against a person due to his or her sexual orientation or gender identity.  In addition, the Virginia Human Rights Act expressly prohibits discrimination on the basis of “sexual orientation” and “gender identity.”  (More on this topic later in the article.)

For additional context, recall that in Students for Fair Admissions v. Harvard, 600 U.S. 181 (2023), the U.S. Supreme Court held that colleges could not make admission decisions based on an applicant’s race.  This was not an employment case.  But much has been written regarding its potential applicability to Title VII cases in the workplace.

These EO’s do not invalidate all private sector DEI initiatives.  Here is the operative language:

“I further order all agencies to enforce our longstanding civil-rights laws and to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.  (emphasis added).  EO 14173.”

The EO further objected to those entities who have adopted “dangerous, demeaning, and immoral race and sex based preferences under the guise of DEI.”  (emphasis added).

The EO’s require the Attorney General to publish a proposed enforcement report within 120 days with a “plan of specific steps or measures to deter DEI programs . . . that constitute illegal discrimination or preferences.”  Thus, we should receive more specific content regarding the Administration’s position after May 2025.

So, the key question is this: what DEI practices are “illegal?”

Let’s take the most obvious examples of policies that are “illegal.”

• There can be no “set-asides.” For example, an employer cannot hold a position open for a person based on his or her race, sex or other protected class.
• There can be no “quotas.” An employer cannot have a policy stating that it will strive to employ (or promote) a certain percentage of women or minorities in management.  Similarly, a business should not have aspirational targets or goals that reward diversity—for example, an employer should not link a manager’s pay to his or her results in promoting or retaining females or minority employees.
• There can be no preferences. This is analogous to the SFAA college admissions decision.  An employer cannot break a tie or give a “plus” to an applicant or employee based on his or her protected class (e.g., race or sex).  [On January 28, 2024, Mark Cuban posted on X (Twitter) that while he only hired that the best persons, “race and gender can be part of the equation.”  Then EEOC Commissioner Andrea Lucas (now the acting EEOC Chair) replied that he was “dead wrong on black-letter Title VII law.”]

Another example of a policy or program that would likely be deemed “illegal” would be a leadership development program limited to female managers.  Likewise, it is likely not permissible to have an internship or scholarship program restricted by race (or any other protected class).

As we evaluate the shifting landscape, here’s an important concept to follow:  Employers must ensure that their hiring practices, evaluations, and promotion protocols are based on individual merit, skills and performance.  The National Society for Human Resource Management (SHRM) organization recently opined as follows:

“SHRM recommends that all private companies evaluate their inclusion and diversity initiatives to ensure that they provide equal access to opportunities, skills development, and do not give special advantages to one person or group over another, avoiding any perception of identity-based favoritism.”

“How to Adjust your DEI Initiatives Under Trump’s New Guidelines,” (January 28, 2025, accessed at SHRM.org.)

Private employers are urged not to overreact.  As Vicki Lipnic, a former Republican EEOC Commissioner, recently noted: “You always have to parse, what do people mean by DEI.  You could have 20 different kinds of corporate programs that would fall under the category.”  “How Trump’s Assault on DEI Will Ripple Across Corporate America,” (Wall St. Journal, Jan. 24, 2025).  In other words, it would be a mistake for an employer to suddenly disband or scrap its entire “DEI” plan as a knee-jerk reaction to the show of force from the Trump Administration.  If an employer acts rashly, it could also suggest to current employees that its existing plan was unlawful and/or that it is no longer committed to having a more inclusive or diverse workforce.

So What Policies or Initiatives Should an Employer Keep or Adopt?

Employers can and should cast a wide net in their recruitment efforts.   The business case for maintaining a “diverse” workforce cannot be plausibly refuted.  Employers should seek to attract and hire the best candidates from a broad cross-section of available resources.  As Benjamin Spencer, the Dean of William & Mary’s Law School, wrote:

“The objective of any hiring process is to acquire excellence. . . . But excellence doesn’t simply mean hiring the person with the best grades, the highest scores, or the most awards.  I have interviewed top students whom I would never hire because they lacked maturity, judgment, empathy, personality, perspective or experience. . . . . No demographic group has a monopoly on talent.  The excellence that employers seek doesn’t exclusively or predominately reside within a single demographic of the population. . . . A hiring process that produces a monolithic group of employees isn’t yielding the most qualified people for the positions.  . . . Firms will need to work harder to ensure that they get exposed to a robust pool of prospective hires.”

“Throw Out the Diversity Playbook and Reimage Inclusive Hiring,” (published in Bloomberg Law News, November 10, 2023).                

Employers can and should continue their EEO education, training and commitment.  “DEI” training is another concept fraught with sensational headlines and frequent misinformation.  Let’s break it down.

It remains unlawful for an employer to permit an employee to be subjected to discrimination or harassment based on a protected class (e.g., sexual harassment).  To this end, employers must continue to publish and follow their EEO policies and complaint process.  Moreover, employers must educate their employees, and train their managers on company policy and protocol.  Virtually every week an aggrieved person obtains a substantial verdict or settlement in a discrimination or harassment case against an employer because a supervisor is found to have disregarded or violated an employer’s EEO policy.  Simply put, businesses need to stay the course, and take proactive measures in support of their EEO commitment.

To be sure, some employers have gone too far in their “DEI” training.  It is not prudent for employers to permit training in which white, male managers are essentially told that they are perceived to be “racist” or “sexist” in their past actions.  Indeed, there are pending lawsuits in which employees have plausibly alleged that an employer’s DEI/EEO training went too far.  See, e.g.,  Pumariega v. Basis Glo. Techs., 2024 U.S. Dist. Lexis 190747 (N. D. Il. Oct. 21, 2024)(employee plausibly alleged his termination was in retaliation for his complaints that the company’s DEI training conflicted with his religious beliefs).

While the details matter, it is my judgment that employers can continue to include “implicit bias” education as part of its EEO training.  (A few years ago, I was at my local YMCA and struck up a conversation with a man who noted he just moved to the region.  When I asked what brought him here, he responded his “spouse obtained a great job here.”  I asked, “what does she do?”  He responded that “he was recruited here by a [local company].”  I learned an important lesson that day.

Employers can and should continue their efforts to be Inclusive and Welcoming to All.  This is another topic in which there has been some confusion, and mis-steps.  Perhaps it is best to illustrate this point with an obvious example.  Not everyone in your workplace is a Christian who celebrates Christmas.  If you promote your company’s annual “Christmas” party, there are likely some employees who will feel left out.  In my judgment, it is not wise for business executives to cater to the “majority” and/or to proclaim “that’s just the way it is.”

Walmart has recently garnered publicity (positive and negative) after announcing some specific changes to its DEI initiatives.  In partial response to criticism it received, Walmart responded, “we’re the same company with the  . . . same commitment to creating a sense of belonging for all of our associates .”  “Shareholders Chide Walmart CEO Following Recent DEI Rollback,” (Bloomberg Law, Daily Labor Report, Jan. 15, 2025).  I believe this is a helpful (and lawful) statement.

It has been reported that Federal Agencies are no longer permitted to highlight celebrations such as Black History month.  On this point, it was encouraging to see Virginia Governor Glenn Youngkin highlight the significance of Black History Month in official postings on February 1, 2025.  There is no compelling reason that a private employer cannot also note a holiday or celebration that has some significance or relevance to its employees.

Let’s return to the concept that employers should cast a wide net to attract “excellent” employees. Having invested the time, money and resources to do so, it is equally important to adopt sound practices to retain your best employees.  We are not talking about preferences.  Instead, businesses are well advised to maintain a welcoming and inclusive environment for all their employees.

The Public Policy Debate Regarding Transgender Employees.  As noted above, it is unlawful under Federal and Virginia law to discriminate against employees based on their gender identity.  On April 29, 2024, the EEOC issued Enforcement Guidance on Harassment in the Workplace in which it included examples of conduct that constituted discrimination based on an employee’s gender identity.  The EEOC also filed lawsuits against employers alleging discrimination and/or harassment against employees based on their gender identity.

In EO 14168, however, President Trump recently declared new Federal policy that there are only two genders, male and female. Further, the EEOC’s new Acting Chair Andrea Lucas thereafter stated the Trump Administration’s firm position that a female employee, among other rights, has the legal right to a single-sex restroom.

There is, and will continue to be, litigation to establish the contours of these rights.  For example, what if a supervisor objects to referring to an employee by their preferred pronouns because it conflicts with his religious beliefs?  Similarly, what if a female employee objects when a biological male employee, who is transitioning to female, requests to use the women’s restroom?

In my judgment, there are no definite legal answers to these challenging and evolving questions.  Each situation must be evaluated based on the unique circumstances. Employers should engage in an interactive discussion with the key persons to assess whether there is a compromise solution or accommodation that is reasonable or viable.

Thoughts on Whether to Use the “DEI” Label.  I emphasize (again) that there is nothing inherently unlawful for a company to have a “DEI” policy or plan.  It is the specific details of an employer’s plan or policies that matter.  But what about the term itself?  Has “DEI” become too toxic?  Must employers rename their policies?  Here too, there are no definite answers.

“Diversity” should focus on employing well-qualified persons who have varying life experiences.  It may include persons who come from disadvantaged backgrounds, geographic locations, persons with disabilities, veterans, or persons who have excelled in spite of challenges.  In other words, “diversity” must be much broader than just race or sex.

“Equity” is the term that engenders the most controversy because of a misperception of its definition.  Viewed properly, the focus is on “equal opportunity,” not equal outcomes or equal results.  If a disabled employee is able to excel at her job with the aid of a reasonable accommodation (e.g., better lighting or larger computer screen for a visually-impaired employee), this is a prudent (and legally required) step to take.

As we have reviewed, the term “Inclusion” refers to taking measured and meaningful steps to make your employees feel like they are welcomed, celebrated, and that they belong.  In an inclusive or welcoming workplace, everyone is treated as a valuable player on the team.

I am not going to opine regarding what label an employer should use and/or whether it should rename its DEI policy or programs.  The more important point, in my view, is for executives to take a fresh look at their current policies, programs and practices, as well as the culture of the workplace.

(As you may recall, SHRM’s Board announced in July 2024 that it would remove “equity” from the equation and instead focus on Inclusion and Diversity (I&D).  It concluded that the term “equity” caused unnecessary confusion and was better framed as being part of Inclusion.)

The Trump Administration has made it crystal clear that it is looking to make public examples of employers, especially larger employers, who maintain “illegal” DEI policies. To this end, businesses are also well advised to consult with experienced employment counsel, especially if there are concerns that your current policies or practices may have some legal risk.  Engaging employment counsel also allows the employer to maintain an attorney-client privilege that will permit candid and creative communications to assess the best steps to take in response to our shifting political and social landscapes.

President Trump’s high profile and decisive actions, including his flurry of Executive Orders, caught most employers off guard.  These actions (and others to come) cannot be ignored.  On the other hand, businesses should make the time to understand their options, and level of risk.  Employers are more likely to prosper if they invest the time, energy and resources to hire, retain, and promote their best employees.

[1] I appreciate the helpful editorial assistance provided by my daughter, Morgan Leeson, Fuqua School of Business (Duke) MBA Candidate, Class of 2026.

D.C. Plane Crash: What Legal Remedies May Be Available?

Sunday, February 2nd, 2025

On the night of January 29, 2025, one of the most devastating plane crashes in U.S. history took place in Washington, D.C. That evening, a Bombardier CRJ700 plane (American Airlines flight 5342), transporting four crew members and 60 passengers, was flying northbound over the Potomac River and preparing to land at Ronald Reagan Washington National Airport (DCA) on runway 33.[1] As the plane approached the airport, three soldiers aboard a U.S. Army Sikorsky H-60 Black Hawk helicopter were engaged in a training exercise in nearby airspace.[2] The two aircraft collided in mid-air, causing an explosion that sent both aircraft and all passengers into the Potomac River.[3] Now, the tragedy has left the families and friends of 67 people without their loved ones and desperately looking for answers, making the crash the deadliest U.S. aircraft disaster since 2001.[4]

After the initial horror of the crash abates, the attention will and must turn to practical considerations, such as the lost financial support, love, and guidance of the deceased passengers. Unfortunately, even the best legal system in the world can only provide monetary damages to those left behind.

1. The Crash Investigation

Although the D.C. plane crash occurred just a few days ago, the internet is full of many speculative “theories” about the cause(s) of the crash. As wrongful death attorneys that handle plane and helicopter crash cases, we can attest to the fact that aviation crash investigations can be complex and lengthy.

The National Transportation Safety Board (NTSB) is an independent federal agency that is required by law to investigate nearly every aircraft accident in the U.S.[5] 49 U.S.C. § 831.20(a)(3)(i) is particularly applicable to the D.C. plane crash, which authorizes the NTSB and military authorities to jointly investigate “each accident involving a military aircraft and . . . a civil aircraft.” That’s why the NTSB and the Department of Defense are jointly investigating the crash.

However, the NTSB and military authorities are not the only players involved in the D.C. plane crash investigation. The NTSB has indicated that approximately 35 governmental agencies have already been involved in the investigation.[6] In addition to all of these governmental entities, the NTSB also commonly invites the aircraft manufacturers and system companies to provide subject matter expertise in plane crash investigations. Unfortunately, the family members of the victims have no seat at the table and are unable to send their own experts. In this case, the list of third party subject matter experts could be quite long. The sheer number of entities involved demonstrates the complexity of these investigations.

The NTSB has its own Black Hawk certified pilot to help with its independent investigation of the D.C. plane crash.[7] The NTSB has recovered two separate recorders (black boxes) from the CRJ700: (1) a flight data recorder (FDR), and (2) a cockpit voice recorder.[8] The NTSB expects to obtain a full download from the CRJ700’s FDR, which could house up to 2,000 data points.[9] The CRJ700’s cockpit voice recorder had some water intrusion, but the NTSB has a “very high level of confidence” that they will recover the data.[10] The NTSB has also recovered a combined cockpit voice recorder and digital flight data recorder from the Sikorsky H-60.[11] There was no exterior damage to the Sikorsky’s recorder. These black boxes recovered by the NTSB will likely provide significant additional insight into the cause(s) of the crash. What were the pilots saying and doing in the final minutes and seconds of the crash? Did any systems malfunction?

The NTSB’s investigator in charge, Bruce Banning, released the following information after analyzing the CRJ700’s cockpit recorder:

• “Prior to initial descent, the crew briefed the arrival for the troups five arrival followed by an ILS approach to Runway 01 at DCA.”
• 8:15 PM: “The aircraft left 37,000 feet for an initial descent” to Reagan National Airport.
• 8:39:10 PM: “Potomac approach cleared the crew for the Mount Vernon visual Runway 01 approach.”
• 8:43:06 PM: “The crew made initial contact with the DCA tower. The tower controller then asked if the crew could switch to Runway 33. After a brief discussion between the crew, they agreed to Runway 33.”
• 8:45:27 PM: “The autopilot was disconnected.”
• 8:46:01 PM: “A radio transmission from the tower was audible informing PAT 25 that traffic just south of the Wilson Bridge was a CRJ at 1,200 feet circling to Runway 33.”
• 8:46:29 PM: “The crew received a 1,000 foot automated call out.”
• 8:46:47 PM: “DCA tower cleared other jet traffic on Runway 01 for departure with no delay.”
• 8:47:29 PM: “The crew received a 500 foot automated callout.”
• 8:47:39 PM: “A radio transmission from the tower was audible, asking PAT 25 if the CRJ was in sight. One second later, the crew received an automated traffic advisory stating ‘traffic traffic.’”
• 8:47:42 PM: “A radio transmission from the tower was audible, directing PAT 25 to pass behind the CRJ.”
• 8:47:58 PM: “The crew had a verbal reaction and FDR data showed the airplane beginning to increase its pitch.”
• 8:47:59 PM: “Sounds of impact were audible . . . followed by the end of the recording.”[12]

The NTSB generally releases a preliminary report within the first 30 days. But the preliminary report will likely not be definitive about the cause of the crash. For example, the NTSB’s seven page preliminary report about the February 9, 2024, plane crash in Naples, Florida, provided little information about the cause(s) of that crash.[13] The NTSB aims to complete an investigation within 12 to 24 months, at which time it will issue a more detailed probable cause determination and report.[14]

2. Potential Legal Remedies

The NTSB investigation may reveal several proximate causes of the crash. Often, human error and/or mechanical failures are the cause of plane and helicopter crashes. Obviously, the passengers of flight 5342 were completely innocent. If human error was a cause of the D.C. plane crash, then victims’ families will likely be able to pursue negligence claims against the at-fault parties.

To the extent that the airplane pilots and/or airline were at fault for the crash, the victims’ families may pursue negligence claims against them. These claims will be governed by D.C. tort law because that is where the crash occurred. The victims’ families will have a right to a jury trial for these claims. Under D.C. law, the legal representative of the decedent’s estate can bring both a wrongful death action and a survival action at the same time.[15] D.C. law provides that recoverable damages in a wrongful death action include “reasonable expenses of last illness and burial” as well as “pecuniary losses resulting from the loss of financial support the decedent could have been expected to provide his next of kin, [and] . . . the value of services the decedent would have provided, including e.g., loss of care, education, training, guidance and personal advice.”[16] In addition to the wrongful death action, the victims’ families may also bring a survival action for any conscious pain and suffering that the decedent suffered prior to his or her death.[17] Over 20 years ago, the D.C. Court of Appeals affirmed judgments for hundreds of thousands of dollars in survival actions where the decedents were only alive for a matter of seconds or minutes after an accident.[18] D.C. wrongful death actions must be filed within two years from the date of death,[19] whereas D.C. survival actions must be filed within three years from the date of injury.[20]

To the extent that the helicopter pilots, air traffic controller, U.S. Army, Federal Aviation Administration, and/or the federal government are at fault for the crash, the victims’ families may pursue negligence claims against the United States under the Federal Tort Claims Act (FTCA). This is because the helicopter pilots were employees of the federal government. Historically, the doctrine of sovereign immunity barred negligence claims against the United Sates for tortious acts by its employees. The FTCA statutorily authorizes victims’ families to sue the United States by specifically providing that the United States is liable “in the same manner and to the same extent as a private individual under like circumstances.”[21]

There are many differences between the FTCA and state/district law negligence claims. Unlike those claims, pre-judgment interest and punitive damages are not available under the FTCA.[22] Additionally, before a lawsuit can be initiated, notice of an FTCA claim must be presented to the appropriate federal agency and denied by the agency in writing.[23] The notice must be presented to the appropriate federal agency “within two years after such claim accrues.”[24] The notice is generally provided to the federal agency responsible via form 95. It is imperative that the notice form be completed with the assistance of an experienced attorney because the form requires the plaintiff to list a total amount for the claim, which cannot be increased at a later point in time, unless “the increased amount is based upon newly discovered evidence not reasonably discoverable at the time of presenting the claim to the federal agency, or upon allegation and proof of intervening facts, relating to the amount of the claim.”[25] Therefore, it is imperative that an experienced and qualified aviation attorney help identify all damages and their impact on survivors as soon as possible.

Any FTCA cases arising out of the D.C. plane crash must be filed in federal court because U.S. district courts have “exclusive jurisdiction of civil actions on claims against the United States, for money damages . . . for . . . personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment. . . .”[26] The FTCA claim will be forever barred unless it is filed “within six months after the date of mailing . . . of notice of final denial of the claim by the agency to which it was presented.”[27] The FTCA claims can only be filed in the federal judicial district either “where the plaintiff resides or wherein the act or omission complained of occurred.”[28] Like any common law negligence claims against non-government individuals and/or entities that may arise from the D.C. plane crash, D.C. substantive tort law will apply to the FTCA claims because “[u]nder the FTCA, courts are bound to apply the law of the state (or here, the district) where the accident occurred.”[29] Importantly, the victims’ families’ will not have a right to a jury trial for their FTCA claims because “any [FTCA] action against the United States . . . shall be tried by the court without a jury.”[30]

To the extent that a mechanical failure is determined to be a cause of the crash, then the families may have products liability claims against the manufacturer(s) and distributor(s) of the defective product(s). Products liability cases can take many forms, and claims of strict liability, negligence, and breach of warranty may be asserted. These claims will also be governed by D.C. law.

If a deceased passenger was traveling for work at the time of the crash, immediate financial support can be obtained through a potential combination of workers’ compensation death benefits and any employer-provided life insurance.

This situation will involve some of the most complex legal issues ever encountered in civil law. For example, who can pursue legal rights? What claims? When can they be made? How will they be made? Where will they be filed? Within what time limit must they be filed against which defendants?

3. Plane Crash Attorneys

Our firm has significant experience handling complex plane crash cases. Our team is headed by Matthew W. Broughton, Esq., who holds an Airline Transport Pilot (ATP) certificate, has over 5000 hours of flight time, has handled many cases involving aircraft disasters over the course of his 40-year career, and has actually landed numerous aircraft on runway 33 at DCA, utilizing both instrument and visual approaches. Our “Go Team” for plane crash cases consists of many experienced wrongful death attorneys, an in-house investigator who has investigated hundreds of accidents over the years, two in-house nurses, paralegals, and legal assistants.

[1] Joel Guinto and James FitzGerald, What We Know So Far About Washington DC Plane Crash, BBC (Jan. 31, 2025).
[2] Cybele Mayes-Osterman & Davis Winkie, Army Helicopter in DC Crash Was on ‘Routine’ Training Flight Carrying Night-Goggles, USA Today (Jan. 31, 2025).
[3] See Security Footage Shows New Angles of D.C. Crash, NBC News (Jan. 31, 2025).
[4] The Associated Press, Collision Between Helicopter and Plane Kills 67 in Nation’s Deadliest Air Disaster Since 2001, AP (Jan. 30, 2025).
[5] See 49 C.F.R. § 831.2(a); 49 C.F.R. § 831.20.
[6] See NTSB Media Briefing 2 – PSA Airlines Bombardier CRJ700 & Sikorsky H-60 Military Helicopter Collision. The agencies and first responders involved include: the Fairfax County Fire and Rescue Department, Arlington County Fire and Rescue, Arlington County Emergency Management, Arlington Police, Alexandria City Fire, Alexandria Police, Virginia State Police, NCR Incident Management Team, the Virginia Department of Emergency Management, the Virginia Department of Transportation, Senator Warner’s Office, MWAA Fire and Rescue Team, MWAA Police, D.C. Fire and Rescue, Prince William Fire and Rescue, Montgomery Fire and Rescue, Prince George Fire and Rescue, Charles County Fire and Rescue, Baltimore Fire, Baltimore Police, Anne Arundel Fire Department, Maryland State Police, Maryland Natural Resource Police, Metropolitan Police Department of the District of Columbia, U.S. Coast Guard, U.S. Army, U.S. Air Force, Federal Bureau of Investigations, Secret Service, Customs and Border Patrol, Park Police, U.S. Department of Defense, Naval District Washington, American Medical Response, and the U.S. Department of Labor.
[7] See NTSB Media Briefing 2 – PSA Airlines Bombardier CRJ700 & Sikorsky H-60 Military Helicopter Collision.
[8] Id.
[9] Id.
[10] Id.
[11] Id.
[12] See Washington Plane Crash: Investigators Release Cockpit Recordings (Feb. 1, 2025).
[13] See Aviation Investigation Preliminary Report, NTSB (2024).
[14] The Investigative Process, NTSB (2025).
[15] See, e.g., District of Columbia v. Hawkins, 782 A.2d 293 (D.C. 2001).
[16] See id. at 303; D.C. Code § 16-2701(b);
[17] See D.C. Code § 12-101; Hawkins, 782 A.2d at 304-05.
[18] Hawkins, 782 A.2d at 304-05.
[19] D.C. Code § 16-2702.
[20] D.C. Code § 12-301(3).
[21] 28 U.S.C. § 2674.
[22] Id.
[23] 28 U.S.C. § 2675(a).
[24] 28 U.S.C. § 2401(b).
[25] 28 U.S.C. § 2675(b).
[26] 28 U.S.C. § 1346(b) (emphasis added).
[27] 28 U.S.C. § 2401(b).
[28] 28 U.S.C. § 1402(b).
[29] See Makarova v. United States, 201 F.3d 110, 114 (2d Cir. 2000) (citing Richards v. United States, 369 U.S. 1, 10-15 (1962)).
[30] 28 U.S.C. § 2402.

Why Victims of Airplane Crashes Should Seek Guidance from a Licensed Pilot/Lawyer

Friday, January 31st, 2025

If You Are a Victim of a Plane Crash

If you or a loved one are the victim of a plane crash, it is crucial that you know and understand the following information to improve your chances of obtaining a successful outcome and hold those responsible accountable for your losses. Potentially responsible parties are extremely challenging to identify. They may include the pilot, airplane owner, charter operator, fueler, mechanics, and manufacturers to name a few.

Plane crashes often involve the most catastrophic polytrauma-type injuries – meaning they frequently involve brain injuries, loss of limbs, orthopedic injuries, tendon and muscle injuries, burns, and sometimes death.

If you or a loved one are involved in a plane crash, it is imperative that you do the following:

• Assess your injuries and any injuries to those in the plane and take immediate action to render first aid as necessary on the scene.
• As soon as it is safe to do so, call 911 or have someone else contact them and give the exact location of the crash and a preliminary report of the injuries.  Don’t hesitate to ask for an ambulance, helicopter, etc.
• Contact your family/employer/loved one to report the crash and request any aid from them that may be necessary.
• Unless necessary for the victims, do not alter anything at the scene of the crash before authorities arrive.
• Take or have someone take photos and videos of the scene of the crash including the position of the plane, its relationship to physical objects – such as buildings, roads, power lines, fences, etc. Be sure to get some photos taken at a fair distance from the crash site to give viewers a better overview of the scene.
• Also take photographs of any obvious injuries at the scene, if possible.
• If you are injured in any way, absolutely accept the offer of first responders to be transported to a trauma center to evaluate your condition. Plane crashes involve a tremendous amount of energy being transferred from the machinery to the human body. Victims often are injured in ways they do not at first appreciate but which could ultimately be life threatening.  Being checked out by qualified healthcare professionals is crucial.
• Once any injuries are stabilized and the accident scene is captured on video and/or in photos, contact an experienced aviation attorney with the necessary resources to send a “Go Team”[1] to the scene of the crash immediately. That team will be dispatched and preserve crucial evidence which could determine the facts necessary to prove who was responsible for the crash and what damage was caused to property and people. That team will interview witnesses, inspect the scene, retain a qualified accident reconstruction specialist, and even do aerial photographs if appropriate and necessary.

• Once you have received appropriate emergency care and your situation is stabilized, begin writing a journal to give to your attorney. The journal should contain all the facts you can recall before, during, and after the crash. Make sure to include details including any pain you have suffered, emotional trauma, and how the trauma and injuries have affected your life and those around you.
• As soon as possible, personally meet with your plane crash attorney and his or her team, at the hospital or some other mutually convenient location, to allow them to assess the facts of the crash and your injuries. These meetings are crucial and should occur as soon as possible after the crash.
• Gather any documents, emails, receipts, etc., available to show any written communication regarding the flight, payments, or any other details regarding the trip.

Plane Crashes Are Rare

Plane crashes involving scheduled commercial airlines are extremely rare. In fact, since 2009, there have been no commercial airline crashes in the United States and relatively few around the world.

Airlines enjoy the best safety records in the world compared to all other forms of transportation because of the intense safety measures in place to prevent such crashes. The standard in the industry is geared towards safety from the beginning of each participant’s involvement in aviation – whether the participant is a pilot, mechanic, flight attendant, ground personnel, etc.

Noncommercial airline aviation also enjoys an incredible safety record. During the last ten years, there has been a significant reduction in the number of crashes. This reduction has been largely due to improved technology (particularly electronics) which is readily available to pilots in the cockpit.

Nevertheless, plane crashes do occur and frequently involve catastrophic injuries to both passengers and people/property on the ground. The vast majority of crashes are ultimately linked to pilot error.

Why You Need an Attorney

The investigation necessary to determine the cause of a crash will often take months and could even take years. The National Transportation Safety Board (NTSB) is a U.S. organization given the primary role of investigating airplane accidents. The Federal Aviation Administration (FAA) is frequently involved in investigating accidents as well. State and local law enforcement are typically the first to arrive at an accident site and will secure the area until aviation experts arrive. The investigating authorities are very professional and generally treat accident victims quite well, but they are not involved in protecting the rights of the injured – nor are they interested in helping victims receive compensation for their injuries, lost wages, pain and suffering, etc. An aviation accident attorney/airplane crash attorney steps into the investigation to represent the interest of the injured individual or the estate of loved ones.

An attorney, who is also a licensed pilot, can effectively guide the victims of a plane crash through the daunting maze of obstacles when seeking to get compensation for horrific injuries or death.

Plane crashes are far more complicated than any other type of crash and should only be handled by an experienced aviation accident attorney who is knowledgeable about the Federal Aviation Administration’s Regulations. Make sure the attorney you select has handled similar crashes in the past. When you or your family select your personal injury attorney, make sure to thoroughly vet their biography to ensure they have the qualifications necessary to litigate against huge insurance companies and sophisticated plane manufacturers.

[1] Gentry Locke’s “Go Team” has over 100 years of experience in investigating catastrophic accidents. The team includes an airline transport rated pilot with over 5,000 hours flight time and an in house private investigator who has investigated hundreds of accidents over the years.

Corporate Transparency Act Enforcement Still Paused Despite SCOTUS Grant of Stay

Friday, January 24th, 2025

On January 23, 2025, the Supreme Court of the United States (SCOTUS) granted the Application for Stay filed by the government, led by Justice Alito—Justice Gorsuch concurring and Justice Jackson dissenting.

This Grant of Stay marks an end to the December 5, 2024 injunction preventing the Financial Crimes Enforcement Network (FinCEN) from enforcing the Corporate Transparency Act (CTA) issued by the United States District Court for the Eastern District of Texas, in Texas Top Cop Shop, Inc. v. McHenry, case No. 4:24–cv–478 (formerly Texas Top Cop Shop v. Garland) pending the appeal in the United States Court of Appeals for the Fifth Circuit. If the Fifth Circuit denies certiorari, the stay issued by SCOTUS shall terminate automatically—if certiorari is granted, the stay shall terminate upon the sending down of the judgement of SCOTUS.

In his concurrence, Justice Gorsuch notes that this Application for Stay by the Government should have been taken as an opportunity to resolve the question of whether a district court may issue universal injunctive relief—a point that has been argued by both sides.

In her dissent, Justice Jackson argues that the emergency relief granted by SCOTUS is not appropriate because the Government “failed to demonstrate sufficient exigency.” She defends her position by highlighting the expedited appeal schedule implemented by the Fifth Circuit and the self-imposed enforcement delay of nearly four years.

Under the Fifth Circuit Court of Appeals expedited schedule, briefing by the parties is due by February 28th, 2025, and oral arguments are set for March 3rd, 2025.

Despite this Grant of Stay, reporting obligations are still paused as noted in a January 24, 2025, update by FinCEN due to a separate nationwide injunction issued on January 7, 2025, in Smith v. U.S. Dept. of the Treasury, Case No. 6:24-cv-336-JDK, also by the United States District Court for the Eastern District of Texas.

The fate of the CTA is still unclear as these cases continue to work through the courts, but the Fifth Circuit Court of Appeals decision will likely shed more light on the future of enforcement for millions of reporting companies.

The Grant of Stay by SCOTUS can be found on their website: www.supremecourt.gov/opinions.

For more information regarding CTA reporting obligations and to stay up to date with changes to reporting obligations visit FinCEN’s website at www.fincen.gov/boi.

Photo from Respiro/Shutterstock.com

Employment Authorization Verification for U.S. Employers: Form I-9 Basics

Wednesday, January 22nd, 2025

In last year’s Presidential election, the problem of illegal immigration was often center stage. President-elect Trump made it clear that he would be aggressive in rounding up and deporting those who are not lawfully in the United States. During the first Trump Administration, the effort to combat illegal immigration included an increased use of workplace inspections of employers’ hiring records and practices by federal authorities.  There is every reason for employers to anticipate this same type of aggressive enforcement will be pursued following the second Trump inauguration.

A focus on workplace hiring practices should come as no surprise.  According to the United States Citizenship and Immigration Services (“USCIS”), the opportunity for employment is often the magnet that attracts people from all around the world to the United States. At times those who immigrate here work unlawfully. Federal law has long imposed rules that prohibit employers from knowingly recruiting, hiring or retaining persons who are in the US illegally and/or who do not have the right to work.

For example, in 1986 Section 274A of the Immigration and Nationality Act was revised to make it unlawful for employer to knowingly hire an alien who is not authorized to work in the United States or to continue to employ that person knowing that they are or have become unauthorized with respect to such employment.[1] Federal law also mandates that employers use the proscribed Form I-9 to verify the identity of every employee hired and to ensure they are not an unauthorized alien.[2] In this regard, it is illegal for a business to hire an employee, even someone who is a citizen, without properly and timely completing and maintaining a Form 1-9 for each employee.

All employers, regardless of their size,[3] must use the most recent version of Form I-9 to verify the identity and employment authorization for all new employees, including US citizens, hired after November 6, 1986, and for rehires or reverifications.[4] Federal law requires the new employee to complete and sign the Form I-9 on the first day of employment and the employer must then complete the form within three (3) business days of that date after first verifying the person’s identity and work authorization which requires the inspection of certain specified documents.

There are limited exceptions to this I-9 requirement. A Form I-9s is not required for the following categories of workers:

• Employees working outside the United States;
• Individuals employed by a contractor providing contract services (like an employee leasing or temporary agency);
• Independent contractors [5]; or
• Causal domestic service employees working in a private home where work is sporadic, irregular, or intermittent.

Completed Form I-9s are not filed with a government agency but must be retained by the employer and made available upon request for inspection by the Immigration and Customs Enforcement (“ICE”) division of U.S. Department of Homeland Security.  ICE has the authority to conduct an inspection of any employer’s hiring records at any time, it does not require a complaint. Employers will learn that an inspection will occur when it receives a notice of inspection. Employers are given at least three business days to respond.

When ICE inspects an employer’s hiring records, it is common for ICE to conduct on-site audits of Form I-9 documentation kept in an employer’s HR records.  Failure to correctly fill out the Form I-9 or other compliance failures can lead to significant civil fines.[6] As result, it is imperative that every employer periodically review and assess their hiring records to ensure compliance and to verify that there is a Form I-9 for every employe currently working[7] and there are acceptable documents to verify who the employee is and that he/she is authorized to work in the United States, including United States citizens and non-citizen nationals.

Form I-9 Basics

Form I-9 is a four-page form which has four components. This article summarizes some important Form I-9 information that every employer must know.

A. Section 1 – Employee Information and Attestation

The first section of Form I-9 must be completed by the newly hired employee (or someone assisting him/her). This is where the new hire provides personal information, attests to their identity and their eligibility to work in United States, and provides documents to allow the employer to verify the attestations.

• The employee must complete Section 1 no later than the first day of hire, that is, the first day of work for pay (hire date).
• Employees are given a list of acceptable documents, which is set forth on Page 2 of the Form I-9 and given up to three business days to provide documents that will allow the employer to verify the information in Section 1.
• Acceptable documents for verification fall into three categories: A, B and C. New hires must provide one document from List A (which proves identity and authorization to work), or one document from List B (identity) and one from List C (work authorization).
• The employee is not required to provide their social security number on a Form I-9, unless that employer is enrolled in E-Verify.[8]
• The employee is not required to provide an email address on their Form I-9.
• Employers must ensure that an English version of Form I-9 is completed and maintained but may provide and use the Spanish version for translation purposes.
• If the employee uses a preparer and/or translator in completing the Form I-9, the person providing assistance must complete the Certification on Page 3.

B. Section 2 – Employer Review and Verification

Section 2 is area completed by the employer and signed under penalty of perjury by an authorized representative (usually someone in HR) after examining the documents provided by the new hire, determining the documents appear to be genuine, and using the document(s) to verify the accuracy and completeness of information provided in Section 1 regarding the employee’s identity and work authorization information. Employers are required to record in Section 2 which documents are provided by the employee and examined by the authorized representative.

• Employers or their authorized representative must fill out and complete Section 2 within 3 business days of when an employment begins (the hire date).
• The employee must provide original documents, not copies of documents from the Acceptable Document list that will prove identity and work authorization. Documents on List A (such as a U.S. Passport or Permanent Resident Card (“Green Card”) satisfy both requirements.
• Employers cannot ask for employees for specific documentation from the list, newly hired employees must be allowed to choose which document(s) they will present from the list of acceptable documents. Nevertheless, if a document from List B is presented, the individual must also submit a document from List C.
• Employers must accept a document from the Acceptable list that reasonably appears to be original, genuine, and relates to the employee presenting it.
• Employers must examine a presented document in an employee’s physical presence, but employers enrolled in E-Verify may examine documents remotely.
• Employers may, in a case where the employee is authorized to work, accept a receipt showing that an employee has applied to replace a document that was lost, stolen, or damaged. When this occurs, it needs to be documented and the employee must present the original document with ninety (90) days of the hire date. A receipt that merely shows the employee has applied for an initial grant of employment authorization does not meet this exception and is not acceptable.
• Employers are not required to make photocopies of the presented documents. However, many do.  If an employer chooses to make photocopies of a presented document, it must do so for all Otherwise, it will be found to have engaged in an illegal hiring practice.[9]

C. Preparer and/or Translator Certification – Supplement A

Supplement A is completed in any situation were a preparer and/or translator assists an employee in completing Section 1. Each preparer and/or translator must complete, sign under penalty of perjury and date a separate certification area. Employers are required to maintain Supplement A with the employee’s completed Form I-9.

D. Reverifications and Rehires – Supplement B

It is not unusual that documents provided to establish work authorization have an expiration date. Employers are required to keep track of the expiration dates on employment authorization documents (referred to as EAD), and to take the steps required to reverify the employee’s work authorization before the original documents provided expire, but in no event later than three (3) business days after the expiration date.

• Employers should not reverify the following documents – U.S. Passports or passport cards, unexpired permanent resident or alien registration receipt card (Form I-551) or expired permanent resident card presented with form I-797, or List B documents.
• For employees rehired within three years of the date their Form I-9 was completed, an employer may choose to complete the applicable block on Supplement B or complete a new Form I-9.

E. Form I-9 Retention

Employers are required to maintain a properly completed Form I-9 as well as any photocopies (electronic images) made of the documents provided by the new hire, on each employee on the company’s payroll (if hired after November 6, 1986).  Likewise, employers must also retain Form I-9s (and copies of supporting documents if made at hire) for each former employee for the longer of three years after the date of hire or one year after the date of employment ends.

• To calculate how long to keep a former employee’s Form I-9: (i) for individuals who worked for less than two years, retain their Form 1-9 for three years after the date of hire, and (ii) for individuals who worked for more than two years, retain their Form I-9 for one year after the day they stop working for you.
• Employers can retain Form I-9s on paper, microfilm or electronically. You only need to keep the pages that the employer, employee, preparer and/or translator signed.  You do not need to keep Page 2 – the List of Acceptable Documents, or any blank supplemental pages.
• Paper forms must contain original handwritten signatures and may be stored off-site as long as the employer is able to present the Form I-9s within three business days of an inspection request by ICE, Department of Justice, or Department of Labor.
• If a paper Form I-9 form is completed, the original signed form (as well as any correction or update) can be scanned, uploaded, and retained electronically. Once properly scanned and securely saved in electronic form, the original paper form can be destroyed.
• There are specific requirements for any electronic system an employer chooses to use to either generate or retain completed Forms I-9, including without limitation, the ability to generate an indexing system that allows records to be identified and retrieved, and to reproduce legible and readable paper copies.
• There are specific requirements that must be met if an employer elects to complete Forms I-9 using electronic signatures, and employers who use these systems must maintain document of the business processes that create the retained I-9, modify and maintain the retained I-9 and establish the authenticity and integrity of the forms, such as audit trails.
• If documents provided by the employee are copied or scanned, those records must be kept with the I-9. Making copies does not take the place of completing the I-9 form.
• Never mail Form I-9s to USCIS or ICE, unless specifically requested by the federal agency.

F. Inspections

Employers are required to make the Forms I-9 available at your facility or at another location, such as a federal office designated by the federal agency involved. Refusal to comply or delays can lead to citations.  During an inspection, the employer must:

• Retrieve and present only the Forms I-9 and supporting documents specifically requested. Supporting documents include any audit trails that show the actions performed within or on the system during a given time period.
• Provide the inspecting officers the appropriate hardware, software, personnel, and documents needed to locate, retrieve, read, and reproduce any electronically stored Form I-9, any supporting documents and their associated audit trails, reports and other data used to maintain the authenticity, integrity, and reliability of the records.
• If requested, give the inspecting officer any reasonably available or obtainable electronic summary files (such as spreadsheets) containing all information fields on any electronically stored Form I-9.
• If you participate in E-Verify, you should provide the Form I-9 that contain the E-Verify case verification numbers. If those case number are not on the Form I-9, the provide the E-Verify Case Detail Pages during the inspection.

G. Other Provisions

It is not possible to address all issues here.  What follows is a summary of some keep points for what to do if errors or missing information is discovered.  For other questions, USCIS provides a helpful site, “Handbook for Employers, M-274” which is kept up to date on-line, and can be found at 14.0 Some Questions You May Have About Form I-9 | USCIS.

• If an employer discovers an error or missing information in Section 1, the employer should first ask the employee to correct the error or add the missing information. Only the employee, or his/her preparer and/or translator may correct errors or omissions made in Section 1.
• Any errors on a Form I-9 in Section 2 or Schedule B should be corrected by the appropriate person responsible for that section or supplement.
• Errors should be corrected by lining out the incorrect information, entering the correct information, and initialing and dating the corrected information.
• In addition, the employer should create and attach a written explanation of why the information was missing or needed correcting. If the employee’s employment has ended, a signed and dated statement identifying the error or omission should be attached to the existing form, and explain why the corrections could not be made, i.e., the employee no longer works for you.
• If the employer failed to enter the date it completed Section 2 or Supplemental B, the employer should not back date the form, but instead enter the current date and initial the date field.
• If there are multiple errors or substantial errors (such as Section 2 being completed based on unacceptable documents), then the section can be redone on a new Form I-9 which is then attached to the original, and a memo providing an explanation for why the changes were made or why a new I-9 was used attached.
• If changes are made to the Form I-9 do not conceal them, by example, erasing text or using correction fluid. Doing so can lead to increased liability under federal immigration laws.
• All Forms I-9 should be stored in a secure way and be made available within three days of an official request for inspection.

[1]  See generally 8 U.S.C. § 1324a. The provisions of the Immigration Reform and Control Act of 1986 added these provisions, and these provisions were further changed by the Immigration Act of 1990 and the Illegal Immigration Reform and Immigrant Responsibility Act of 1996.
[2] See § 1324a (b)(1).
[3] The obligation to use Form I-9s to verify the identity and authorization to work of employees applies to religious non-profit agencies and churches.
[4] The most recent Form I-9 has the revision date 8/1/2023 and expires on 5/31/2027. It can be found here https://www.uscis.gov/sites/default/files/document/forms/i-9.pdf.
[5] The misclassification of workers as independent contractors instead of employees has been a significant legal issue in many industries, and it is beyond the scope of this article.
[6] Civil fines can range from $272 to $2,701 for each missing I-9 for each employee, or for bad or missing paperwork, or in the case of intentional violates, the fines can range from $676 to $27,018 per worker.
[7] As discussed below, the duty to maintain a proper Form I-9 is not limited just to current employees, but also applies to former employees for specific time periods following separation.
[8] E-Verify is a free web-based service that is used to verify the employment eligibility of newly hired employees.
[9] This rule exists to limit the opportunity for discriminating against some individuals based on their national origin, citizenship or immigrant status in the I-9 and E-Verify process.   The Immigration and Nationality Act, as amended, prohibits four (4) forms of unlawful conduct: (i) unfair documentary practices, (ii) citizenship or immigration status discrimination in hiring, firing, or recruiting, (iii) national origin discrimination in hiring, firing or recruiting, and (iv) retaliation.

Photo from Mehaniq/Shutterstock.com

The Complaint Giveth, but the Amended Complaint Taketh Away: Supreme Court Rules on Federal Jurisdiction

Tuesday, January 21st, 2025

In Royal Canin U. S. A., Inc., v. Wullschleger, No. 23-677, 2025 U.S. LEXIS 365 (2025), the Supreme Court of the United States resolved a circuit split as to whether a plaintiff’s amendment of her complaint after the defendant’s proper removal to federal court can eliminate all federal claims and force remand to state court. This opinion, the Court’s first of 2025, clarifies that federal courts must remand if the amended complaint removes the basis for federal jurisdiction, even if jurisdiction existed at the time of removal.

The plaintiff, Ms. Wullschleger, sued Royal Canin in Missouri state court, alleging deceptive marketing practices surrounding Royal Canin’s prescription-only sale of a certain dog food. Her complaint alleged both state and federal claims. Royal Canin removed the case to federal court pursuant to 28 U.S.C. § 1441. But Wullschleger decided that she’d rather keep her state court forum than her federal law claims, so she amended her complaint to leave only state law claims. She then moved to remand the case to state court.

The district court denied Wullschleger’s motion, but the Eighth Circuit Court of Appeals reversed, holding that the plaintiff’s amendment of her complaint deleted any basis for federal jurisdiction. Because there was no longer a basis for original jurisdiction under 28 U.S.C. § 1331, there remained no basis for supplemental jurisdiction over the remaining state law claims under 28 U.S.C. § 1367. As a result, remand was appropriate.

The Eighth Circuit’s conclusion created a circuit split with other Courts of Appeals decisions that amendment of the complaint post-removal does not destroy a federal court’s jurisdiction. Thus, the Supreme Court faced a simple question: Is jurisdiction based on the well-pleaded complaint, as amended? Or, when removal is involved, is it based on the complaint as it stood at the time of removal?

The Supreme Court unanimously determined that, removal or not, where the complaint gives a federal court jurisdiction, the amended complaint may yet take it away. The Court’s rationale was grounded in the plain meaning of § 1367, other statutes, and numerous judge-made rules that draw no distinction for jurisdictional purposes between cases brought in federal court and cases removed there. Once the complaint is amended, federal jurisdiction depends on the amended complaint, not the initial complaint. Further, the plaintiff, as the master of the complaint, may control the forum by the claims she includes in her complaint—or by those she chooses to preserve in her amended complaint. Finally, the Court dismissed as dicta language from two of its prior cases that Royal Canin raised as evidence that post-removal amendment does not defeat jurisdiction.

The Court’s decision reinforces the plaintiff’s control over the forum, even after the defendant has properly removed. It also reinforces the principle that an amended complaint wipes the slate clean, particularly when it comes to ascertaining federal jurisdiction. Whether litigating in state or federal court, parties should be aware of the significance of an amended complaint and the options available to plaintiffs and defendants to select an advantageous forum or reconfigure the claims at issue.