What is the Residential Real Estate Rule?

FinCEN’s Residential Real Estate Rule took effect on December 1, 2025, with reporting obligations beginning March 1, 2026. The rule was designed to address money laundering risks in certain U.S. real estate transactions. It focused on non-financed residential purchases involving legal entities and trusts, particularly those structured as all-cash transactions.

To determine whether a transaction was reportable, parties were required to work through a step-by-step analysis. If certain elements were met, the transaction would have been subject to reporting. For transactions that met the reporting criteria, the rule required submission of detailed information to FinCEN, including:

• Identity of the seller and buyer
• Information about the transferee entity or trust
• Beneficial ownership details
• Individuals signing on behalf of the buyer
• Property and transaction details, including purchase price and method of payment

The rule also established a hierarchy to determine which party was responsible for filing a report. Responsibility generally fell first on closing or settlement agents, followed by other participants such as settlement statement preparers and title professionals.

What does this mean going forward?

FinCEN has acknowledged the Texas ruling and stated that reporting parties are not currently required to submit real estate reports and will not face liability for failing to do so while the ruling remains in place; however, this may change quickly. An appeal or other regulatory action could revive reporting requirements with little notice.

Businesses and advisors involved in residential real estate transactions should continue to monitor developments and remain prepared to adjust their processes if needed. In the meantime, now is a good time to revisit internal procedures and consider how reporting obligations would be implemented if reinstated.

If you have any questions regarding these changes or to seek counsel from our Real Estate & Construction group, please reach out to request a consultation or call us at 216-696-1422.

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The mailing date is critical in many legal contexts, particularly when a postmark serves as evidence that a document was properly and timely mailed. Most people recognize the importance of a postmark in connection with tax filings and payments to the IRS or state and local taxing authorities. However, the significance of a postmark extends well beyond tax matters and applies to a wide range of everyday situations in which formal proof of mailing can determine whether a legal deadline or obligation has been satisfied.

Under the new rules, if a person does not account for the additional time it may take for a mailing to receive a postmark, the item may be deemed late, potentially resulting in the waiver of important rights to which the mailing relates.

The presence of a postmark confirms that the USPS accepted custody of the mail piece and that the mail piece was in possession of the USPS on the identified date. As the Rule confirms, the postmark date does not necessarily indicate the first day the USPS had possession of the mail piece. Further, the evidence of a postmark does not imply that the USPS did not accept custody of the mail piece because the USPS does not postmark all mail in the ordinary course of operations.

A person mailing any time-sensitive item where a postmark is essential should consider doing the following to ensure the mailing was timely:

1. Requesting that the cashier at the retail (local) post office place a manual (local) postmark on the item to be mailed at the time the customer drops off the mail piece with the USPS;
2. Requesting a postage validation imprint (“PVI”) be placed on the mail, which indicates the date of acceptance; or
3. Purchasing a Certificate of Mailing or using Registered or Certified Mail to obtain a receipt that serves as evidence of mailing.

Any mail piece that is time sensitive, use either option 2 or option 3. Although it comes with a cost, it allows you to retain a record or proof of when the USPS first accepted possession of the mail piece.

If you have any questions regarding these changes or to seek counsel from our Taxation Group, please reach out to request a consultation or call us at 216-696-1422.

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The United States federal government officially shut down as of 12:01 am on Wednesday, October 1, 2025. The good news is that the Internal Revenue Service (IRS) does have a plan for operating during the government shutdown. The bad news is that the plan only involves keeping the agency open and operating at normal capacity for the first five days of the shutdown.

The American Institute of Certified Public Accountants (AICPA) has urged the IRS to keep all IRS agents working during the entire shutdown, citing the negative impacts the shutdown of the agency would cause for taxpayers nationwide.

However, the IRS has indicated that they will not be giving taxpayers any extensions of the following deadlines despite the shutdown: 1.) Extended 2024 individual tax returns are still due by October 15, 2025; 2.) Tax-exempt organization returns are still due November 17, 2025; and 3.) Expatriate tax returns are still due by December 15, 2025. 

Additionally, all taxpayers should assume that the Taxpayer Advocate Service (TAS) center will be negatively impacted by the government shutdown as well. The Taxpayer Advocate Service is critical for taxpayers facing serious issues in dealing with IRS disputes.

If you have any questions regarding the contents of this legal advisory or to seek counsel from our Taxation group, please reach out to request a consultation or call us at 216-696-1422.

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Required minimum distributions (RMDs) are payments generally made by year end.  However, under the statutory provisions, individuals who turned 73 in calendar year 2024 are permitted to delay their first RMD until April 1, 2025.  The special rule applies to IRA owners and participants born after December 31, 1950.

The April 1 RMD deadline only applies to the first-year payment obligation. In subsequent years, the distribution must be made by December 31.

Taxpayers receiving their first required distribution for 2024 and 2025 (by April 1) must also take their second RMD required for calendar year 2025 by December 31, 2025.  Both distributions are taxable in calendar year 2025 and are reported on the individual’s 2025 income tax return.  (If a participant who turned 73 in 2024 and received their RMD in 2024, then this special double up rule is not applicable to them but rather they are only required to take the 2025 RMD by December 31, 2025.)

Note, there is a major exception for Roth IRAs that are not subject to the required minimum distribution rules.

The April 1 deadline applies to all traditional IRA owners as well as most employer retirement plan participants.  There is an exception for employer plans who may be able to delay their RMD under the special exception.  The exception applies to those participants that can delay until April 1 after retiring to receive distributions from their employer plan if the plan permits it.  This exception does not apply to 5% business owners or to participants in a SEP or Simple IRA plan.

Public school employees and certain tax-exempt organization staff with pre-1987 403(b) plan accruals should consult their employer, plan administrator, or provider for guidance on handling these accruals.

If you have any questions regarding these very complicated rules, or to seek counsel from our Taxation group, please reach out to request a consultation or call us at 216-696-1422

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The following information details the list as announced by the IRS. The official notice for this year’s “Dirty Dozen” can be found on the IRS website.

(1) Email Phishing Scams

The IRS continues to see a barrage of email and text scams targeting taxpayers and others. Taxpayers and tax professionals should be alert to fake communications from entities posing as legitimate organizations in the tax and financial community, including the IRS, state tax agencies and tax software companies. These messages arrive in the form of unsolicited texts or emails to lure unsuspecting victims into providing valuable personal and financial information that can lead to identity theft. There are two main types:

• Phishing: An email sent by fraudsters claiming to come from the IRS. The email lures the victims into the scam with a variety of ruses such as enticing victims with a phony tax refund or threatening them with false legal or criminal charges for tax fraud.
• Smishing: A text or smartphone SMS message where scammers often use alarming language such as, “Your account has now been put on hold,” or “Unusual Activity Report,” with a bogus “Solutions” link to restore the recipient’s account. The promise of unexpected tax refunds is another potential tactic used by scam artists.

As a reminder, never click on any unsolicited communication claiming to be from the IRS as it may surreptitiously load malware. This may also be a way for malicious hackers to load ransomware that keeps the legitimate user from accessing their system and files.

The IRS has special information available to help people understand and report email scams.

(2) Bad Social Media Advice

Another growing concern in 2025 continues to involve incorrect tax information on social media that can mislead honest taxpayers with bad advice, potentially leading to identity theft and tax problems. Social media platforms routinely circulate inaccurate or misleading tax information, including on TikTok where people share wildly inaccurate tax advice. Some involve urging people to misuse common tax documents like Form W-2.

The IRS and CASST warn people not to fall for these scams, and urge them to follow trusted social media advice from the IRS, tax professionals and other reputable sources. The IRS reminds taxpayers who knowingly file fraudulent tax returns that they could potentially face significant civil and criminal penalties.

(3) IRS Individual Online Account Help from Scammers

Swindlers can pose as a “helpful” third party and offer to help create a taxpayer’s IRS Individual Online Account at IRS.gov. In reality, no help is needed, and the agency offers tips on how to sign up and avoid scams. The IRS Individual Online Account provides taxpayers with valuable personal tax information. But watch out: Third parties making these offers will try to steal a taxpayer’s personal information and try to submit fraudulent tax returns in the victim’s name to get a big refund.

(4) Fake Charities

Bogus charities are a perennial problem that can intensify whenever a crisis or natural disaster strikes. Scammers set up these fake organizations to take advantage of the public’s generosity. They seek money and personal information, which can be used to further exploit victims through identity theft.

Taxpayers who give money or goods to a charity might be able to claim a deduction on their federal tax return if they itemize deductions, but charitable donations only count if they go to a qualified tax-exempt organization recognized by the IRS.

(5) False Fuel Tax Credit Claims

A major concern during the past year involved taxpayers who were misled into believing they were eligible for the Fuel Tax Credit. The credit is meant for off-highway business and farming use and is not available to most taxpayers. However, unscrupulous tax return preparers and promoters, including people on social media, continue enticing taxpayers into inflating their refunds by erroneously claiming the credit. The IRS has seen an increase in the promotion of filing certain refundable credits using Form 4136, Credit for Federal Tax Paid on Fuels. The IRS urges people to get more information and ensure they are properly claiming this credit.

(6) Credits for Sick Leave and Family Leave

This specialized credit is available for self-employed individuals for 2020 and 2021 during the pandemic; the credit is not available for later tax years. The IRS is seeing repeated instances where taxpayers are using Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, to incorrectly claim a credit based on income earned as an employee and not as a self-employed individual.

(7) Bogus Self-Employment Tax Credit

Social media advice continues to circulate about a non-existent “Self-Employment Tax Credit” that’s misleading taxpayers into filing false claims. Promoters market it as a way for self-employed people and gig workers to get big payments for the COVID-19 pandemic period. Similar to misleading marketing around the Employee Retention Credit, there is inaccurate information being circulated that suggests many people qualify for the tax credit and payments of up to $32,000 when they actually do not.

In reality, the underlying credit being referred to in social media is not called the “Self-Employment Tax Credit,” it’s a much more limited and technical credit called the Credits for Sick Leave and Family Leave. Many people simply do not qualify for these credits, and the IRS is closely reviewing claims coming in under this provision, so taxpayers filing claims do so at their own risk.

(8) Improper Household Employment Taxes

Taxpayers “invent” fictional household employees and then file Schedule H (Form 1040), Household Employment Taxes, to claim a refund based on false sick and family medical leave wages they never paid.

(9) The Overstated Withholding Scam

This is a recent scheme circulating on social media encouraging people to fill out Form W-2, Wage and Tax Statement, or other forms like Form 1099-NEC and other 1099s with false income and withholding information.

In this overstated withholding scheme, scam artists suggest people make up large income and withholding amounts as well as the fictional employer supplying those amounts. Scam artists then instruct people to file the bogus tax return electronically in hopes of getting a substantial refund due to the large amount of fraudulent withholding.

If the IRS cannot verify the wages, income or withholding credits entered on the tax return, the tax refund will be held pending further review. Taxpayers should always file a complete and accurate tax return. They should only use legitimate information returns, such as an employer issued Form W-2, to complete returns correctly.

There are multiple variations of the overstated withholding credit scheme, including those involving Forms W-2 and W-2G; Forms 1099-R, 1099-NEC, 1099-DIV, 1099-OID and 1099-B; as well as the Alaskan Dividend Fund, Schedule K-1 with Withholding Reported, and Unspecified Source of Withholding Credit Claimed.

(10) Misleading Offers in Compromise

The Offers in Compromise (OIC) program is an important program that helps people settle their federal tax debts when they are unable to pay in full. But “mills” can aggressively promote Offers in Compromise in misleading ways to people who clearly don’t meet the qualifications, frequently costing taxpayers thousands of dollars. A taxpayer can check their eligibility for free using the IRS Offer in Compromise Pre-Qualifier tool.

(11) Ghost Tax Return Preparers

Most tax preparers provide outstanding and professional service. However, people should be careful of shady tax professionals and watch for common warning signs, including charging a fee based on the size of the refund. A major red flag or bad sign is when the tax preparer is unwilling to sign the return. Avoid these “ghost” preparers, who will prepare a tax return but refuse to sign or include their IRS Preparer Tax Identification Number (PTIN) as required by law. Taxpayers should never sign a blank or incomplete return. Instead, the IRS reminds taxpayers to turn to a trusted tax professional for help.

(12) New Client Scams and Spear Phishing

In 2025, the IRS continues to see the “new client” scam, which involves spear phishing attempts that target tax pros. Cybercriminals impersonate new, potential clients to trick tax professionals and other businesses into responding to their emails. Once the tax pro responds, the scammer sends a malicious attachment or URL that can compromise the preparer’s computer systems and allow the attacker to access sensitive client information.

Phishing is a term given to emails or text messages designed to get users to provide personal information, and spear phishing is a phishing attempt tailored to a specific organization or business. Tax professionals frequently find themselves a target of this type of scam. Spear phishing holds greater potential for harm because a successful spear phishing attack can ultimately steal client data and the tax pro’s identity, allowing the thief to file fraudulent returns using the stolen information.

Businesses and individuals, including tax pros, should always be cautious and look out for any suspicious requests or unusual behavior before sharing any sensitive information or responding to an email. Warning signs include poorly constructed sentences and unusual word choices. Be aware that by gaining access to a hacked email account, scammers can locate a genuine email from a previous victim’s email account sent to their tax professional.

The IRS emphasizes that beyond the “Dirty Dozen,” there are numerous other abusive schemes and false tax avoidance strategies that can be deceiving. For more information on past schemes, taxpayers can visit the dedicated “Dirty Dozen” section on IRS.gov. This list serves as a critical alert to both taxpayers and tax professionals about potential scams and schemes to watch out for.

For more information or to seek counsel from our Taxation group, please reach out to request a consultation or call us at 216-696-1422.

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According to the CDC, salmonella bacteria cause a disease known as salmonellosis. Common symptoms include diarrhea, fever, and stomach cramps. Symptoms can begin between six hours and six days after the bacteria is ingested. These symptoms can lead to other medical problems such as dehydration, which can lead to hospitalization in severe cases. In even more severe cases, infection can spread to blood, joints, or organs and lead to septic arthritis and other long-term consequences.

McCarthy Lebit attorney Colin R. Ray is currently investigating the Jif salmonella outbreak and has been retained by some of those who have been hospitalized with symptoms consistent with salmonella infection after unknowingly eating recalled Jif peanut butter. Compensation for those injured by tainted foods often includes payment for hospital bills, pain and suffering, and other expenses incurred as a result of illness. Colin typically investigates and handles such cases on a no-obligation basis with no legal fees unless there is a recovery. Those who may have been sickened by tainted peanut butter or other food products can contact Colin for a free, no-obligation evaluation of their legal options. Please reach out to request a consultation or call us at 216-696-1422.

Additional Reading:

“Outbreak Investigation of Salmonella: Peanut Butter (May 2022),” United States Food and Drug Administration

“Questions and Answers,” Salmonella Homepage, United States Centers for Disease Control and Prevention

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The Act will have wide-standing implications in the field of employment litigation.

The Act amends the Federal Arbitration Act (the “FAA”), Title 9 of the United States Code, with respect to the arbitration of disputes involving sexual assault and sexual harassment. A sexual assault dispute is broadly defined as a dispute involving a nonconsensual sexual act or sexual contact, including when the victim lacks capacity to consent. Likewise, a sexual harassment dispute is broadly defined as a dispute relating to conduct that is alleged to constitute sexual harassment under applicable federal, tribal, or state law.

In general, the Act states that, at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, or the named representative of a class or in a collective action alleging such conduct, no pre-dispute arbitration agreement or pre-dispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under federal, tribal, or state law and relates to the sexual assault dispute or the sexual harassment dispute.

Of course, pre-dispute arbitration agreements are frequently found in employment agreements and such arbitration agreements typically require arbitration of employment-based claims involving quid pro quo sexual harassment, hostile work environment based on sex, and retaliation claims based on reporting sexual harassment and participating in investigations of sexual harassment. Those types of employment-based claims would now fall within the Acts prohibition of forced arbitration of sexual assault and sexual harassment claims in the workplace.

The determination of whether the Act applies with respect to a dispute shall be determined under Federal law by a federal or state court, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement, and irrespective of whether the agreement purports to delegate such determinations to an arbitrator. Further, under the FAA, states are prohibited from passing or enforcing laws which are inconsistent with the FAA.

Update on Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act – March 4, 2022

On March 3, President Biden officially signed H.R.4445. The law went into effect immediately upon signing, effectively voiding any mandatory arbitration clauses in Employment Agreements when it comes to claims of sexual harassment or assault in the workplace. Employers are strongly advised to consult with legal counsel for full review and revision of existing employment agreements and should immediately negotiate the conclusion of any active or in progress arbitrations in these matters.

For more information or assistance, please reach out to request a consultation or give us a call at 216-696-1422.

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How Did We Get Here?

OSHA published its ETS on November 4, 2021. Almost immediately thereafter, several states, employers, and nonprofit organizations challenged its enforceability, and the Fifth Circuit Court of Appeals initially issued a stay of enforcement and implementation of OSHA’s vaccination/testing mandates.

However, because many different parties challenged OSHA’s ETS in many different federal courts, a special judicial panel consolidated the cases and selected the Sixth Circuit Court of Appeals—via a lottery system—to hear them all. On December 17, 2021, the Sixth Circuit lifted the Fifth Circuit’s stay.

Multiple parties immediately challenged the Sixth Circuit’s decision by filing petitions with the Supreme Court. On January 13, 2022, the Supreme Court issued its decision staying implementation of the ETS until the Sixth Circuit reaches a final conclusion on the enforceability of OSHA’s ETS.

What Was the Supreme Court Rationale?

The Supreme Court’s majority opinion concluded that (1) the parties challenging OSHA’s ETS were likely to succeed on the merits and that (2) OSHA’s enforcement of the ETS must be placed on hold until the Sixth Circuit reached a final decision on the merits.

In coming to this conclusion, the Supreme Court noted that Congress created OSHA when it passed the Occupational Safety and Health Act of 1970 (the “Act”). Therefore, OSHA only has those powers that Congress expressly provided for in the Act.

According to the Supreme Court’s ruling, the Act only permits OSHA to regulate matters of workplace/occupational safety. Although COVD-19 impacts the workplace, it is not a workplace-specific risk. Instead, it is a disease that spreads everywhere including in schools, at sporting events, and any other place where people gather. In other words, COVID-19 is a general health risk—not just an occupational risk—and it reaches areas that fall outside OSHA’s area of expertise.

As the Supreme Court put it: “Permitting OSHA to regulate the hazards of daily life—simply because most Americans have jobs and face those same risks while on the clock—would significantly expand OSHA’s regulatory authority without clear congressional authorization.”

Justices John Roberts, Amy Coney Barrett, and Brett Kavanaugh issued the Supreme Court’s decision, and Justices Samuel Alito, Neil Gorsuch, and Clarence Thomas authored a concurring opinion.

The liberal wing of the Supreme Court—consisting of Justices Sonia Sotomayor, Stephen Breyer, and Elena Kagan—dissented. The dissenting justices indicated that the Act demands OSHA to issue emergency temporary regulations when (1) “employees are exposed to grave danger…from new hazards” and (2) an “emergency standard is necessary to protect employees from such danger.”

Noting that COVID-19 constitutes a new hazard that poses a grave danger to millions of employees and noting that tests, face coverings, and vaccinations serve as proven methods to address that danger, the dissenting justices opined that the Act actually requires OSHA to issue regulations related to COVID-19 and the workplace.

What Comes Next?

The Supreme Court’s decision is not the final word on this matter. Instead, it merely stays implementation/enforcement of the ETS until the Sixth Circuit can fully review challenges to the ETS.

The Supreme Court did opine, however, that the parties challenging the ETS were likely to prevail. For this reason, OSHA may—in an effort to address the Supreme Court’s concerns about the extent of the agency’s powers—issue a more narrow/limited set of workplace COVID-19 regulations.

More Insight from McCarthy Lebit on the “Vaccine Mandate”

Ann-Marie Ahern & Jack Moran Discuss President Biden’s Vaccine Mandate

Listen to Employment Litigators Ann-Marie Ahern and Jack Moran from a recent episode of our podcast – The More Report, Podcast Edition – as they discuss the viability of the “vaccine mandate” in the face of probable legal challenges.

Sixth Circuit’s Reversal of Fifth Circuit’s Stay of OSHA ETS

Check out the previous legal advisory from Frank George, published on December 22, 2021, to read more about details, highlights, and updates on OSHA’s ETS.

OSHA Releases COVID-19 Vaccine Rules but U.S. 5th Circuit Blocks Them

Check out the previous legal advisory from Frank George, published on November 9, 2021, to read more about details, highlights, and updates on OSHA’s ETS.

The post LEGAL ADVISORY: Supreme Court Blocks Enforcement of OSHA ETS appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

Although enforcement of the ETS was briefly stayed/suspended, the Sixth Circuit Court of Appeals dissolved the stay on December 17, 2021, and OSHA has published a new compliance deadline of January 10, 2022.

A Brief Recap of Legal Challenges to the ETS

OSHA issued its ETS on November 4, 2021. Almost immediately thereafter, several states and employers challenged its enforceability, and by November 12, the Fifth Circuit Court of Appeals had issued a stay of enforcement and implementation of OSHA’s vaccination/testing mandates.

Because many different parties challenged OSHA’s ETS in many different federal courts, a special judicial panel consolidated the cases and selected one federal appellate court—via a lottery system—to hear them all. The Sixth Circuit Court of Appeals won this lottery on November 16, 2021.

Then, on November 23, 2021, OSHA filed a motion with the Sixth Circuit requesting that it dissolve the stay issued by the Fifth Circuit. And, last Friday, the Sixth Circuit found in OSHA’s favor.

In reaching this conclusion, the Sixth Circuit reasoned that OSHA has the authority to regulate viruses and infectious diseases that create risks in the workplace. It further reasoned that OSHA’s ETS was enforceable, given that the agency stated sufficient justifications to conclude that COVID-19 posed a grave danger to employees.

OSHA’s Newly Published Compliance Deadlines

After the Sixth Circuit’s decision, OSHA published new compliance deadlines on its website.

The ETS generally requires employers to either institute a mandatory vaccination policy or implement weekly COVID-19 testing for unvaccinated employees. As of now, employers who intend to mandate vaccines must comply with the ETS by January 10, 2022, while employers who opt to test unvaccinated employees must comply by February 9, 2022.

It must be noted, however, that multiple parties have already challenged the Sixth Circuit’s decision by filing petitions with the Supreme Court of the United States. It is widely expected that the Supreme Court will take action by January 10, 2022, so as to provide clarity before the ETS’ current compliance deadlines.

Businesses Should Take Action and Prepare to Comply with the ETS

The Supreme Court has not rendered a final decision with respect to the ETS’ enforceability. As it currently stands, though, businesses are required to take near immediate action to comply with OSHA’s vaccination/testing mandates.

Businesses should know that the ETS requires employers to implement a mandatory vaccination policy, unless employers instead enforce a mandatory weekly COVID-19 testing requirement for unvaccinated employees. The ETS also requires businesses to maintain proof of employees’ vaccination status, provide employees paid time to receive the vaccine, implement face-covering policies for unvaccinated workers, and distribute information regarding the ETS to employees.

If your business employs at least 100 employees, McCarthy Lebit encourages you to contact our office for advice and counsel regarding your compliance with these regulations.

Update (12/23/2021): SCOTUS Agrees to Fast Track Legal Challenges to OSHA ETA

The Supreme Court of the United States announced Wednesday evening that it will hear oral arguments in cases appealing the legality of OSHA’s ETS on January 7 — a surprise expedited process that could signal the Court’s intention to act quickly to resolve the legal challenges. For the moment, the OSHA rule (and the subsequent guidance on revised compliance deadlines) remains in effect, as SCOTUS has not made any move to stay the rule, pending its own judicial review. It is not clear whether the Justices will accept any motions to reinstate the Fifth Circuit’s stay of the rule, so employers would be wise to continue making plans for compliance ahead of the January 10 deadline.

More Insight from McCarthy Lebit on the “Vaccine Mandate”

Ann-Marie Ahern & Jack Moran Discuss President Biden’s Vaccine Mandate

Listen to Employment Litigators Ann-Marie Ahern and Jack Moran from a recent episode of our podcast – The More Report, Podcast Edition – as they discuss the viability of the “vaccine mandate” in the face of probable legal challenges.

LEGAL ADVISORY: OSHA Releases COVID-19 Vaccine Rules but U.S. 5th Circuit Blocks Them

Check out Frank George‘s previous legal advisory for more details, highlights, and updates on OSHA’s ETS.

The post LEGAL ADVISORY: Sixth Circuit’s Reversal of Fifth Circuit’s Stay of OSHA ETS appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

On November 4, 2021, the Occupational Safety and Health Administration (OSHA) issued an emergency temporary standard (ETS), which applies to most businesses with 100 or more employees and introduces COVID-19 rules. These newly issued federal regulations require many employers to maintain mandatory vaccination and/or testing policies.

OSHA’s ETS became effective immediately upon its issuance, but covered employers are afforded 30 days to develop a mandatory vaccination policy and 60 days to comply with testing requirements. If your business employs at least 100 employees, McCarthy Lebit encourages you to contact our office for advice and counsel regarding these regulations. Read the full text of the rules here.

Highlights from the OSHA COVID-19 ETS

• OSHA has determined that unvaccinated workers face serious danger, that vaccinations and/or regular COVID-19 tests are necessary measures to take in order to protect against this danger, and that employers with 100 or more employees have the administrative capacity to implement vaccination and/or testing policies.
• The ETS requires employers to implement a mandatory vaccination policy, unless employers instead enforce a mandatory weekly COVID-19 testing requirement for unvaccinated employees.
• Among other things, the ETS also requires businesses to:
  • Maintain proof of employees’ vaccination status;
  • Provide employees paid time to receive the vaccine and recover from any side effects;
  • Implement mandatory face-covering policies for unvaccinated workers; and
  • Distribute information regarding the ETS to employees.

Because businesses are expected take immediate action to comply with OSHA’s newly issued ETS, contact McCarthy Lebit as soon as possible for more information.

U.S. Fifth Circuit: Not So Fast!

It took just a day-and-a-half for OSHA’s ETS to be blocked by a federal appeals court. On Saturday, November 5, a 3-judge panel from the U.S. Court of Appeals for the Fifth Circuit granted an emergency stay of the OSHA requirement that workers be vaccinated by Jan. 4 or face mask requirements and weekly tests.

In response to the ETS, more than two dozen states, businesses, business groups and religious organizations have sued, calling the rule issued by the Occupational Health and Safety Administration an overreach of government authority, with most arguing that OSHA lacks the legal standing to issue a rule in response to a society-wide health concern, and even if reducing the risk of COVID-19 “remains a compelling interest,” it is not necessarily a “grave danger” as OSHA has declared it to be. The plaintiffs also questioned the timing of the rule, coming more than a year-and-a-half into the pandemic, when many employers have already implemented safety measures and COVID cases are falling.

In issuing a stay on Saturday, the 5th Circuit Court of Appeals, based in New Orleans, said the petitions “give cause to believe there are grave statutory and constitutional issues with the Mandate.”

Biden Administration Response Late Monday

In an expedited reply to the motion for a permanent injunction Monday, Biden administration officials warned that maintaining the stay “would endanger many thousands of people,” as the death toll from COVID continues to hover around 1,300 people per day nationally.

“With the reopening of workplaces and the emergence of the highly transmissible Delta variant, the threat to workers is ongoing and overwhelming,” the administration argued, while dismissing the legal objections that led to the stay as lacking merit. In fact, the White House is urging companies to ignore the stay and continue implementing rule compliance.

What’s Next For the Legal Challenges?

Because there are challenges to the OSHA rule in multiple circuit courts — including the 5th, 6th, 7th, 8th, 11th and D.C. Circuits, federal law dictates that the cases be consolidated and heard by one federal appeals court, chosen by lottery. That lottery could take place on or around Nov. 16, according to the U.S. Department of Justice. Ultimately, the case could end up at the Supreme Court. Meanwhile, petitioners in the Fifth Circuit Case have until 5pm Tuesday, November 9 to file a reply to the government’s response.

UPDATE (11/12/2021): Fifth Circuit Stays Biden Mandate

On Friday, November 12, the Fifth Circuit Court of Appeals agreed to issue a stay of enforcement and implementation of the OSHA’s ETS.  In their 22-page opinion and ruling, the Court made reference to several reasons why the ETS should be stayed pending additional review, including suggesting that the ETS was unconstitutional under the Commerce Clause and non-delegation doctrine. Even if the ETS could survive a constitutional challenge, the court went on to hold that COVID-19 was not the proper subject of emergency administrative action by OSHA. Pending further review, this ruling effectively invalidates the ETS, since OSHA is now barred from implementing or enforcing the standard.

UPDATE (11/16/2021):  Six Circuit Wins Lottery to Hear Consolidated Challenge to OSHA ETS

The U.S. Judicial Panel on Multidistrict Litigation held a lottery on November 16 that named the Sixth Circuit Court of Appeals, an overwhelmingly  conservative court (11 of 16 sitting Judges were appointed by Republicans), will take up the 34 lawsuits now consolidated into one case.  The Court has not yet scheduled oral arguments or assigned judges who will hear the cases, though at least one challenger has filed for en banc consideration by the Court – meaning the entire bench of 16 judges would hear the cases.

It is not immediately clear whether the transfer of the cases will override the injunction issued by the Fifth Circuit. Still, because the ETS is not scheduled to go into effect until January 4, 2022, there is no change to existing policy at this time.

Update (11/17/2021): OSHA Suspends Enforcement of ETS Pending Judicial Review 

In perhaps the first sign by the Biden administration that they may not emerge victorious from the mounting legal challenges to the ETS after the 6th Circuit Court of Appeals was awarded the consolidated legal challenges via a lottery of the courts conducted by the Department of Justice, OSHA has announced they are officially suspending enforcement of the ETS pending further judicial review.

What Can/Should You Do Next?

As with all things COVID, uncertainty is the only certainty today.  Employers should stay up to date on litigation developments and continue to prepare themselves for the possibility of the ETS going into effect in the near future. Essentially, employers should continue preparing final vaccination policies, compliance policies, communications plans, and a process to track and store confidential details about an employees’ vaccination status.

That said, federal contractors and healthcare employers should continue to comply with their separate federal COVID-19 requirements, which have not been stayed in the OSHA ETS litigation.  If you’re in doubt about where your business falls, please reach out to any of our employment law attorneys for a consultation.

More Insight from McCarthy Lebit on the “Vaccine Mandate”

Ann-Marie Ahern & Jack Moran Discuss President Biden’s Vaccine Mandate

Listen to Employment Litigators Ann-Marie Ahern and Jack Moran from a recent episode of our podcast – The More Report, Podcast Edition – as they discuss the viability of the “vaccine mandate” in the face of probable legal challenges.

The post LEGAL ADVISORY: OSHA Releases COVID-19 Vaccine Rules but U.S. 5th Circuit Blocks Them appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.