Visit regularly for up-to-date information on relevant news, firm announcements and additions to our AZ Health Law Blog.
The Best Lawyers in America© is the longest-running, peer-review publication in the legal profession. Every year, Best Lawyers conducts comprehensive surveys of tens of thousands of lawyers who confidentially evaluate their professional peers. Based on the results of these surveys, the publication designates the year’s leading lawyers in all 50 states and the District of Columbia.
The Milligan Lawless attorneys recognized in the 2021 edition are:
2021 Best Lawyers
2021 Best Lawyers: Ones To Watch
Part 1 of this series explained the changed landscape of M&A due to the COVID-19 pandemic, and discussed five areas where the pandemic has affected the terms of M&A transactions. In this segment, we will discuss practical considerations for entities who are contemplating a sale, whether during or after the pandemic.
The COVID-19 pandemic has dramatically changed the M&A market. However, the pandemic also presents an opportunity for prospective sellers to improve their position for a future M&A sale. If you have any questions regarding any M&A issues, the business transactions team at Milligan Lawless is here to assist. Please contact Steve Lawrence at 602-792-3635 or firstname.lastname@example.org or Miranda Preston at 602-792-3511 or email@example.com.
 The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020 and created the Paycheck Protection Program (“PPP”), a forgivable small business loan program; and authorized additional funding for the Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL) program, among other features.
 Additional information from Milligan Lawless on the CARES Act and PPP is available here: The CARES Act – Paycheck Protection Program Loan (Mar. 28, 2020); Paycheck Protection Program Loan Forgiveness (Mar. 29, 2020); Update on CARES Act: SBA Implements Interim Final Rule for Paycheck Protection Program Loans (Apr. 3, 2020); CARES Act Provider Relief Fund Distributions (Apr. 14, 2020); Update on CARES Act Provider Relief Fund General Distributions (Apr. 30, 2020); and Congress Passes Favorable Amendments to the Payroll Protection Program (Jun. 5, 2020).
The COVID-19 pandemic has impacted all aspects of business in the United States, M&A transactions in particular. The global IPO market ground to a halt in March of 2020, and corresponding developments in the M&A market were felt almost immediately. By the end of March 2020, M&A levels for the first quarter of 2020 had fallen by more than 50% compared to levels for the first quarter of 2019. Many companies and private equity buyers moved away from the deal market in an effort to preserve jobs, customers and resources. For example, Xerox ceased its $35 billion takeover bid for HP, SoftBank terminated a $3 billion tender offer for WeWork stock and Hexcel and Woodward ceased discussions on a $6.4 billion merger of equals.
Private company transactions were also impacted – a recent study of private company deals valued at less than $2 million found that 46% of deals were delayed and 11% were cancelled as a result of the pandemic. Some transactions involving the acquisition of physician practices that primarily perform elective procedures were delayed or cancelled altogether following the suspension of the performance of elective procedures. The pandemic caused the re-evaluation of the terms of M&A transactions. Transactions are still occurring, but in many cases the pandemic has caused the parties to agree to modified terms and conditions. This article highlights five areas where the pandemic has affected the terms of M&A transactions. The second part of this two-part series will discuss actions prospective sellers can take in the face of the pandemic to optimize their position as targets for acquisition.
The COVID-19 pandemic has wreaked havoc on the U.S. economy; the M&A market is not immune to the pandemic’s negative impact. That said, some M&A activity has continued unabated, though the terms of such deals and the associated risks look markedly different than they did pre-pandemic. For information about the steps that prospective sellers can take to better position themselves when the time comes for a sale, stay tuned for part two of this series. If you have any questions regarding any M&A issues, the business transactions team at Milligan Lawless is here to assist. Please contact Steve Lawrence at 602-792-3635 or firstname.lastname@example.org or Miranda Preston at 602-792-3511 or email@example.com.
 Jens Kengelbach, Jeff Gell, Georg Keienburg, Dominik Degen and Daniel Kim, COVID-19’s Impact on Global M&A, Boston Consulting Group, March 26, 2020.
 Richard Harroch, The Impact of the Coronavirus on Mergers and Acquisitions, Forbes, April 17, 2020.
 Cara Lombardo, Xerox Is Ending Hostile Takeover Bid for HP, The Wall Street Journal, April 1, 2020; Peter Eavis, SoftBank Won’t Buy $3 Billion in WeWork Stock, New York Times, April 1, 2020; Reuters, Aero Suppliers Hexcel and Woodward Scrap Deal as Coronavirus Pummels Industry, April 6, 2020.
 Market Pulse Report, Pepperdine Graziadio Business School, April 29, 2020.
 For example, in the context of the sale of a physician practice, where a portion of the purchase price is paid as an earn-out, if the owners of the seller will refer any patients to the buyer post-closing, the Stark Law and the Anti-Kickback Statute may be implicated.
 See Akorn, Inc. v. Fresenius Kabi AG, No. CV 2018-0300-JTL, 2018 WL 4719347, at *53 (Del. Ch. Oct. 1, 2018), aff’d, 198 A.3d 724 (Del. 2018) (citing Hexion Specialty Chemicals, Inc. v. Huntsman Corp., 965 A.2d 715 (Del. Ch. 2008) at 738 (stating “A buyer faces a heavy burden when it attempts to invoke a material adverse effect clause in order to avoid its obligation to close”).
On August 3, 2020, a federal court in New York state struck down portions of the regulations implementing the Families First Coronavirus Response Act (“FFCRA”). In litigation brought by the state of New York against the United States Department of Labor (“DOL”), a U.S. District Court, among other things, substantially narrowed the “health care provider” exception to the FFCRA.
The FFCRA requires employers to provide employees paid leave benefits in connection with certain COVID-19-related absences. The health care provider exception allows employers to deny FFCRA’s leave benefits to employee health care providers. The court rejected as too broad DOL’s regulatory definition of “health care provider” which included:
“[A]nyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, Employer, or entity. This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions, as well as any individual employed by an entity that contracts with any of these institution . . . .”
DOL Final Rule at 19,351 (§ 826.25). Instead, after recognizing its applicability to the FFCRA, the court applied the narrower Family Medical Leave Act “health care provider” definition:
“(A) a doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate) by the State in which the doctor practices; or (B) any other person determined by the Secretary to be capable of providing health care services.”
29 U.S.C. § 2611(6); State of New York v. U.S. Department of Labor, et al., No. 1:20-cv-03020 (S.D. N.Y. Aug. 3, 2020).
In that same decision, the court also: rejected a DOL rule which denied FFRCA leave to employees in the absence of available work for the employee to perform (e.g. during a furlough); vacated a DOL rule requiring employer consent to intermittent use of FFCRA leave; and struck down a DOL requirement that employees provide FFCRA documentation in advance of taking leave.
The court’s decision substantially affects key components of the FFCRA. Significantly, for healthcare sector employers, it may reduce the ability to exempt most employees from FFCRA leave benefits. It also raises the question of potential liability for employers who denied employees FFCRA leave based upon DOL’s now-vacated regulations. Finally, the impact of the court’s decision outside the state of New York is currently unclear. Employers are encouraged to speak with an attorney if they have questions about FFCRA compliance or other employee leave-related matters.
For more information regarding the implications of the court’s decision, the FFCRA or other employment-related matters, please contact attorney John Conley at (602) 792-3500.
In a landmark decision issued on June 15, 2020, the United States Supreme Court held that Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on sexual orientation and gender identity. Resolving a longstanding split among federal courts as to whether Title VII’s protections extend to LGBTQ employees, the Court ruled 6-3 that Title VII’s prohibition on sex-based employment discrimination encompasses sexual orientation and gender identity discrimination.
The Basics of Title VII
Title VII of the Civil Rights Act of 1964 is a federal law prohibiting employment discrimination based on race, color, religion, sex, or national origin (i.e., protected classes). The law applies to any public or private sector employer with 15 or more employees, employment agencies, labor unions, and training programs.
Title VII makes it unlawful for employers to discriminate in any aspect of employment, including recruiting, hiring, promoting, training, terminating, and providing benefits. Additionally, Title VII prohibits employers from retaliating against employees for complaining about discrimination, filing a charge of discrimination, and/or participating in an investigation of discrimination or legal proceeding.
The Court’s Decision
The Court’s decision is in response to a trio of consolidated cases (captioned Bostock v. Clayton County) alleging employment discrimination: a child welfare coordinator was fired after his employer learned of his participation in a gay softball league; a skydiving instructor was fired after informing a customer that he is gay; a transgender funeral director was fired after telling her boss about her plans to transition.
In all three cases, the employee asserted unlawful sex discrimination in violation of Title VII. Rejecting an argument by the employers that Title VII only prohibits sex discrimination on the basis of an employee’s status as a male or female, the Court declared that it is impossible for employers to discriminate on the basis of sexual orientation or gender identity without impermissibly discriminating based on sex. Writing for the majority, Justice Neil Gorsuch opined, “An employer who discriminates against homosexual or transgender employees necessarily and intentionally applies sex-based rules.”
The Court’s full opinion can be accessed here: https://www.supremecourt.gov/opinions/19pdf/17-1618_hfci.pdf
Takeaways for Employers
Employers should review their employment policies and practices to ensure compliance with the Court’s ruling. Specifically, employers should make certain that their anti-discrimination policies include express language prohibiting discrimination and/or harassment based on sexual orientation and gender identity. Employers should also consider conducting employee training addressing anti-discrimination and harassment policies.
For more information regarding the implications of the Court’s decision, please contact attorneys John Conley or Kylie Mote at (602) 792-3500.