DOJ Issues New Corporate Enforcement and Voluntary Self-Disclosure Policy 

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On Tuesday, March 10, 2026, the Department of Justice (DOJ) issued a first-of-its-kind Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP), a departmentwide framework governing how the DOJ evaluates and resolves corporate misconduct. The policy applies to all corporate criminal matters except certain antitrust violations. The CEP incentivizes voluntary self-disclosure, full cooperation, and timely remediation by offering outcomes ranging from a full declination of prosecution to substantial reductions in fines.  

DOJ Corporate Enforcement Policy Framework 

The CEP establishes a three-tier structure for resolving corporate misconduct. 

Part I: Declination of Prosecution 

The DOJ will decline prosecution when a company voluntarily self-discloses, fully cooperates, and timely remediates, provided no aggravating circumstances are present. Examples of aggravating circumstances include particularly egregious misconduct or corporate recidivism within five years. Even when prosecution is declined, companies must still pay disgorgement, forfeiture, and restitution where appropriate.  

Part II: Non-Prosecution Agreement with Significant Fine Reduction 

Part II applies to companies that cooperate and remediate but narrowly miss the voluntary self-disclosure requirements or face aggravating factors. In those cases, the DOJ may offer a Non-Prosecution Agreement with a term of less than three years, no independent compliance monitor, and a fine reduction of 50% to 75% off the low end of the U.S. Sentencing Guidelines range.  

Part III: Reduced Penalty with Prosecutorial Discretion 

Under Part III, companies that do not qualify for the first two tiers may still receive a reduction in penalties, though the DOJ caps the reduction at 50% of the applicable fine. Prosecutors retain full discretion over the ultimate resolution and enforcement terms.  

Self-Disclosure, Cooperation, and Remediation 

To qualify as voluntary self-disclosure under the CEP, a company must make a good-faith disclosure to the appropriate DOJ component before the misconduct is known to the Department or before an imminent threat of disclosure exists. The disclosure must also occur when the company has no preexisting obligation to report and must be made within a reasonably prompt time after becoming aware of the misconduct.  

Disclosures made only to regulatory or civil enforcement agencies generally do not qualify, though they may receive limited credit. Notably, the policy allows companies to remain eligible for a declination even if a whistleblower submits to the DOJ first. To qualify, the company must self-report within 120 days of receiving the whistleblower’s internal report.  

Under the CEP, full cooperation requires proactive, rolling disclosure of facts and evidence, rather than simple responses to document requests. Companies are expected to attribute facts to specific sources, make personnel available for interviews, and avoid interfering with investigative steps. Cooperation credit is earned incrementally and is not presumed.   

Timely remediation requires root-cause analysis, an effective compliance program, disciplining responsible employees, and implementing controls governing personal and ephemeral messaging platforms used for business communications. 

Practical Takeaways 

  • Strengthen compliance programs. Companies should ensure their programs reflect DOJ criteria, including adequate resourcing, compliance-function independence, risk-based tailoring, and regular testing.  
  • Build internal reporting and escalation protocols. The 120-day whistleblower window requires companies to promptly triage, investigate, and escalate internal reports of criminality and misconduct to senior leadership and outside counsel.  
  • Develop a self-disclosure playbook. Companies should establish a framework for evaluating whether and when to self-disclose, addressing the CEP’s criteria and weighing risks and benefits at each stage of an internal investigation.  
  • Review document retention and communications policies. The DOJ has flagged ephemeral messaging as a remediation concern; companies should ensure adequate guidance and controls are in place to properly preserve documents and communications.  
  • Prepare for proactive cooperation. Full cooperation under the CEP requires proactive engagement, not passive responsiveness, in any interaction with the DOJ.  

For more information regarding the new CEP or guidance on compliance-related issues, please contact any member of Varnum’s White Collar Defense and Government Investigations Practice Team.    

DOL Proposes New Rule on Independent Contractor Classification

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The U.S. Department of Labor (DOL) has proposed a new rule for determining employee or independent contractor status under the Fair Labor Standards Act (FLSA). The proposed rule seeks to rescind the 2024 independent contractor rule issued during the Biden administration.

The public comment period closes on April 28, 2026, at 11:59 p.m. Independent contractor classification rules have shifted in recent years. For more background on the rescission of the 2024 rule, see “Independent Contractor Rules in Flux: What Employers Need to Know.”

Economic Reality Test Remains the Framework

The proposed rule applies the “economic reality” test, the standard framework for assessing independent contract status. The two primary factors in evaluation are:

  • Control: The nature and degree of the principal’s control over the work performed.
  • Opportunity for Profit or Loss: The worker’s ability to earn a profit or risk a loss based on their own initiative.

Additional Factors Considered

Other factors the DOL may evaluate include:

  • The extent to which the work is part of an integrated unit of production.
  • The permanency of the relationship.
  • The level of skill required for the work.
  • The worker’s investment in facilities and equipment.

The rule emphasizes the actual practice of the relationship over the contract and provides fact-specific examples to guide classification decisions.

Federal vs. State Independent Contractor Tests

Employers should note that federal and state standards may differ.

For example, Michigan and other states use separate tests to determine independent contractor status for unemployment insurance tax purposes. A worker may qualify as an independent contractor under the federal FLSA standard but be classified differently under state unemployment insurance laws.

As a result, employers must evaluate classification under both federal and applicable state standards when classifying employees.

Why Proper Worker Classification Matters

Employee versus independent contractor classification affects more than wage payment. It also impacts:

  • Wage and hour compliance.
  • Payroll and tax withholding obligations.
  • Eligibility for health insurance and retirement benefits.
  • Employer unemployment insurance contributions.

Misclassification can trigger liability across multiple legal and regulatory areas, including wage claims, tax penalties, and benefits disputes.

Employers seeking guidance on the proposed rule or the classification of workers should contact a Varnum Labor and Employment or Employee Benefits attorney.

Estate Planning for Blended Families in 2026

Estate planning can be complex for any family, but blended families face unique challenges that are often overlooked. Remarriage, stepchildren, and competing priorities can make standard estate planning approaches insufficient.

Whether you are reviewing your own plan or advising clients, proactively addressing these issues is essential for protecting assets and family harmony.

Choosing the Right Trustee or Fiduciary for Blended Families

Selecting a trustee or fiduciary is particularly important in blended families. Family members may face competing loyalties or emotional pressure after a death.

A neutral third-party or professional fiduciary can help ensure the estate plan is administered consistently and according to its terms, reducing the risk of conflicts among a surviving spouse and children from prior relationships.

Planning for the First Death in a Blended Family

Many estate plans for married couples rely on a trust becoming irrevocable at the first spouse’s death. For blended families, this is an especially important consideration.

Irrevocable trusts can protect children’s inheritances from previous relationships while still providing for the surviving spouse, balancing fairness with control over long-term distribution.

Coordinating Estate Plans with Prenuptial or Postnuptial Agreements

Prenuptial and postnuptial agreements play a critical role in blended family planning. They clarify expectations and can override default state inheritance laws.

Estate plans should be reviewed alongside these agreements to ensure that trusts, wills, and beneficiary designations align and work together effectively.

Avoiding Unintended Disinheritance

Without careful planning, assets can unintentionally pass entirely to a surviving spouse, leaving children from a previous marriage unprotected.

Review trust structures, beneficiary designations, and ownership arrangements to confirm they reflect the intended balance among all family members.

Powers of Attorney and Decision-Making Authority

In blended families, decisions during incapacity can be as sensitive as distributions after death. Naming agents with clear authority and whose appointment is unlikely to be contentious can reduce family conflicts during already stressful times.

The Importance of Communication

Misunderstandings are often the root of estate disputes. Clear communication about goals, priorities, and expectations can prevent surprises, even without disclosing every detail.

Why Blended Families Need Proactive Estate Planning

Blended families are increasingly common, but estate plans frequently fail to address their needs. A thoughtful review of your estate plan focusing on the following can protect both relationships and assets:

  • Trustee and fiduciary selection
  • Trust structure and timing
  • Beneficiary coordination
  • Powers of attorney and decision-making authority

For families and advisors alike, addressing these issues proactively can make a meaningful difference in long-term outcomes.

Before making changes to property ownership or relying on outdated documents, consult with Varnum estate planning attorneys to ensure your plan protects your assets, supports your family, and aligns with your long-term goals.

Varnum in the Community: Sarah Wixson, Katie Szymanski, and Cole Anderson

Varnum in the Community

Grand Rapids, MI, Feb. 20, 2026 – Varnum partner Sarah Wixson has joined the board of Friends of the Children Detroit, attorney Katie Szymanski has been named Board Vice President for the Western Michigan Estate Planning Council, and attorney Cole Anderson has been elected to the board and partnership committee of Beyond26.

Sarah Wixson Joins Friends of the Children Detroit Board

Friends of the Children Detroit supports youth facing significant obstacles through long-term, professional mentoring relationships. The organization connects children with paid, full-time mentors who support them from early childhood through high school graduation. As a board member, Wixson will support the organization’s mission of empowering youth through sustained mentoring and advocacy.

Wixson is a litigation partner and leader of Varnum’s Health Care Practice Team. She advises physicians, hospitals, and health care entities on litigation, compliance, regulatory, and licensing matters. Her practice also includes business and real estate disputes, including shareholder, contract, and commercial litigation.

Katie Szymanski Named Vice President of Western Michigan Estate Planning Council Board

The Western Michigan Estate Planning Council is a professional organization affiliated with the National Association of Estate Planners & Councils that promotes collaboration among estate planning professionals in West Michigan. As Vice President of the Board of Directors, Szymanski will support the council’s education, professional development, and member engagement efforts.

Szymanski is a member of Varnum’s Estate Planning Practice Team. Her practice includes estate settlement, trust administration, tax, and wealth transfer planning for individuals and families. She also advises clients on tax compliance and planning for real estate and closely held business interests. Szymanski is a Certified Trust and Fiduciary Advisor (CTFA®).

Cole Anderson Elected to Beyond26 Board of Directors

Beyond26 supports adults with disabilities in finding employment through individualized advocacy and networking. The organization works with businesses and community partners to identify employment and volunteer opportunities. As a member of the Partnership Committee, Anderson will support fundraising and partnership development efforts to help expand Beyond26’s reach and impact.

Anderson is an associate in Varnum’s Labor and Employment Practice Team. He supports clients through legal research, drafting, and preparation of filings and agreements related to workplace matters. Prior to joining Varnum, Anderson served as a corporate counsel extern and interned with the Macomb County Prosecutor’s Office.

EPA Repeals Greenhouse Gas Endangerment Finding

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On February 12, 2026, the United States Environmental Protection Agency (EPA) finalized a deregulatory rule rescinding the 2009 greenhouse gas (GHG) Endangerment Finding. The Endangerment Finding served as the legal and scientific basis for federal regulation of GHG emissions under Section 202(a) of the Clean Air Act.

The 2009 determination concluded that greenhouse gases “endanger public health and welfare,” triggering EPA’s obligation to regulate GHG emissions from motor vehicles. With the repeal, EPA simultaneously eliminates federal GHG emission standards for light-, medium-, and heavy-duty vehicles and engines, along with associated compliance mechanisms, including credit trading, fleet averaging, and reporting requirements.

Legal Significance of the Repeal

The recission marks a substantial reinterpretation of EPA’s authority under the Clean Air Act and narrows the agency’s view of how the statute applies to globally dispersed greenhouse gases.

Although the immediate regulatory rollback applies to mobile sources, eliminating the Endangerment Finding removes the foundational determination that has historically supported federal GHG regulation across multiple sectors. As a practical matter, this action may limit EPA’s ability to impose future GHG performance standards unless Congress provides new congressional authorization or a subsequent agency reversal.

Importantly, non-GHG Clean Air Act programs remain in effect. Regulated entities must continue to comply with National Ambient Air Quality requirements, hazardous air pollutant standards, permitting obligations, and other applicable federal and state environmental regulations.

Litigation and Regulatory Uncertainty

The rule is expected to face immediate legal challenges in the U.S Court of Appeals for the District of Columbia Circuit. Litigation could create uncertainty regarding the rule’s durability and implementation timeline.

Depending on judicial outcomes, the court could:

  • Issue a stay of the rule;
  • Remand the rule to EPA for further explanation; or
  • Vacate the repeal and reinstate the prior Endangerment Finding.

Companies should evaluate near-term compliance cost reductions against longer-term regulatory risk, including the potential for reversal under a future administration.

State-Level Greenhouse Gas Regulation and Enforcement Risk

Even if the federal Endangerment Finding remains rescinded, states may seek to address perceived regulatory gaps through:

  • State greenhouse gas emission standards;
  • Revised permitting requirements;
  • Climate-related statutory claims; and
  • Common-law climate litigation.

As a result, compliance obligations may shift rather than disappear. Multi-jurisdictional regulatory exposure remains a key consideration for manufacturers, energy companies, and transportation-related entities.

Organizations should take a proactive, risk-based approach to environmental compliance and climate governance to ensure preparedness across multiple regulatory scenarios.

For questions regarding the Endangerment Finding repeal or environmental compliance strategy, please contact Varnum’s Environmental and Natural Resources Practice Team.

Using Trusts to Improve Tax Outcomes, Control, and Certainty in Divorce Settlements

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Parties in a divorce often want to reach a settlement quickly. In the rush to resolve disputes, however, spouses may agree to divide assets or enter long-term payment obligations without fully considering tax basis, capital gains, estate inclusion, or future enforcement of those agreements. Incorporating estate planning strategies into divorce negotiations can help align cash flow, control, and tax outcomes while reducing post-divorce conflict.  

A trust is a legal arrangement in which a third-party trustee holds and manages property for the benefit of another person. Trusts allow parties to separate control of assets from beneficial enjoyment and embed clear, enforceable terms that might otherwise require ongoing court oversight. When structuring a property settlement, a trust can replace a fragile “pay-or-pursue” arrangement with predictable administration by an independent fiduciary.

A trust may be used to:

  • Provide a reliable income to a former spouse without relying on the payor’s ongoing cooperation
  • Direct remaining assets to children or other beneficiaries
  • Manage capital gains and estate tax exposure
  • Address future contingencies such as remarriage, inheritances, or changes in earnings

The optimal structure depends on each party’s priorities, including income certainty, flexibility to terminate benefits, estate tax efficiency, and control over ultimate beneficiaries.

Trust Structures That May Support Divorce Settlements

Lifetime QTIP Trust

When the primary goal is to provide a guaranteed income to a former spouse, a qualified terminable interest property (QTIP) trust can require all trust income to be paid to the former spouse as beneficiary. A neutral trustee administers the trust while the settlor, or payor, retains control over who receives the remaining assets after the beneficiary’s death.

Since the trust assets are included in the income beneficiary’s estate at death, they typically receive a date of death basis adjustment, which may benefit the remainder beneficiaries. This approach favors predictability and security over flexibility and must be implemented before the divorce is finalized, while the marital deduction remains available.

Bypass or Credit Shelter Trust

If the parties want support or other payments to end upon specific future events, a bypass trust can condition or terminate income or access based on triggers such as remarriage, income thresholds, receipt of inheritances, or the passage of time. Tradeoffs may include using a lifetime gift and estate tax exemption and losing a basis adjustment at the beneficiary’s death. Certain reversionary features can restore control to the payor but may increase estate inclusion risk.

Charitable Remainder Trust

If the divorce involves the sale of an asset that has significantly appreciated, such as stock, a charitable remainder trust may offer tax advantages. The trust can sell low-basis assets without immediate capital gains tax. It then pays income to the former spouse for a defined term and distributes the remainder to a charitable organization. The contributing party may receive a charitable deduction at the time of funding. This structure can combine tax efficiency with enforceable behavioral terms.

Irrevocable Life Insurance Trust

When support obligations are secured with life insurance, an irrevocable life insurance trust (ILIT) can keep death benefits outside the insured’s taxable estate while incorporating conditions tied to remarriage and other events. An ILIT often avoids complications associated with direct policy ownership and can provide liquidity for estate planning if needed.

Alimony Trust

When a divorce involves a business that is difficult to value or divide, an alimony trust can hold the business interest, distribute its income subject to negotiated conditions, and name children as remainder beneficiaries. This structure can reduce valuation disputes, improve governance, and create greater certainty around tax and cash flow outcomes.

The Bottom Line

Thoughtful collaboration between divorce counsel and estate planners can transform fragile settlement promises into enforceable, tax-aware structures that reduce risk for both parties. For assistance, contact a member of Varnum’s family law or estate planning practice teams.

U.S. Supreme Court Strikes Down IEEPA Tariffs: Implications for Importers and Tariff Refund Strategies

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In a 6-3 decision, the Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, rendering tariffs imposed under IEEPA unlawful from the outset. Chief Justice Roberts, writing for the majority, concluded that IEEPA’s grant of authority to “regulate … importation” does not encompass the power to impose tariffs, which are a form of taxation constitutionally reserved to Congress. The Court emphasized that the word “regulate” in IEEPA has never, in any federal statute, been interpreted to include the power to tax, and that Congress has consistently delegated tariff authority “clearly and with careful constraints,” using specific terms such as “duty” or “surcharge,” accompanied by rate caps, limitations on duration, and other procedural safeguards.

The ruling’s practical effect is to invalidate the tariffs the President imposed under IEEPA beginning in early 2025, including both the “reciprocal” tariffs applied to imports from virtually all trading partners and the “drug-trafficking” tariffs applied to imports from Canada, Mexico, and China.

Implications for Clients Seeking Tariff Refunds

The Court’s opinion is silent on remedies, including whether and how importers who paid IEEPA tariffs will receive refunds. Justice Kavanaugh noted in dissent that the refund process is likely to be a “mess.” Based on estimates of IEEPA tariff revenue collected since early 2025, some economists have indicated that the federal government could have refund exposure of over $175 billion. As a general matter, importers of record (i.e., the entities that actually paid IEEPA tariffs to U.S. Customs and Border Protection (CBP)) will be the most direct beneficiaries of any refund process. Companies further down the supply chain that absorbed tariff costs indirectly face a more complex picture and should examine their purchase agreements and seek counsel to determine whether they have a viable path to recovery.

Clients who have paid IEEPA tariffs should take the following steps promptly:

Preserve documentation. All records of tariff payments, importer-of-record status, entry summaries, and related correspondence should be preserved and organized. We recommend creating a data sheet identifying each relevant import entry, tracking key details such as entry date and number, HTS classification, country of origin, and liquidation status. Importers should also review their ACE portal to confirm that their banking details on file with CBP are current to avoid delays in receiving electronic refunds.

Monitor legal developments. The U.S. Court of International Trade (CIT) is expected to play a central role in administering refunds, but any refund process is yet to be determined. Separately, it is possible that refunds may be obtained through CBP’s administrative channels, including the Post Summary Correction or Protest process. Clients should monitor developments closely for any procedural guidance from the courts or from CBP.

Anticipate delays. Despite the straightforward nature and itemization of tariff payments in relevant import records, the sheer volume of claims could overwhelm the system. Clients should expect any refunds to be subject to a significant lag. Treasury Secretary Scott Bessent previously indicated refunds could potentially be spread out over a year.

The White House Response and Alternative Tariff Authorities

The Administration has signaled that it will move quickly to reimpose equivalent tariffs under other statutory authorities. Already since the Court’s ruling, President Trump has indicated he would sign an executive order to impose a 15% global tariff under Section 122 of the Trade Act of 1974.

Clients should understand, however, that these alternative statutes are more limited than IEEPA. They typically require agency investigations, public hearings, formal findings, and may impose caps on tariff rates and durations. The procedural requirements of the alternative statutes will likely slow the reimposition of tariffs and may result in rates, durations, and product coverage that differ significantly from the IEEPA tariffs. Importantly, today’s decision is limited to IEEPA’s use as a tariff authority. The President retains the ability to invoke IEEPA for other purposes — including launching investigations, freezing transactions while investigations are pending, and restricting or banning particular imports or exports.

Key Risks and Considerations

Tariff uncertainty will persist. Even with today’s ruling, the effective tariff rate on imports is expected to remain elevated due to tariffs imposed under authorities other than IEEPA (e.g., Section 232 tariffs on steel, aluminum, automobiles, and other goods). Clients should not assume a full return to pre-2025 tariff levels.

Trade deal disruption. The IEEPA tariffs were instrumental in negotiating trade agreements with numerous countries. The ruling may create uncertainty around those arrangements. Clients with cross-border supply chains or contractual commitments tied to tariff-related trade deals should review those arrangements carefully.

New tariffs may be imposed rapidly. The Administration has been exploring alternative legal pathways for months. Clients should prepare for the possibility that replacement tariffs, such as the new 15% global tariff, could take effect within days or weeks under expedited executive action, even if the procedural requirements of the underlying statutes impose some delay.

We recommend that all clients with significant import exposure consult with their Varnum attorney to assess their refund eligibility, review their supply chain and contractual arrangements, and develop a strategy for navigating the period of uncertainty ahead.

Michigan’s Data Center Moment: Navigating the Moratorium Maze

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Michigan is emerging as one of the most compelling jurisdictions for hyperscale and enterprise data center development. In addition to ideal land-use conditions, Michigan offers significant tax incentives, including an exemption from the 6 percent sales and use tax on certain data center equipment and construction materials. Michigan also provides regulatory options for power supply that are not available in other states.

As interest from sophisticated developers accelerates, however, a familiar pattern is taking hold across Michigan’s townships and municipalities: the preemptive development moratorium.

The Michigan Data Center Development Landscape

Dozens of Michigan municipalities, many of them well-positioned for data center siting due to infrastructure, land availability, and utility access, have enacted temporary moratoria on data center development.

While courts have recognized a municipality’s authority to adopt moratoria under certain circumstances, there is no express statutory authority for development moratoria in Michigan. However, moratoria are not new to developers in the state. Municipalities have used them to pause development while reviewing or amending zoning ordinances and to delay or discourage projects they oppose. In practice, a moratorium can function either as a shield or as a sword.

Moratoria vary widely in scope and defensibility. Some are narrowly tailored and supported by clear findings, while others are broad and more vulnerable to legal challenge. Most reflect a common reality: local zoning ordinances drafted decades ago did not contemplate modern data centers, particularly their scale, energy demands, and operational intensity.

Under the Michigan Zoning Enabling Act and related statutes, local governments retain authority over zoning approvals for data centers. The interaction among zoning authorities, municipal powers, and utility regulation creates both strategic and operational obstacles. The timing of site control, pre-application engagement with local officials, and the overall project posture can affect a development’s trajectory.

For developers unfamiliar with Michigan’s legal and regulatory framework, an early strategy is critical.

What Data Center Developers Should Know About Michigan Moratoria

A moratorium is not necessarily a dead end. Michigan law imposes substantive and procedural constraints on a municipality’s authority to enact or extend a development moratorium. The enforceability of any specific moratorium depends on its language, legislative findings, procedural history, and factual context. Generally, a valid moratorium should be tied to protecting public health, safety, and welfare.

Beyond zoning, Michigan data center projects implicate a complex web of permitting, environmental compliance, energy regulation, and economic development incentives. Key considerations may include:

  • Brownfield redevelopment incentives
  • Environmental permitting and compliance
  • Large-load interconnection and electric service agreements
  • Power Purchase Agreement (PPA)
  • Real estate acquisition and site control strategy
  • Payments in lieu of taxes (PILOTs)
  • State and local tax incentives

The path to energization is rarely linear. Developers who approach these workstreams sequentially, rather than in parallel, often face avoidable delays or disadvantages. A coordinated, Michigan-specific strategy can significantly reduce entitlement risks and timeline uncertainty.

Working with Varnum on Michigan Data Center Projects

Varnum advises data center developers, owners, and investors across the full lifecycle of Michigan projects. Our team works closely with municipalities, utilities, and state agencies across the state and brings integrated experience in:

  • Land use and zoning
  • Real estate transactions
  • Environmental permitting and compliance
  • Energy and utility regulation
  • Tax incentives and economic development programs
  • Public finance

We help clients structure early engagement to preserve optionality, evaluate moratorium risk, coordinate parallel workstreams, and move efficiently, from site selection to certificate of occupancy.

Michigan’s data center market is rapidly expanding. Developers positioned with a thoughtful legal and regulatory strategy will be better equipped to navigate risk and advance efficiently.

For guidance on Michigan data center development, zoning moratoria, or energy strategy, contact a member of Varnum’s Energy Practice Team.