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Since the arrival of AI programs like OpenAI’s ChatGPT, Google’s Bard, and other similar technologies (“Generative AI”) in late 2022, more programs have been introduced and several existing programs have been upgraded or enhanced, including ChatGPT’s upgrade to ChatGPT-4. Our previous posts have identified the features and functionality of Generative AI programs and outlined the emerging regulatory compliance requirements related to such programs. This post discusses how regulatory agencies worldwide have begun to address these issues.

In March 2023, the White House released the National Cybersecurity Strategy, which details the Biden administration’s policy and agency directives to strengthen U.S. cybersecurity across the public and private sectors. Cybersecurity regulations and cybersecurity responses affect both U.S. national security as well as the security and stability of U.S. businesses and individuals. The 2023 National Cybersecurity Strategy replaces the 2018 National Cyber Strategy set forth under the Trump administration and builds on the 2008 Comprehensive National Cybersecurity Initiative set forth under the Obama administration.  

On Monday, the DOJ announced its settlement with L3 Technologies, Inc., Communication Systems West (“L3 Tech”), a manufacturer of communications for military systems.  L3 Tech paid $21.8 Million to resolve allegations that it violated the False Claims Act (“FCA”) by knowingly submitting false claims to the Department of Defense by double counting materials.  DOJ alleged that from 2008 through 2011, L3 Tech submitted dozens of contract proposals that double-charged the Government for low-cost common stock items like nuts and bolts.  Notably, this resolution includes a few interesting points.

Yesterday, the Department of Justice announced a settlement between Genotox Laboratories (“Genotox”) and the Department of Justice involving allegations that Genotox paid volume based commissions to third party marketers in violation of the Anti-Kickback Statute (“AKS”) and submitted claims to the federal health care programs for unnecessary drug tests.

On May 19, the Sixth Circuit Court of Appeals set a new, substantially more demanding standard for employees to proceed on a collective basis in federal wage and hour lawsuits. The court’s decision in Clark v. A&L Home Care and Training Center will cause trial courts throughout Michigan, Ohio, Kentucky and Tennessee to approach wage and hour litigation very differently than previously.

Many employers remain unaware that employees making over six figures can still be entitled to overtime pay under the federal Fair Labor Standards Act (the “FLSA”).  While there is a separate exemption for highly compensated employees (the “HCE exemption”), which reduces the showing that must be made under the “duties” portion of this exemption, a question arose as to whether the “salary basis test” still applied under the HCE exemption.  In Helix Energy Solutions Group, Inc. v. Hewitt, the U.S. Supreme Court recently resolved that question, holding that the salary basis test did indeed apply to the HCE exemption.  This ruling reinforces the importance of providing sufficient weekly or monthly guaranteed compensation to even some of the most well-paid employees, and not relying solely on commissions or another compensation structure unless some other exemption would apply.