Insurance Commission Split Is Kickback
Client Alert | 1 min read | 08.02.05
The Court of Federal Claims in Morse Diesel Int'l, Inc. v. U.S. (July 15, 2005) held that Morse Diesel, a construction management company whose parent had a commission-splitting arrangement with its performance bond brokers, violated the Anti-Kickback Act of 1986 because the payments from the brokers back to the parent were not, as the contractor argued, merely discounts, promotional allowances, or rebates, but rather were for the improper purpose of “cementing” the brokers’ exclusive relationship with Morse and its parent. Further, in an expansive reading of the term “prime contractor,” the court found that, even though Morse Diesel was the named prime contractor under several fixed-price contracts, its parent also was a prime contractor within the meaning of the act and the surety bond brokers were “subcontractors,” despite the facts that there was no direct relationship between Morse Diesel and the sureties and Morse Diesel did not receive directly any of the sureties’ payments.
Insights
Client Alert | 3 min read | 06.12.26
DOJ Guidance Backs Away From Disparate Impact Liability
On June 9, 2026, the U.S. Department of Justice (DOJ) issued a formal opinion concluding that the Equal Opportunity Employment Commission’s (EEOC) existing interpretations of Title VII of the Civil Rights Act of 1964 (Title VII) disparate-impact liability, including the Uniform Guidelines on Employee Selection Procedures (UGESP), are unconstitutional. According to the opinion, EEOC’s prior interpretations contemplate liability based on disproportionately adverse effects alone, without regard to an employer’s likely intent, rather than treating disparate impact as an evidentiary mechanism to “smoke out” intentional discrimination. DOJ found that this approach functions as a “qualified racial-proportionality mandate” that places “a racial thumb on the scales, often requiring employers to evaluate the racial outcomes of their policies, and to make decisions based on (because of) those racial outcomes.” The opinion fulfills one mandate of Executive Order 14281, which rejected disparate-impact liability insofar as it “creates a near insurmountable presumption that unlawful discrimination exists wherever there are any differences in outcomes among different [demographic groups].”
Client Alert | 4 min read | 06.12.26
Auto Dealers: The FTC Is Back in the Driver’s Seat — Warning Letters Signal Renewed Federal Scrutiny
Client Alert | 13 min read | 06.12.26
Client Alert | 4 min read | 06.12.26
