This July, Carolyn Wood, one of our legal assistants, attorney Ed Boucher, his son, Noah and other supporters participated in the Motor City Mile Open Water Swim hosted by Swim Across America. Supporters and swimmers came together to raise funds for SAA’s beneficiary, the University of Michigan Rogel Cancer Center.
We are honored to have sponsored this transformative event and are proud of everyone who represented our firm. Together, support for Swim Across America can help make waves as the organization aims to innovate cancer research, clinical trials and patient programs.
On Monday, December 23rd, a federal appeals court issued a ruling reinstating reporting requirements under the Corporate Transparency Act (“CTA”), with the Treasury Department’s FinCEN extending key deadlines to accommodate the recent legal uncertainty.
Last week, the US District Court for Eastern District of Texas ruled on reporting under the Corporate Transparency Act, issuing a nationwide injunction against its enforcement. The CTA otherwise required entities to report Beneficial Ownership Information on or before January 1, 2025. While this injunction is not permanent, we will suspend filings for companies until the injunction is overturned on appeal.
On Tuesday, April 23, 2024, the FTC published a final rule banning new non-compete clauses in employment contracts with all workers after its effective date. The rule goes into effect 120 days following its publication in the Federal Register, which could be as early as August of this year.
Under the final ruling, existing non-compete agreements—except for those covering senior executives—are unenforceable after the effective date. For senior executives, existing non-competes can remain in force, even after the effective date. However, new agreements with senior executives will be prohibited after the effective date. They define a “senior executive” as a worker in a “policy-making position” who earns more than $151,164 annually through salary, bonuses, and/or commissions, but excluding fringe benefits, retirement contributions, and medical/life insurance premium payments.
The only exception is for non-competes that are agreed to in the a sale of business. The ruling states, “The requirements…shall not apply to a noncompete clause that is entered into by a person pursuant to a bona fide sale of a business entity, of the person’s ownership interest in a business entity, or of all or substantially all of a business entity’s operating assets.”
As a federal government agency, the FTC’s ruling preempts all current state laws limiting non-competes that are not consistent with it, unless the state’s laws provide greater worker protection than the new rule.
The new rule requires employers to provide “clear and conspicuous” notice to current and former workers that their non-compete clauses are no longer enforceable. The FTC has provided model forms of notice in several languages for employers to use or reference in their communications.
It is anticipated that there will be multiple legal challenges that could delay enforcement, including a lawsuit that was filed in Texas within hours of the release of the rule.
