Navigating the FTC's New Noncompete Agreement Ban
August 7, 2024
As you may have seen in the news, a significant development in employment law could alter the way you manage employment agreements within your organization — in as little as four months. On Tuesday, April 23, 2024, the Federal Trade Commission (FTC) announced a sweeping ban on noncompete agreements, directly affecting both new and existing contracts. In a departure from the original proposal, existing noncompete agreements covering senior executives may remain in effect.
Understanding the Impact of Noncompete Clauses
Noncompetes have become commonplace, affecting nearly one in five American workers. They’re often criticized as exploitative, imposing limitations that hinder a worker's ability to move to a new job; block embarkment on business ventures; or force workers to remain within their chosen field to avoid relocation, lower wages, or costly legal battles.
Key Highlights of the FTC's Decision
- Immediate Impact: The ban will take effect 120 days after publication in the Federal Register. That’s as soon as mid-August 2024.
- Invalidation of Existing Agreements: Nearly all noncompete agreements with workers will be rendered unenforceable, and employees must be informed of this change.
- Focus on Employee Mobility: The objective of the FTC's decision is to bolster career flexibility and wage growth opportunities for workers by removing agreements that restrict employment movement.
- Preserving Trade Secrets: While noncompetes are being phased out, confidentiality agreements and existing laws continue to protect trade secrets and proprietary information.
- Anticipated Challenges: Various business interest groups that question the FTC's authority to establish such a sweeping rule are expected to oppose the decision. In fact, the pro-business lobbying group the U.S. Chamber of Commerce has already said it will sue to block the rule.
Action Steps for Compliance
- Review Current Contracts: Examine your existing employment contracts to identify clauses that will be affected by the proposed rule. It’s essential to understand which agreements will become void and to prepare accordingly.
- Prepare for Compliance: Begin drafting revisions and alternative contractual protections that align with federal guidelines should the proposed rule take effect. This includes enhancing non-disclosure agreements (NDAs) and other protective measures.
- Stay Informed: Keep abreast of updates, as legal counteractions may alter the final details and enactment timeline. Staying informed will help you adapt to changes promptly and effectively.
- Develop a Communication Plan: Prepare to transparently inform your employees about changes to their employment terms in line with the new regulation. Clear and open communication will be critical in maintaining trust and managing transitions smoothly.
- Rethink Employee Retention: This impending change necessitates a strategic review of your employee retention policies as the competitive landscape for talent is likely to become more dynamic. Consider implementing new retention strategies that focus on positive incentives rather than restrictive agreements.
Our firm is closely monitoring the situation and is available to guide you through this transition. We can help ensure that your contracts remain protective of your interests while adhering to the new regulatory environment.
Schedule a Consultation Today
Navigating these changes can be complex and challenging. Schedule a consultation with GAC today to ensure your organization is fully prepared for the FTC's new regulations. Our experts will help you adapt your employment agreements, develop robust retention strategies, and maintain compliance with the evolving legal landscape. Don’t wait until it’s too late—secure your business’s future now.
On November 1, 2023, a significant statutory amendment came into effect in Oklahoma, impacting the process of filing deeds for record in any county across the state. This amendment mandates that an affidavit must be completed and attached as an exhibit to all deeds, certifying compliance with laws restricting the acquisition of Oklahoma property by alien persons or entities. This blog will guide you through the new requirements and their implications for property transactions in Oklahoma. Understanding Senate Bill 212 and Its Implications Oklahoma has long enforced restrictions on land and mineral ownership by alien persons or entities, with certain exceptions for those deemed "bona fide residents" of the state. Senate Bill 212, passed in the 2023 legislative session, introduced key amendments to this existing framework, codified at 60 O.S. § 121. Here are the two critical changes you need to know: Prohibition on Indirect Acquisition: The new statutory language in subsection A explicitly prohibits both direct and indirect acquisition of title to Oklahoma property by alien persons or entities through business entities or trusts, except as otherwise permitted. Previously, indirect ownership through domestic or domesticated entities was not clearly prohibited. Now, non-exempt businesses and trusts must certify that all direct or indirect owners, trustees, and beneficiaries are either U.S. citizens or bona fide residents of Oklahoma. An exemption is provided for business entities engaged in regulated interstate commerce according to federal law. Mandatory Affidavit for Deed Recording: Subsection B requires that every deed recorded in Oklahoma must include an affidavit, executed by the grantee(s), attesting compliance with the new law and confirming that no funding source is used in violation of this or any other state or federal law. The Oklahoma Attorney General has provided form affidavits to comply with this statute, available on their official website. Key Requirements for the Affidavit To ensure compliance, all deeds presented for recording on or after November 1, 2023, must attach the statutory affidavit as an exhibit. The affidavit must certify: The grantee's compliance with 60 O.S. § 121. That no funds used in the transaction violate state or federal law. Additionally, a $2 per page fee will be added to the filing fee for the affidavit. Without this affidavit, deeds cannot be recorded. Practical Steps for Compliance To navigate this new requirement, follow these steps: Prepare the Affidavit: Ensure that the grantee(s) complete the affidavit provided by the Oklahoma Attorney General, accurately certifying compliance with the statute. Attach the Affidavit: Include the completed affidavit as an exhibit to the deed. Verify Details: Double-check all information to avoid discrepancies that could lead to the rejection of the deed filing. By understanding and adhering to these new legal requirements, individuals and entities involved in property transactions in Oklahoma can ensure smooth and lawful processing of deeds. For more detailed guidance and to ensure your property transactions comply with these new regulations, reach out to GAC to schedule a consultation. Our legal experts are here to assist you with navigating these changes and ensuring all your documentation meets the statutory requirements.
Mechanic’s and materialmen’s liens play a crucial role in securing payment for labor or materials furnished in construction projects. Brett Agee, our Shareholder Attorney here at GAC, recently authored an insightful article for the Oklahoma Bar Association detailing the nuances of these liens in Oklahoma. Here, we summarize his key points to help you navigate this complex legal area. For a detailed read, you can access Brett's full article here. Who Can Claim a Lien? In Oklahoma, anyone who provides labor or materials for the construction or repair of real property can claim a mechanic's lien. This includes contractors working directly with property owners and subcontractors working under contractors. Architects, surveyors, and engineers can also claim liens if their services contribute directly to the project. Pre-Lien Notices: A Crucial Step Before filing a lien statement, claimants must send a pre-lien notice to the property owner and original contractor. This must be done within 75 days of the last date of supplying materials or services. Failure to send this notice can affect the validity of the lien, particularly for claims exceeding $10,000 or involving owner-occupied dwellings. Filing the Lien Statement The timeline for filing a lien statement varies: Contractors: Must file within four months after the last date of furnishing materials or services. Subcontractors: Must file within 90 days after their last date of work. The lien statement should detail the amount claimed, itemized charges, the involved parties, and a legal description of the property. Priority and Enforceability Mechanic’s liens take priority over other liens and encumbrances dating back to the start of construction. They can even affect homesteads and other typically protected properties. However, public properties are generally exempt from such liens unless explicitly stated otherwise in the statute. Discharging a Lien Liens can be discharged one year after filing if no foreclosure action is initiated. Property owners can also post a bond for 125% of the lien amount to discharge the lien. This bond covers the lien amount plus potential legal fees and costs. Practical Tips for Contractors and Subcontractors Verify Property Ownership: Ensure you are dealing with the record owner of the property to avoid complications. Maintain Detailed Records: Keep comprehensive documentation of all work performed and materials supplied. Meet Deadlines: Adhere strictly to timelines for sending pre-lien notices and filing lien statements. Understanding these key aspects of Oklahoma’s mechanic’s and materialmen’s lien laws can help secure your right to payment and protect your interests in construction projects. For more detailed guidance, read Brett Agee's full article on the Oklahoma Bar Association's website.
The Corporate Transparency Act (CTA), enacted in 2021, represents a pivotal shift in how companies disclose their ownership details. With the introduction of Beneficial Ownership Information (BOI) reports, businesses must now provide key information about their beneficial owners. This guide will walk you through everything you need to know about BOI reporting, including what it is, who needs to file it, and the critical deadlines to keep in mind. What is a BOI Report? A BOI report is a mandatory submission that provides essential details about a company's beneficial owners. Here’s what you need to include: Company Information: Legal name, mailing address, and employer identification number (EIN). Beneficial Owner Information: Each beneficial owner's legal name, birthdate, address, and a unique identifying number from a driver’s license, passport, or state-issued ID. When Are BOI Reports Due? Deadlines for filing BOI reports vary based on when your company was established: For new companies (formed in 2024 and beyond): BOI reports must be filed within 90 days of the company's formation. For existing companies (formed before 2024): You have until January 1, 2025, to file your BOI report. How Often Are BOI Reports Filed? Once filed, BOI reports do not expire and do not require annual renewal. However, companies must update their reports within 30 days if any of the information changes. This includes changes in beneficial owners, addresses, or identification numbers. Who Must File a BOI Report? BOI reporting requirements apply to most domestic companies created by filing a document with the Secretary of State or a similar office, including: Corporations Limited Liability Companies (LLCs) Exemptions from BOI Reporting Some entities are exempt from BOI reporting due to substantial regulatory oversight. These include: Publicly traded companies Financial services firms Tax-exempt organizations Accounting firms Large operating companies meeting specific criteria Legal Challenges and Current Status On March 1, 2024, a federal court in Alabama ruled that the CTA's reporting requirements were unconstitutional in National Small Business United v. Yellen. However, this ruling only applies to the plaintiffs in the case. For most entities, the CTA remains in effect, meaning BOI reporting is still mandatory unless your company qualifies for an exemption or was directly involved in the lawsuit. Preparing Your BOI Report To comply with BOI reporting requirements, gather the following information for each beneficial owner: Legal name Birth date Home address Identifying numbers from licenses, state IDs, or passports An image of the associated document Additionally, provide detailed company information, including: Legal name and any "doing business as" (d/b/a) names Jurisdiction information Taxpayer identification number If a beneficial owner has a FinCEN identifier, they may use this in place of the detailed personal information. Final Thoughts Understanding and complying with BOI reporting requirements is crucial for maintaining legal standing and avoiding penalties. If your company falls under the reporting mandate, it's essential to act promptly and ensure all information is accurate and up to date. Contact us today for expert assistance in preparing and filing your BOI report. Our team is here to guide you through the process and ensure your compliance with the Corporate Transparency Act.