ML BeneBits

Join Morgan Lewis lawyers this summer for programs on employee benefits and executive compensation.

This is the fourth part of a multi-part blog post series discussing the implications and fallout from the Final Rule recently adopted by the Federal Trade Commission (FTC) banning the enforcement of almost all noncompete agreements with workers. In Part 1 of this series, we discussed the general parameters of the rule and several threshold questions that it raises. In Part 2, we discussed the types of arrangements that are prohibited by the Final Rule and the alternatives to noncompete clauses that likely remain available to companies following the effective date of the Final Rule. In Part 3, we discussed the impact of the Final Rule on noncompetition covenants entered into by sellers of a business, as well as the application of the Internal Revenue Code (Code) Section 280G golden parachute rules to noncompete covenants affected by the Final Rule.

This is the third part of a multi-part blog post series discussing the implications and fallout from the Final Rule recently adopted by the Federal Trade Commission (FTC), banning the enforcement of almost all noncompete agreements with workers. In Part 1 of this series, we discussed the general parameters of the rule and several threshold questions that it raises. In Part 2, we discussed the types of arrangements that are prohibited by the Final Rule and the alternatives to noncompete clauses that likely remain available to companies following the effective date of the Final Rule.

This is the second in a multipart series on ML BeneBits discussing the implications and fallout from the Final Rule recently adopted by the Federal Trade Commission (FTC) banning the enforcement of almost all noncompete agreements with workers. In Part 1, we discussed the general parameters of the rule and several threshold questions that it raises. In Part 2, we discuss the types of arrangements that are prohibited by the Final Rule and the alternatives to noncompete clauses that likely remain available to companies following the effective date of the Final Rule.

On April 23, the Federal Trade Commission (FTC) approved by a 3-2 vote a Final Rule that, if it becomes effective, will ban almost all noncompete clauses for nearly all workers. This is the first in a blog series exploring the fallout from the sweeping ban, specifically in terms of executive compensation and employee benefits. In Part 1, we address the first important threshold questions posed by the Final Rule. Future posts in the series will address the wide scope of the Final Rule and the types of executive compensation arrangements it prohibits; the types of arrangements that survive the Final Rule; and specific issues related to equity compensation, corporate transactions, Section 280G of the Internal Revenue Code (Code), and other compensation-related tax issues.

The US Department of Labor (DOL) final amendment to Prohibited Transaction Class Exemption 84-14, the so-called QPAM Exemption that is commonly relied upon by investment managers for ERISA-governed employee benefit plans and individual retirement accounts to avoid potential prohibited transaction issues, was published in the Federal Register on April 3, with the changes becoming effective on June 17, 2024.

When private equity investment transactions close, management and private equity investors are off to the races—generally aligned on strategic and financial objectives. However, as market conditions and the economic climate shift, key parties may become misaligned and management incentive plans (MIPs) could become underwater or ineffective.

Besides being Valentine’s Day, February 14, 2024 is an important day for employers with any California employees: It is the last day for employers to notify California employees (including former employees who were employed after January 1, 2022) that any unlawful noncompetes applicable to them are void. These notices need to be specific to each employee and individually addressed, and so will likely involve some investment in time and effort by employers to ensure compliance with the law.

US state and federal laws have increasingly sought to regulate environmental, social, and governance (ESG) investing—a trend that continued in 2023. This increased regulatory focus has impacted benefit plans, including ERISA plans and, especially, public retirement plans.

To the great relief of many plan sponsors, administrators, recordkeepers, and payroll vendors, the IRS issued highly anticipated relief regarding the mandatory "Rothification" of catch-up contributions.