NEW LAWS TO BE AWARE OF - NONCOMPETES PROHIBITED AND THE CORPORATE TRANSPARENCY ACT

NONCOMPETES 

In a shocking move on April 23rd by a 3 to 2 vote the Federal Trade Commission outlawed noncompete contracts for employees and contractors.

The new rule will be challenged in court but otherwise will take effect in 120 days.

The rule not only disallows noncompete provisions but any provision that “penalizes” a worker for, or “functions to prevent a worker from” seeking or accepting new employment or work in the U.S., or operating a business in the U.S., after current employment ends.    

The new Rule also goes further and states that any employee or contractor who has signed a noncompete agreement must be notified within 120 days that the noncompete provision is legally unenforceable.

The new rule does not apply to "senior executives" making at least $151,164 who were or are hired before August 21, 2024.

CORPORATE TRANSPARENCY ACT

Additionally, a bureau of the U.S. Treasury recently created new regulations under the Corporate Transparency Act.  This law applies to all businesses created in 2024 or later and requires businesses created before 2024 to comply with it by January 1, 2025. 

These new regulations will require all businesses to reveal what the agency refers to as "beneficial owners" and reveal that beneficial owner's personal information. A "beneficial owner" can include persons without financial investment.  I'll provide more details after I study the new regulations.  These regulations will also be challenged in court.