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In Split Vote, FTC Approves Controversial Final Rule Banning Most Post-Employment Non-Competes; Rule Already Subject to Challenge in Court
On April 23, 2024, by a 3-2 margin, the FTC voted to finalize its controversial non-compete rule, which, generally, will prohibit businesses from entering into non-compete agreements with nearly all workers across the U.S. going forward and invalidate the existing non-competes of nearly 30 million workers.

New Jersey Adopts a Comprehensive Data Privacy Law
2023 was a record-breaking year, with legislators in Delaware, Indiana, Iowa, Montana, Oregon, Tennessee and Texas passing comprehensive data privacy laws, joining California, Colorado, Connecticut, Utah and Virginia. Already 2024 is on pace to beat 2023’s record year, as New Hampshire (New Hampshire Privacy Act, SB 255-FN), New Jersey (New Jersey Privacy Act, SB 332) and Kentucky (HB 15) lawmakers have already passed comprehensive privacy laws. This post provides the details and information you and your business need to know about the New Jersey Privacy Act (NJPA), signed into law by Governor Phil Murphy. You can find our discussion regarding the New Hampshire Privacy Act here.

Important Updates to the New York LLC Transparency Act
The New York LLC Transparency Act (NYLTA) has recently been amended. The key take-aways are as follows:
Effective Date has been pushed back a year to January 1, 2026.
Reporting Companies formed or registered in New York prior to January 1, 2026 will have until January 1, 2027 to provide initial reporting information.
Reporting Companies formed or registered in New York after January 1, 2026 will be required to provide initial information within 30 days after formed or registered in New York.
Set forth below in additional detail is an updated Client Alert on the NYLTA.

Everything You Always Wanted to Know About California’s Workplace Violence Prevention Plan (But Were Afraid to Ask) - Answers to 10 Frequently Asked Questions On California’s New Law
Beginning July 1, 2024, a new California law (SB 553) will require most California employers to establish workplace violence prevention plans. We answer 10 frequently asked questions about the new law below.

Minimum Wage Increases and Ontario Employment Shake-up: What Employers Need to Know
Ontario’s Bill 149, Working for Workers Four Act, 2024, received royal assent on March 21 2024, bringing in new changes to Ontario’s employment landscape. Below are some of the key developments that businesses with employees in Ontario should be aware of.

Essential Annual Actions for Start-up Boards
As a founder of a start-up, you have your hands full, and the end of your start-up’s fiscal year can sneak up on you. But, as the year-end approaches, you should be mindful of a few key actions your start-up board will want to consider on an annual basis. In this article, we’ll walk through the most common annual actions to be approved by start-up boards at their meetings held around the end of the fiscal year: the budget, compensation, including bonuses and equity awards, and other administrative action (including, the appointment of auditors and ratification of officers). Keeping your board engaged on these crucial items yearly will allow the board to see that you are capable of leading all aspects of the business, including in the area of corporate governance, and will ensure you receive valuable guidance and feedback from your directors.

Section 409A Valuations: Mastering the Art and Science in a Volatile Venture Market
Within the unpredictable landscape of start-ups and private companies, market volatility can significantly alter a company’s financial trajectory. An integral part of navigating this volatility is understanding the role and function of Section 409A[1] valuations. These valuations, which play a critical role in the financial and tax planning strategies of organizations, serve as an independent measure of a company’s common stock value. In this article, we explore the intricacies of Section 409A valuations, focusing on their importance, timing, and methodologies, and offer strategies for engaging with third-party firms to achieve a valuation that most closely aligns with your company’s worth.

Year in Review: Laws Impacting Employee Non-Competition, Non-Solicitation, and Non-Disclosure Agreements – What to Know, What to Do and What to Expect in 2024
Year in Review: Laws Impacting Employee Non-Competition, Non-Solicitation, and Non-Disclosure Agreements – What to Know, What to Do and What to Expect in 2024

Boosting Biotech: New York City Revives Tax Credits for Emerging Companies
Boosting Biotech: New York City Revives Tax Credits for Emerging Companies

Pay Transparency Law on the Horizon for Massachusetts Employers
Pay Transparency Law on the Horizon for Massachusetts Employers

New York Widens its Employee Intellectual Property Protections
New York Widens its Employee Intellectual Property Protections

California Continues to Expand Privacy Protections
California Continues to Expand Privacy Protections

Minimum Wage Increases Now Effective in Multiple Canadian Provinces
Multiple provinces in Canada increased their general minimum wages effective October 1, 2023.

Considering Converting an LLC into a Corporation? Here Are the QSBS Issues You Should Be Thinking About.
A common question we receive from founders is whether to organize their start-up business as a corporation or as an LLC . While there are many non-tax related factors that need to be considered, this is often (at least in part) a tax driven decision. Organizing the business as an LLC can come with certain tax advantages, such as avoiding an entity level corporate tax and, subject to various limitations, permitting founders to use losses generated by the business and passed through on their Schedule K-1 to offset their other income. Alternatively, while organizing the business as a corporation results in an entity level corporate tax and precludes the pass-through of losses, it may permit the founders to access the “qualified small business stock” (QSBS) rules of Section 1202 of the Code.

A Closer Look at New York State’s Proposed Ban of Non-Compete Agreements
New York may become the latest state to ban non-compete agreements after the New York State Assembly and Senate each passed legislation seeking to curtail their use by employers.

IRS Issues Notice 2023-44 Clarifying the 48C Program Application Process and Timeline
On May 31, 2023, the Department of Treasury and the Internal Revenue Service released Notice 2023-44 to provide additional guidance on Section 48C, a revised and expanded allocation-based investment tax credit for qualified investments in eligible qualifying advanced energy projects. The Notice modifies and clarifies Notice 2023-18, which was released on February 13, 2023 and provided detailed mechanical guidance on applying for allocations of the Section 48C Credit

Benefits and Legal Risks of Embracing Generative AI Applications
One of the industries that can be transformed by generative AI is the legal industry. The revolutionary tools powered by generative AI raise many questions: will the legal industry prohibit or embrace this technology? If it embraces the technology, what will adaptation look like in practice? And, it even poses an existential question – does it have the potential of making lawyers obsolete?

Board Warns Employers to Pare Back Overbroad Non-Disparagement and Confidentiality Provisions in Severance Agreements
Severance agreements offered to non-supervisory employees that include broad-based non-disparagement and confidentiality provisions are unlawful according to the National Labor Relations Board. The Board’s decision in McLaren Macomb, 372 NLRB No. 58 (Feb. 21, 2023), reverses Trump administration era Board decisions on this issue, and if upheld, may have far reaching consequences for both unionized and non-unionized workplaces.

New York State Offers Matching Investment Funds for Qualified Early Stage Start-Ups
New York Governor Kathy Hochul recently announced the establishment of a new initiative to match up to $30 million in funding received by early stage companies operating in New York. Through the Pre-Seed and Seed Matching Fund Program, start-ups could receive $50,000 to $250,000 to match investments in the form of convertible debt, a Simple Agreement for Future Equity (SAFE), or equity securities.
In this alert, we provide an overview of the program and its eligibility requirements.

Extending for Success: The Rising Trend of Extension Rounds and the Importance of Due Diligence
In light of a slowing market, companies that have already secured venture capital funding are increasingly resorting to extension rounds as a means of obtaining additional capital in an attempt to avoid a down round financing and extend their runway until the fundraising environment improves. Extension rounds can provide several strategic benefits for startups.
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