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Client Advisories
09.09.2024
Get Ready: CTA's Reporting Deadline is Fast Approaching
Despite legal challenges (see our advisory Nothing Has Changed with the Corporate Transparency Act), the Corporate Transparency Act (CTA) remains in effect and the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department continues to implement and enforce the CTA. As a result, companies in existence as of January 1, 2024 are required to file their beneficial ownership information (BOI) reports before January 1, 2025.The analysis for determining whether a company is reporting or exempt and identifying its beneficial owners (which is a misnomer since it is not limited to owners) can be challenging and time-consuming, especially for a company with a complex ownership structure. Inadequate or hasty reporting heightens the likelihood of mistakes, inaccurate data, and potential non-compliance, which can result in significant civil penalties of up to $500 per day and criminal penalties of up to $10,000 and imprisonment for up to 2 years. As a result, now is the time to actively prepare to file the BOI report by the deadline. A best practice is for the company to designate a person responsible to identify beneficial owners and gather the necessary information and documents to file the BOI report. For a comprehensive analysis of the CTA, see our client advisory (Understanding Your Obligations Under the Corporate Transparency Act).Incidentally, a company formed or registered in 2024 is required to file its BOI report within 90 days of formation or registration. So, if such a company has not yet done so, it should immediately file to avoid penalties. We can assist companies with their analysis of their reporting obligations under the CTA. If you have any questions about the Corporate Transparency Act, please contact Gianfranco Pietrafesa at gpietrafesa@archerlaw.com or 201-498-8559, Zhao Li at zli@archerlaw.com or 856-673-7140, or any member of Archer’s Business Counseling Group.DISCLAIMER: This client advisory is for general information purposes only. It does not constitute legal or tax advice, and may not be used and relied upon as a substitute for legal or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified attorney or tax practitioner licensed to practice in the jurisdiction where that advice is sought.
Client Advisories
08.21.2024
Federal Court Sets Aside FTC Ban on Non-Competes
The United States District Court for the Northern District of Texas has set aside the Federal Trade Commission’s (“FTC”) Non-Compete Clause Rule (“Rule”). In a ruling with nationwide effect, the court ordered that “the Rule shall not be enforced or otherwise take effect on its effective date of September 4, 2024 or thereafter.” This ruling bookends the first chapter of the FTC’s assault on non-compete agreements by way of rulemaking and eliminates the enormous uncertainty for employers previously staring down the Rule’s September 4 effective date and its mandatory notice requirement. In Ryan, LLC v. FTC, the court found that (1) the FTC lacked statutory authority to promulgate the Rule and (2) the Rule is arbitrary and capricious. As to its first finding, the court concluded that the FTC lacked authority to promulgate substantive rules regarding unfair methods of competition. And with respect to its second finding, the court held that the Rule is arbitrary and capricious under the Administrative Procedure Act (“APA”) because it was unreasonably broad without any reasonable explanation. Having reached these conclusions, the court held that it was obligated to “hold unlawful” and “set aside” the Rule under the APA. In a break from its earlier preliminary injunction ruling – which stayed the Rule’s effective date only as to the plaintiffs in the case – the court explained that this setting aside has nationwide effect and is not limited to the named plaintiffs. Now that the FTC’s sweeping Rule has been set aside, employers can breathe a sigh of relief. However, an appeal is expected and hostility towards non-compete agreements still remains. Given this, employers should work with counsel to review existing agreements to ensure compliance with applicable state law while considering additional options to protect their legitimate business interests. You can read our previous advisories on the FTC’s Non-Compete Clause Rule here:
Client Advisories
08.09.2024
Philadelphia Property Reassessments for Tax Year 2025
The Philadelphia Office of Property Assessment has completed a citywide reassessment of more than 580,000 properties in Philadelphia to take effect tax year 2025. According to City assessment data, the aggregate value of all properties in Philadelphia has risen by more than 13 percent since tax year 2023.
Client Advisories
08.06.2024
Pennsylvania Federal Court is Latest Court Refusing to Halt FTC's Non-Compete Ban
In late July 2024, a Pennsylvania federal judge declined an employer’s request to enjoin the Federal Trade Commission’s non-compete Rule, which imposes a comprehensive ban on non-competes with most employees. This ruling is the latest court that declined to stop the FTC near-total ban on non-compete agreements, which is still set to take effect on September 4, 2024. Despite this, other federal courts will have more opportunities before September 4th to stop the FTC’s ban, so stay tuned. In this case, ATS Tree Services LLC v. Federal Trace, a tree-care company with twelve employees, who required its employees to sign non-compete agreements, sought to stop the FTC’s non-compete prohibition Rule. The tree company’s agreements prohibited the employees from working for direct competitors following separation in the geographic area the employee worked for one year.The court denied the injunction for two reasons: a lack of “irreparable harm” and an unlikelihood of winning the case on the merits. As to irreparable harm, the Court ruled that costs of compliance with the Rule – such as the expenses of sending out notices, attorney’s fees, and having to scale back specialized training – were nothing more than minimal costs, and were not sufficient to justify an injunction. The Court also felt that the risk of losing employees was merely speculative and a “risk” of irreparable harm is not enough. Perhaps more significant is the second part of the Court’s analysis, which concluded that the tree company was not likely to be successful on the merits of its claim that the FTC was acting outside of its authority. The Court found it “clear that the FTC is empowered to make both procedural and substantive rules as is necessary to prevent unfair methods of competition.” Further, the Court found that it has been well-demonstrated that Congress intended “to retain the existing authority empowering the FTC to prevent unfair methods of competition, and the discretion to determine the appropriate mechanisms to accomplish that directive.” In reaching this finding, the Court relied upon the FTC’s historical substantive rulemaking and Congress’s inaction of limiting the FTC’s substantive authority in the past, despite the opportunities to do so. Finally, the Court ruled that overlapping jurisdiction between state and federal governments in in this area also does not preclude the FTC from issuing rules to prevent unfair methods of competition. This is so, according to the Court, because parallel state laws are not entirely preempted, and conflicting state laws are rightfully preempted as the FTC is empowered to prevent “unfair methods of competition.” As of now, the Rule will take effect on September 04, 2024. Yet, as we have explained, several other legal challenges are pending, and one of more of them is expected to be decided before September 4th. So, an injunction or hold on the FTC’s Rule may still happen before the deadline. Our firm has issued a number of prior alerts on FTC’s Non-Compete Rule. Please see:
Client Advisories
07.25.2024
SCOTUS Stays Enforcement of EPA's "Good Neighbor Plan"
On June 27, 2024, the United States Supreme Court curbed the regulatory power of the administrative state, temporarily halting the Environmental Protection Agency’s “Good Neighbor Plan,” intended to limit air pollution traveling across state lines. This decision comes after Ohio, Indiana, West Virginia, and a handful of power and manufacturing industry groups challenged the plan under the Administrative Procedure Act and Clean Air Act. As a result, the EPA cannot enforce its plan until the resolution of the underlying legal challenges. The Good Neighbor Plan aims to protect downwind states that receive unwanted air pollution by significantly reducing emissions of nitrogen oxides from industrial facilities and power plants in twenty-three upwind states. Under the Good Neighbor Plan, each upwind state was given the opportunity to create a plan to reduce its downwind emissions. In 2023, the EPA decided that all twenty-three states had not provided sufficient plans and published its own federal plan for the states to follow. Ohio, Indiana, West Virginia, U.S. Steel Corp., and natural gas and energy groups challenged the EPA’s Good Neighbor Plan asserting that the nationwide plan takes possession of the state’s authority to design their own policies for managing emissions and forces purportedly impractical standards on companies. The number of affected states has since dropped to eleven as many circuit courts have already stayed the use of the plan after lawsuits were brought in individual states. The challengers of the Good Neighbor Plan claim that EPA’s use of its own plan constitutes a government overreach and adds a financial burden for costly adjustments needed under the EPA’s plan. They argue that the plan conflicts with the CAA’s instruction, giving individual states the authority to control their emissions. They also claim that the plan violates the APA by failing to adequately address concerns raised in comments, overstepping public concern. The EPA argues that it has given a reasonable explanation for creating the nationwide plan to decrease power plant emissions, which the agency believes is crucial to reduce interstate pollution and create a clean environment.In June 2024, the United States Supreme Court sided with the states and temporarily blocked the Good Neighbor Plan, finding that the states were likely to succeed on their challenges in the lower courts. The Court held that although the plan would help improve air quality, it would also violate the states’ interests in controlling their own manufacturing and residents. The Court further expressed that the EPA did not clarify or address the states’ concerns regarding the plan, as required under the APA. The fate of the Good Neighbor Plan will now be decided by the lower courts hearing the states’ challenges. For any questions, please contact Marc Rollo at mrollo@archerlaw.com or 856.673.3932 or Thomas Tyrrell at ttyrrell@archerlaw.com or 856.673.7149. DISCLAIMER: This client advisory is for general information purposes only. It does not constitute legal or tax advice, and may not be used and relied upon as a substitute for legal or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified attorney or tax practitioner licensed to practice in the jurisdiction where that advice is sought.
Client Advisories
07.25.2024
The "Ban-Wagon" Has Arrived in Pennsylvania Banning Many Non-Competes for Health Care Practitioners
Governor Josh Shapiro has signed the “Fair Contracting for Health Care Practitioner’s Act” (“the Act”), Pennsylvania’s first statute imposing limitations on the use of non-competes in the Commonwealth. Pennsylvania joins the growing list of a dozen states which have enacted legislative bans or limitations on healthcare provider non-competition agreements in recent years.The Act, which becomes effective January 1, 2025, represents the legislature’s response to the current trend of health system consolidation and direct health care practitioner employment, and is a seismic shift in the enforcement of non-compete covenants entered into between Pennsylvania employers and healthcare practitioners. Subject to certain exceptions, a “noncompete covenant” entered into after January 1, 2025 is “deemed contrary to the public policy and is void and unenforceable by an employer.” A “noncompete covenant” is defined as an “agreement that is entered into between an employer and a healthcare practitioner in this Commonwealth which has the effect of impeding the ability of the healthcare practitioner to continue treating patients or accepting new patients, either practicing independently or in the employment of a competing employer after the term of employment.” A “healthcare practitioner” is defined under statute and includes a medical doctor, a doctor of osteopathy, a certified registered nurse anesthetist and certified nurse practitioner, and a physician’s assistant.The Act does provide several specific exceptions. First, an employer may enforce a noncompete covenant if the length of the noncompete covenant is no more than one year, provided that the healthcare practitioner was not dismissed by the employer. Second, a noncompete covenant can be enforced as to a healthcare practitioner in ”(a) the sale of the healthcare practitioner’s ownership interest in, or all or substantially all of the assets of, the business entity; (b) a transaction resulting in the sale, transfer or other disposition of the control of the business entity; or (c) the healthcare practitioner’s receipt of an ownership interest in the business entity. However, a preexisting noncompete covenant may be rendered void and unenforceable if a healthcare practitioner is not a party to the sale, transfer or other disposition. Third, an employer may enforce contractual provisions that allow the employer to recover reasonable expenses from a healthcare practitioner, if the expenses are: (a) directly attributable to the healthcare practitioner and accrued within the three years prior to separation, unless separation is caused by dismissal of the healthcare practitioner; (b) related to relocation, training and establishment of a patient base; or (c) amortized over a period of up to five years from the date of separation by the healthcare practitioner.To ensure continuity of care between patients and providers, the Act requires employers to notify patients of a departing healthcare practitioner within 90 days following the departure of a healthcare practitioner from an employer. The employer must notify the healthcare practitioner’s patients seen within the past year of (a) the healthcare practitioner’s departure; (b) how the patient, if desired, may transfer the patient’s health records to the departed healthcare practitioner; and (c) that the patient, if desired, may be assigned to a new healthcare practitioner within the existing employer, to continue receiving care there.Archer's Labor & Employment Group will continue to monitor the impact of the Act when it takes effect in 2025 and thereafter, as the Act specifically mandates that by December 31, 2027, the Pennsylvania Health Care Cost Containment Council perform a study on the effects of the Act, and report its findings. For any questions, please reach out to Peter Frattarelli, Chair of the Labor & Employment Group, at 856.354.3012 or pfrattarelli@archerlaw.com, Thomas Muccifori, Chair of the Trade Secret Protection & Restrictive Covenants Group, at 856.354.3056 or tmuccifori@archerlaw.com, or Lisa Albright, Partner in the Healthcare Group, at 609.580.3710 or lalbright@archerlaw.com.DISCLAIMER: This client advisory is for general information purposes only. It does not constitute legal or tax advice, and may not be used and relied upon as a substitute for legal or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified attorney or tax practitioner licensed to practice in the jurisdiction where that advice is sought.
Client Advisories
07.08.2024
Federal Court in Texas Puts Hold on FTC's Ban - but Only for the Plaintiffs in That Case
Client Advisories
07.01.2024
Client Advisories
06.26.2024
Do Your Monthly Checks to Avoid Fines and Risk of Exclusion from Federal Health Care Programs
Healthcare facilities are urged to remember to perform regular checks of both state and federal lists of excluded individuals and entities – i.e. persons or organizations who are prohibited from participating in federal and state health care programs – to ensure that their employees, independent contractors and vendors are not on such lists. As a general rule, federal health care programs such as Medicare will not pay for items or services which are furnished, ordered, prescribed, or supplied, whether directly or indirectly, by an individual or entity (i.e. a “Person”) who has been excluded from participation in that federal health care program. If a healthcare entity employs or engages an excluded Person and then bills a federal health care program for any items or services the excluded Person directly or indirectly furnished, ordered, or prescribed, it may also be subject to Civil Monetary Penalties (“CMP”) liability under the False Claims Act (“FCA”). It is important to note that the prohibition on services is broadly defined so as to include not only direct care, but also indirect services such as filling prescriptions, providing transportation services, and performing administrative and management services that are not separately billable. While OIG guidance does permit entities to employ/engage an excluded Person who does not provide any items or services paid for, directly or indirectly, by federal health care programs, doing so requires significant caution and a strict curtailing of their roles and responsibilities to ensure protection from future liabilities. While the regulations concerning exclusions have existed for almost fifty years, it is clear that they remain an important area of enforcement. Since 2023, the federal Office of Inspector General has issued over $2.5 million in CMPs to healthcare entities who have employed an excluded individual.In addition to the federal requirements surrounding excluded individuals, many states have not only adopted versions of the federal exclusion requirements, but have created their own exclusion criteria and penalties associated with employing an excluded individual. For this reason, participating providers should consult not only the federal guidance on exclusion checks, but also their state requirements. Best Practices to Ensure Compliance The responsibility of remaining compliant with state and federal exclusion provisions falls to the billing healthcare provider/ facility. The easiest method to ensure compliance is to maintain a robust compliance program within the entity through the development of policies and procedures that mandate routine checks of all employees and vendors against state and federal exclusion lists. Entities should also maintain records of these completed checks. Because the applicable lists are generally updated every thirty (30) days, it is recommended that entities perform checks upon engagement or employment, as well as every thirty (30) days thereafter. For healthcare providers in New Jersey, we recommend a monthly review of the following databases:
Client Advisories
05.13.2024
Client Advisories
04.30.2024
USEPA Announces Proposed Rule to Designate Two PFAS Compounds as Hazardous Substances Under CERCLA
Client Advisories
04.25.2024
State Tax Equalization Board Releases 2023 Common Level Ratios
The State Tax Equalization Board (STEB) has released its Common Level Ratio (CLR) of assessed value to market value for each county in Pennsylvania for calendar year 2023 (applicable to tax appeals filed for tax year 2025). The CLR can be used to convert fair market values into assessed values in conjunction with property tax appeals, subject to a taxpayer’s right to claim a lower ratio to reflect the same level of assessed value to fair market value for similarly situated property. The 2023 CLRs can be viewed here.
Client Advisories
04.24.2024
On April 23, 2024, the Department of Labor (“DOL”) announced long-awaited revisions to overtime regulations under the Fair Labor Standards Act (“FLSA”). The most important change will allow many more workers to receive overtime pay because the DOL raised the minimum salary that employees must receive before they can ever be exempt from overtime under the recognized “white collar” exemptions for executives, professionals, and administrative employees. The DOL also finalized its proposed changes to the separate highly compensated employee exemption’s total annual compensation requirement methodologies. The revised earning thresholds will become effective on July 1, 2024, and will increase again, significantly, on January 1, 2025.
Client Advisories
04.23.2024
Federal Trade Commission Makes Good on Promise to Ban Non-Competes
Client Advisories
04.17.2024
Ban on the Run: Federal Trade Commission’s Proposed Non-Compete Ban Headed to Vote
Client Advisories
04.11.2024
USEPA Announces Final National Primary Drinking Water Regulation for PFAS Compounds
On April 10, 2024, the United States Environmental Protection Agency (USEPA) announced the final National Primary Drinking Water Regulation (NPDWR) to establish legally-enforceable Maximum Contaminant Levels (MCLs) for certain per- and polyfluoroalkyl substances (PFAS) in drinking water. The individual compounds covered by the proposed regulation are: perfluorooctanoic acid (PFOA), perfluorooctane sulfonic acid (PFOS), perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid (HFPO-DA, sometimes referred to as “GenX” compounds), and perfluorohexane sulfonic acid (PFHxS). Additionally, the final rule covers PFAS mixtures containing at least two or more of PFHxS, PFNA, HFPO-DA, and perfluorobutane sulfonic acid (PFBS) using a Hazard Index MCL to account for the combined and co-occurring levels of these PFAS in drinking water.
Client Advisories
04.10.2024
An Update on the NY LLC Transparency Act
The federal Corporate Transparency Act (the “CTA”) became effective on January 1, 2024. However, it is not the only legislation requiring the disclosure of a private company’s beneficial owners. On December 22, 2023, New York Governor Kathy Hochul signed the New York LLC Transparency Act (the “NYLTA”). On March 1, 2024, she signed a chapter amendment to the same, which amended certain provisions and prescribed final rules for the NYLTA. Among other changes, this amendment postponed the NYLTA’s original effective date of December 21, 2024. Now, new LLCs formed or registered after January 1, 2026 must comply with the NYLTA within 30 days of formation/registration and LLCs existing prior to January 1, 2026 must comply by January 1, 2027.
Client Advisories
03.27.2024
Understanding Quid Pro Quo Contributions for Your Nonprofit Gala
Final ThoughtsHosting a fundraising gala can be an exciting and rewarding endeavor for your nonprofit organization. However, it’s essential to remember the legal and regulatory obligations that come with soliciting contributions from donors.By understanding and adhering to the IRS rules regarding quid pro quo contributions and state charitable solicitation laws, you can protect your organization’s tax-exempt status, maintain donor trust, and pave the way for continued success in your fundraising efforts. For more information, please contact Noel Fleming at 267.422.9855 or nfleming@archerlaw.com, or Kayci Petenko at 267.422.9856 or kpetenko@archerlaw.com. DISCLAIMER: This client advisory is for general information purposes only. It does not constitute legal or tax advice, and may not be used and relied upon as a substitute for legal or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified attorney or tax practitioner licensed to practice in the jurisdiction where that advice is sought.
Client Advisories
03.25.2024
Nothing Has Changed with the Corporate Transparency Act
On March 1, 2024, a federal district court in Alabama ruled that the Corporate Transparency Act (“CTA”) is unconstitutional and enjoined FinCEN from enforcing the CTA against the plaintiffs. We will spare you the details of the court’s decision in National Small Business United v. Yellen, No. 5:22-CV-1448-LCB, (N.D. Ala. Mar. 1, 2024). However, the injunction applies only to the plaintiffs in the Alabama lawsuit. In this regard, on March 4, 2024, FinCEN issued a press release essentially implying that it will continue to enforce the CTA against everyone except the plaintiffs in the Alabama lawsuit. On March 11, 2024, the U.S. Treasury Department filed an appeal to the U.S. Court of Appeals for the Eleventh Circuit.We cannot predict how the Eleventh Circuit will decide the appeal, but regardless how it rules, it seems likely that the case will be appealed to the U.S. Supreme Court. In that event, it seems unlikely that the issue would be resolved by the end of the year. Further, the federal court in Alabama provided Congress with an outline on how to amend the CTA to make it constitutional, so that is a possibility. We do not believe that the CTA will go away, so our advice at this time is as follows:
Client Advisories
03.19.2024
The Shifting Landscape of Esports Leagues
Compared to traditional sports, esports are in a constant state of flux at almost every level. New games enter the competitive scene as they are released or gain popularity, and the games themselves experience updates and balance changes throughout the year, from minor tweaks to new playable characters or maps. These changes are almost entirely decided by the games’ developers, who control not just the content of the games, but also have substantial influence over the competitions involving them, creating a tournament landscape that can be difficult to navigate for newcomers and professionals alike.