Managing Transformative Deals: 5 Challenges to Maximize Value
CEOs leverage M&A to scale operations, diversify offerings and break into new markets. But what are the challenges to getting the best out of transformative transactions to achieve long-term growth?
To maximize value, CEOs must look beyond financial metrics, aligning acquisitions with broader organizational goals while overcoming challenges such as navigating an intricate legal and
Illinois Employer 2025 Checklist: Top 10 Changes to Know This January
From the requirement of pay scales and benefits in job postings to new protected classes under the Illinois Human Rights Act, 2025 promises to be yet another year of significant change for Illinois employers. While you determine how to navigate the new Illinois employment laws taking effect this year (and next!), review this checklist and
End of Year Employment Law Updates! Tune in to our review / previews in California, Illinois, Canada and Mexico
2024 was a ‘super year’ for elections. Half of the world’s population – some 4.7 billion people – went to the polls in 72 countries. Political shifts often lead to significant changes in employment laws. We’re here to help you prepare for the changes ahead and to stay ahead of the curve on employment law developments
Immigration and Mobility Issues in Corporate Transactions (Video Chat)
Immigration and mobility considerations can significantly impact corporate transactions, especially those in cross-border deals. Employers must ensure continued work authorization for impacted employees, manage visa statuses in other countries, and identify and address immigration issues up front. In our latest Global Immigration and Mobility Video chat, our on-the-ground immigration and mobility attorneys from EMEA, Latin
Illinois Joins Colorado and NYC in Restricting Generative AI in HR (Plus a Quick Survey of the Legal Landscape Across the US and Globally)
SHRM reports that one in four organizations currently use AI to support HR-related activities, with adoption of the technology expanding rapidly. The compliance risks arising from generative AI use also are intensifying, with an increasing number of state and local laws restricting employer use of AI tools in the United States. And not to be outdone, substantial regulation impacting multinational employers’ use of AI is emerging in other parts of the world (e.g., the EU AI Act).
One rapidly growing use case is applicant recruiting and screening, a trend likely to continue given recent increases in remote hiring and hybrid work arrangements. AI tools can streamline talent acquisition tasks by automatically sorting, ranking, and eliminating candidates, as well as potentially drawing from a broader and more diverse pool of candidates.
Employers who use AI tools must comply with significant new (and existing) laws that focus on data protection, privacy, information security, wage and hour, and other issues. The focus of this blog, however, is the legislative efforts in the US to protect against algorithmic bias and discrimination in the workplace stemming from the use of AI tools to either replace or augment traditional HR tasks.
IL Becomes the Second State (After CO) to Target Workplace Algorithmic Discrimination
On August 9, 2024, Gov. Pritzker signed H.B. 3773, making it unlawful for employers to use AI that has the effect of discriminating against employees on the basis of protected class in recruitment, hiring, promotion, discipline, termination and other terms, privileges or conditions of employment. The law, effective January 1, 2026, also prohibits employers from using ZIP codes as a stand-in or proxy for protected classes.
Like Colorado, Illinois’ new law also contains a notice requirement: employers must notify applicants and employees when using AI with respect to “recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment.”
Continue Reading Illinois Joins Colorado and NYC in Restricting Generative AI in HR (Plus a Quick Survey of the Legal Landscape Across the US and Globally)
Cultivating a Healthy Workforce Strategy: Global Employment Law Updates, Trends and Tips Webinar Series
We’re bringing the world to you. Join Baker McKenzie for our annual Global Employment Law webinar series.
In the face of intensifying geopolitical risk and continuing economic uncertainty, the challenges for global employers to plan carefully and operate strategically to maintain a thriving workforce is greater than ever. We’ll help employers navigate those challenges in
Still Going Strong: M&A Noncompetes and the FTC’s Final Rule on Noncompetes
On Tuesday this week, the Federal Trade Commission (FTC) issued its highly anticipated final rule on noncompetes, imposing a near-total ban on worker noncompetes in the United States. Barring injunctive relief from legal challenges (which have already started), the rule will take effect 120 days from publication in the federal register.
Interestingly, the rule exempts noncompete covenants entered into pursuant to a bona fide sale of a business. While “bona fide” is not defined in the final rule, the Supplementary Information for the rule explains that the FTC considered but rejected percentage and dollar minimum thresholds for the sale of business exception to weed out “exploitative and coercive” noncompetes and clarified that excepted noncompetes must be given “pursuant to a bona fide sale.” The Supplementary Information further explains that the FTC considers a bona fide sale to be one that is made between two independent parties at arm’s length, and in which the seller has a reasonable opportunity to negotiate the terms of the sale. In contrast, the FTC specifically calls out as problematic “springing noncompetes,” which apply to employees in the event of a sale and mandatory stock redemption or repurchase programs because the employee has no goodwill to exchange in the sale for the noncompete and no meaningful opportunity to negotiate at the time of contracting.
Nevertheless, the bona fide sale exception is broad and preserves the status quo by allowing buyers in M&A transactions to obtain noncompetes from individual sellers in circumstances where such noncompetes are otherwise permitted currently. While the pending and anticipated legal challenges to the rule are significant and place the entire rule in jeopardy, the sale of business exception is not likely to be narrowed because of these challenges.
So, what does this new regime mean for M&A?
What Type of Noncompetes Are Impacted?
The Supplementary Information confirms that the new rule does not apply to B2B noncompetes or nonsolicits. Instead, the focus of the rule is noncompetes with workers that limit their ability to work for others. So the rule does not impact current B2B agreements.
Second, the FTC repeatedly makes the point that noncompetes must meet existing state and federal law restrictions (e.g., reasonable in scope and duration; limited to the goodwill to be acquired, etc.) to be enforceable, even if they otherwise fall within the sale of business exception in the new rule. This is the case because the FTC rule creates a new floor for noncompetes by preempting more lax state rules, but it does not preempt more stringent state laws or federal antitrust restrictions.
Continue Reading Still Going Strong: M&A Noncompetes and the FTC’s Final Rule on Noncompetes
A Legislative Snowstorm: Key 2024 Updates for Illinois Employers Include a Number of New Leave Obligations and More
Illinois employers navigated an avalanche of new laws in 2023, with more on the horizon in 2024 (and even 2025). New paid leave obligations for Illinois (and Chicago and Cook County) employers are a significant change, and additional developments expand employer liability in some circumstances where individuals are victims of gender-related violence. There are also new obligations for employers who use temporary employees, and increased protections for striking workers–not to mention a soon-to-be requirement for employers to include pay scale and benefits information in job postings starting January 1, 2025.
Here are key updates that Illinois employers should be aware of for 2024–and beyond.
1. New paid leave laws in Illinois, Chicago and Cook County
Employers in Illinois, Chicago and Cook County have new paid leave obligations for 2024 under three new laws:
- The Illinois Paid Leave for All Workers Act (PLAWA) (effective January 1, 2024) requires Illinois employers to provide most employees with a minimum of 40 hours of paid leave per year to be used for any reason at all–not just for sick leave.
- The Cook County Paid Leave Ordinance (effective December 31, 2023, the sunset date of the prior Cook County Earned Sick Leave Ordinance) covers employees who work in Cook County and largely mirrors the PLAWA. The Cook County Commission on Human Rights will begin enforcement of the paid leave Ordinance on February 1, 2024.
- The Chicago Paid Leave and Paid Sick and Safe Leave Ordinance (effective July 1, 2024) will require covered employers to provide eligible employees 40 hours of paid sick leave and 40 hours of paid leave (the latter usable for any reason) per 12-month accrual period, for a total entitlement of up to 80 hours of PTO per 12-month period.
Importantly, under both the PLAWA and the Cook County Paid Leave Ordinance:
- Eligible employees earn 1 hour of paid leave for every 40 hours worked, up to a minimum of 40 hours in a 12-month period (with exempt employees presumed to work 40 hours per workweek for accrual purposes, but leave accrues based on their regular workweek if their regular workweek is less than 40 hours)
- Though unused accrued paid leave from one 12-month period can be carried over to the next, employers can cap the use of paid leave in one 12-month period to 40 hours
- Frontloading is permitted, and employers who frontload 40 hours at the beginning of the 12-month period are not required to carry over unused accrued paid leave
- Employers cannot require employees to provide a reason they are using paid leave, or any documentation or certification as proof or in support of paid leave
The Chicago Paid Leave Ordinance diverges from the PLAWA and the Cook County Ordinance in several ways, including:
- Covered employees will accrue one hour of paid sick leave and one hour of paid leave for every 35 hours worked-five hours less than what is required to accrue an hour of paid leave under the PLAWA or Cook County Ordinance
- Employees may carryover up to 80 hours of paid sick leave and up to 16 hours of paid leave from one 12-month accrual period to the next
- Employers may frontload 40 hours of paid sick leave and 40 hours of paid leave on the first day of the 12-month accrual period. Frontloaded paid leave does not carry over from one 12-month period to the next (unless the employer prevents the employee from having meaningful access to their PTO), but up to 80 hours of unused paid sick leave does
- Employers with more than 50 employees in Chicago are required to pay the employee the monetary equivalent of unused accrued paid leave when an employee separates from the employer or transfers outside of the City of Chicago (see chart below for specifics)
- Unlike in the PLAWA or Cook County Ordinance, unlimited PTO is specifically addressed in the Chicago Paid Leave Ordinance (so employers with unlimited PTO policies should review the Ordinance closely)
Annual US Employer Update Series 2023–2024
In 2023, we helped US employers overcome a host of new challenges across the employment law landscape. Many companies started the year with difficult cost-cutting decisions and hybrid work challenges. More recently, employers faced challenges around intense political discourse boiling over in the workplace. We’ve worked hard to keep our clients ahead of the curve on these