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President Trump has taken quick action to ramp up immigration enforcement in his first days in office. While Trump’s early focus on deportations and border security is not new, the swift and aggressive enforcement approach represents a significant change as compared to prior administrations. These actions have led to arrests and heightened concerns among employers and employees alike.


What do employers need to know?

Since Trump’s inauguration, there has been a significant increase in targeted enforcement measures against individuals present in the United States who are not U.S. citizens who have a criminal record, and also recent arrivals to the United States who do not hold lawful immigration status. The vast majority of immigration enforcement since January 20 has occurred in private residences and public spaces, though there have been immigration enforcement actions at worksites. There have not been reports of wide-scale worksite raids yet, though the focus may shift to worksite inspections in the next wave of enforcement activities.

Worksite enforcement inspections can take a variety of shapes. In particular, employers should be prepared for the following:

  • Fraud audits in relation to employer-sponsored visa holders;
  • Administrative I-9 audits;
  • Arrests of targeted individuals; or
  • Raids based on suspicion of undocumented workers at worksite facility.
Continue Reading The Post-Inauguration Playbook: Spotlight on Immigration Enforcement and Raids

The Supreme Court of the United States recently settled a circuit split on the standard of proof required to classify employees as exempt from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay provisions. In a unanimous opinion, SCOTUS held in EMD Sales, Inc. v. Carrera that the “preponderance of the evidence” standard–and…

Here’s your go-to guide for annual filing and reporting requirements for global employee share plans.

It is almost the end of the calendar year and time for multinational companies to consider the necessary tax and regulatory filings for global share plans triggered by the close of 2024 (or by the end of a local…

US companies have been granting various forms of share-based awards to employees around the globe for many years, and companies in other countries are increasingly following suit.

Because share-based awards are ubiquitous, and for many companies an important part of the total pay package, we are now also seeing an increasing number of lawsuits and other disputes involving such awards.

Broadly, these disputes can be categorized as follows:

Entitlement Claims

These can arise if a company is eliminating or paring back a previously offered share program. In this case, employees who are no longer eligible for awards or receive less/reduced awards may claim that they have become entitled to the awards, such that the company cannot unilaterally eliminate/reduce the program without otherwise compensating the employee. Employees may also try to raise constructive dismissal claims.

A related issue in this situation is whether a company has to notify or consult with existing Works Council or other employee representative bodies regarding the changes to the share program. If Works Council is found to have a consultation right, implementing the change without such consultation can be very problematic and Works Council can take the company to court.

Increased Severance Pay

If an employee is involuntarily terminated, they are often entitled to statutory severance pay. Severance pay is typically calculated based on the employee’s salary paid during a certain period prior to termination. If share-based award income has to be included as salary for this purpose, this can increase (in some cases, significantly) the amount of severance pay due to the employee.

Continue Reading Mitigation Strategies for Claims Related to Share-Based Awards

We are pleased to share with you The Global Employer – Global Immigration & Mobility Quarterly Update, a collection of key updates from Austria, Italy, Japan, Philippines, Singapore, Thailand, and the United States.

Click here to view.

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

Employers have been eagerly awaiting the EEOC’s Final Rule to implement the Pregnant Worker Fairness Act, and it’s (finally!) here. On April 15, the EEOC issued the Final Rule, which largely follows the proposed rule (we blogged about the proposed rule here, and about the PWFA here). The Final Rule was published in the Federal Register on April 19, 2024 and will take effect on June 18, 2024. There are no major surprises for employers, but the Final Rule has arrived with a bit of controversy.

Continue Reading Special Delivery: The PWFA Final Rule Has Arrived

On April 23, the Federal Trade Commission voted 3-2 to issue its final rule on noncompetes, imposing a near-total ban on all employer-employee noncompetes in the US. Barring challenges (the first lawsuits have already been filed), the rule would become effective 120 days from publication.

The rule will be a game-changer for companies operating in the US if it takes effect as issued.

Breaking it Down

What does the rule do?

With only a few exceptions, the FTC’s now-final rule declares employer-employee noncompete clauses an “unfair method of competition,” and a violation of Section 5 of the FTC Act. The rule targets both formal noncompete clauses and “functional noncompete” clauses that have the effect of prohibiting the worker from seeking or accepting employment with a person or operating a business after the conclusion of the worker’s employment with the employer. This can include broad nondisclosure agreements that have the effect of precluding workers from seeking employment opportunities in the same field.

Continue Reading Breaking News: The FTC Bans Nearly All Employer-Employee Noncompetes Except Those Given as Part of a ‘Bona Fide’ Sale of Business