Category: Corporate & Business law
New Law in Minnesota Voids Most Covenants Not to Compete
June 5, 2023 | Scott M. LepakThe Minnesota legislature is poised to pass a law that generally prohibits employers from entering into new covenants not to compete in Minnesota except in narrow instances. It is expected that the governor will sign the bill when it is presented to him. If signed, it will become effective the day following the governor’s signature and will apply to contracts and agreements entered into on or after that date. Pursuant to this bill, a covenant not to compete is defined as an agreement between an employee and employer that restricts the employee, after termination of employment, from performing work: for another employer for a specified period of time; in a specified geographical area; or for another employer in a capacity that is similar to the employee’s work for the employer that is a party to the agreement. These limitations are important given that the courts in Minnesota have generally refused to enforce covenants not to compete where there is not a specified time limit (i.e. it applies forever) or geographic limit (it applies across the entire planet). This new law will broadly apply to employers who are individual(s), partnership, association, corporation, business, trust, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to…
Read MoreCorporate Transparency Act Part 2 Beneficial Owner – Exercising Substantial Control
April 14, 2023 | Carole Clark Isakson
Update December 19th, 2024 On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Garland, enjoining the federal government from enforcing the Corporate Transparency Act (CTA) and its reporting deadlines. On December 13, 2024, the Department of Justice (DOJ) filed an Emergency Motion for Stay Pending Appeal in the Fifth Circuit requesting an expedited briefing schedule and a ruling “as soon as possible, but in any event no later than December 27, 2024, to ensure that regulated entities can be made aware of their obligation to comply before January 1, 2025.” Reporting companies should continue monitoring developments in the coming days in case the January 1, 2025 deadline for filing is reinstated. The Corporate Transparency Act (the “CTA”) was enacted by Congress on January 1, 2021 as part of the federal government’s initiative to crack down on illicit activities. Effective January 1, 2024, most new and existing entities registered to do business in the United States will be mandated to file a report with the Financial Crimes Enforcement Network (“FinCEN”) disclosing information about the entity’s beneficial owners. The CTA defines a beneficial owner as any individual who, directly or indirectly, either exercises “substantial control” over…
Read MoreCorporate Transparency Act: Part I
February 9, 2023 | Carole Clark Isakson
Update December 19th, 2024 On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Garland, enjoining the federal government from enforcing the Corporate Transparency Act (CTA) and its reporting deadlines. On December 13, 2024, the Department of Justice (DOJ) filed an Emergency Motion for Stay Pending Appeal in the Fifth Circuit requesting an expedited briefing schedule and a ruling “as soon as possible, but in any event no later than December 27, 2024, to ensure that regulated entities can be made aware of their obligation to comply before January 1, 2025.” Reporting companies should continue monitoring developments in the coming days in case the January 1, 2025 deadline for filing is reinstated. An Introductory Overview Congress passed the Corporate Transparency Act (the “CTA”) in 2020 as part of its initiative to crack down on illicit activities, such as money laundering, commonly associated with shell companies. Under the CTA, many entities formed or registered to do business in the United States will be required to report various information concerning beneficial ownership of/decision-makers for, a given company. The Financial Crimes Enforcement Network (“FinCEN”), under the direction of the United States Department of the Treasury, has been tasked…
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