What the FTC’s New Ban on Noncompete Agreements Might Mean for Your Business
In January 2023, the FTC proposed a groundbreaking rule to ban noncompete agreements, sparking significant public debate. Following a recent 3-2 vote, the final rule classifies these agreements as an “unfair method of competition,” promising to reshape the business landscape. With potential benefits like the creation of over 8,500 new businesses annually and increased earnings for workers, employers must prepare for the rule’s implementation by Fall 2024. Discover how this change could impact your organization and what steps you need to take to adapt. Read on to learn more about the implications for your business!
FTC Amends Safeguards Rule to Expand Notification Requirements for Data Breaches and Information Security Events
On October 27, 2023, the FTC announced amendments to its Safeguards Rule requiring non-banking financial institutions—such as mortgage brokers, accountants, investment advisers, car dealers, and payday lenders—to maintain comprehensive information security programs and report breaches involving unencrypted data of 500 or more consumers within 30 days. The amendments, effective 180 days after publication, aim to enhance transparency and incentivize stronger protection of sensitive consumer financial information.
New Antitrust Merger Guidelines Portend Big Changes
In July 2023, the Federal Trade Commission and the Antitrust Division of the Department of Justice unveiled revised Merger Guidelines that signal a shift towards more aggressive antitrust enforcement. These new guidelines aim to protect consumer welfare and encourage innovation while scrutinizing mergers that could lead to increased market concentration. With a focus on 13 key principles, including the examination of potential competition and the impact on labor markets, the proposed changes could reshape the landscape of mergers and acquisitions. Discover how these guidelines may deter corporate deals and what it means for the future of antitrust regulation.
Dramatic Changes for Premerger Clearance is First in 45 Years
The federal antitrust agencies have proposed sweeping changes to the Hart-Scott-Rodino (HSR) premerger notification process that would significantly expand initial filing requirements for M&A transactions. The proposed revisions would require far more detailed narratives, extensive document production, expanded disclosure of corporate governance and ownership structures, broader reporting of prior acquisitions, labor information, foreign subsidies, and internal communications systems—all within the initial 30-day waiting period. If adopted, these changes would effectively front-load much of the investigative burden traditionally reserved for second requests, substantially increasing the cost, complexity, and risk of delay for even non-problematic transactions.
FTC’s Proposed Ban on Noncompete Agreements — Delayed Again, But Not Dead Yet
In January 2023, the FTC proposed a rule to ban noncompete agreements, claiming it could increase wages by nearly $300 billion annually and benefit 30 million Americans. Labor unions support the initiative, while business groups challenge the FTC’s authority. The comment period has been extended, with a final vote planned for April 2024. As opposition to noncompetes grows, their future remains uncertain. What does this mean for employers and workers?
Hart-Scott 2023 Premerger Filing Fees Increase Substantially
The Federal Trade Commission has updated the Hart-Scott-Rodino Act, impacting premerger filing fees and thresholds. Larger transactions now incur higher fees, while smaller ones enjoy reductions. The minimum transaction size for filings is now $111.4 million, which lowers the number of deals requiring scrutiny. This year’s changes also introduce new fee tiers for deals over $1 billion and higher penalties for non-compliance. Companies considering mergers must navigate these updates carefully to avoid costly consequences.
A Large Merger, Acquisition or Joint Venture in Your Future? –Updated HSR Merger Notification Threshold Tests for Federal Antitrust Review Apply February 27, 2020
On January 31, the FTC issued its annual adjustments to the Hart-Scott-Rodino (HSR) Act reporting thresholds, modestly increasing the size-of-transaction and size-of-parties thresholds. The revised thresholds will take effect 30 days after publication in the Federal Register and remain in place until the next annual adjustment in early 2021. The changes also increase the maximum civil penalty for HSR violations to $43,280 per day, reinforcing the need for careful premerger compliance.
Contemplating a Sizable Merger, Acquisition or Joint Venture?–Updated HSR Merger Notification Threshold Tests for Federal Antitrust Review Apply in March 2019
Are you considering a merger, acquisition, or joint venture? Recent changes to the Hart-Scott-Rodino Act have increased reporting thresholds for federal antitrust review to $90 million, along with new filing fees. Understanding these updates is crucial for businesses in this landscape. Increased penalties for non-compliance highlight the need for HSR counsel. Stay informed to keep your transactions compliant and strategic.