On March 21, 2024, the Federal Energy Regulatory Commission (FERC) proposed rulemaking [1] that will change the way in which generators receive compensation. Specifically, FERC proposed to prohibit compensation for reactive power produced within the standard power factor range. Though it has been the standard for transmission providers to compensate generators for reactive power, FERC decided that this compensation is unjust and unreasonable. [2] The proposed rule states that: transmission providers would be required to pay an interconnection customer for reactive power only when the transmission provider asks the interconnection customer to operate its facility outside the standard power factor… Read more
On Tuesday, April 23, 2024, the Department of Labor (the “DOL”) issued final regulations regarding investment fiduciary obligations and the definition of an “Investment Advice Fiduciary” (the “Final Regulations”) under the Employee Retirement Income Security Act of 1974 (“ERISA”). We discussed the proposed fiduciary rules published in October in a past Client Alert. The Final Regulations take effect on September 23, 2024. While the final regulations are more narrow than both the regulations proposed last October and the final regulations that were invalidated by the Fifth Circuit Court of Appeals in 2018, they almost surely will be challenged in federal… Read more
Introduction On April 23, 2024, the Federal Trade Commission, chaired by Lina Khan, passed a comprehensive ban on non-compete agreements. The FTC has determined that “non-competes are an unfair method of competition” and that a business conducts an unfair method of competition by entering into or enforcing non-competes with workers. “Workers” notably includes a broad swath of individuals, including employees, independent contractors, externs, interns, volunteers, apprentices, and sole proprietors who provide a service to a person. According to the FTC, one in five Americans will be directly affected by the new rule. The FTC’s focus on combating unfair methods of… Read more
On April 23, 2024, the U.S. Department of Labor (“DOL”) issued its final rule on “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees”, which extends overtime protections to a significant number of salaried employees unless their salaries are increased to meet the new threshold. The effective date for the new rule is July 1, 2024, although the rule’s effect may be delayed based on anticipated legal challenges. The Fair Labor Standards Act (“FLSA”) requires most employers to pay employees overtime compensation at the rate of one and one-half times the regular rate of pay… Read more
On April 15, 2024, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued a preview notice of the final rule implementing the Pregnant Workers Fairness Act (“PWFA”). The PWFA became effective on June 27, 2023, and the EEOC published its proposed regulations on the PWFA in the Federal Register in August 2023. The final rule will be published in the Federal Register on April 19, 2024, and is expected to take effect on June 18, 2024. The PWFA applies to all private and public sector employers with at least 15 employees and expands existing protections under Title VII of the Civil… Read more
On March 26, 2024, the Francis Scott Key Bridge collapsed. Spanning the Port of Baltimore, the Bridge was one of the busiest in the United States, handling more than 444,000 passengers and $80 billion in foreign cargo each year. The collapse of the Bridge will significantly impact supply chains, particularly in the automotive, farming, and construction industries. Businesses relying on either the Bridge or the Port of Baltimore for their supply chain operations may experience challenges in sourcing materials, fulfilling orders, and meeting contractual obligations. Given the potential for prolonged disruptions, it is crucial for affected parties to assess the… Read more
The U.S. District Court for the Northern District of Illinois (the “District Court”) recently entered a temporary injunction halting enforcement of certain benefits-related provisions under the Illinois Day and Temporary Labor Services Act (the “DTLSA”). These benefits-related provisions were previously set to take effect on April 1, 2024. “Equivalent Benefits” Requirements. The benefits-related provisions of the DTLSA gave staffing agencies operating in Illinois a choice: Pay their staffing employees who were assigned to work at a client site for more than 90 days within a year at least the same wages and “equivalent benefits” as the lowest paid, comparable employee… Read more
On March 8, 2024, the United States District Court for the Eastern District of Texas invalidated the recently issued final rule for establishing joint employer status under the National Labor Relations Act (“NLRA”). As we previously reported, on October 27, 2023, the National Labor Relations Board (“NLRB”) issued a final rule on the criteria for establishing joint employer status under the NLRA, rescinding the 2020 joint-employer rule of “direct and immediate control.” The federal court criticized the new proposed joint-employer standard, which posited that an entity could be deemed a joint employer of a group of employees if each entity… Read more
On January 1, 2024, the Corporate Transparency Act (“CTA”) went into effect. The intent of the CTA is to bring the United States into compliance with international anti-money laundering standards. The CTA requires certain entities to register with the Financial Crimes Enforcement Network bureau of the United States Department of the Treasury (“FinCEN”) and provide FinCEN with certain limited personal information regarding their beneficial owners and company applicants. CTA Filing Deadlines The following filing deadlines apply to entities that are required to make filings with FinCEN under the CTA: Entities formed or registered prior to January 1, 2024 have until… Read more
History of 401(k) Plan Excessive Fee Cases. Once the Department of Labor’s participant fee disclosure rules for retirement plans became effective in 2012, the plaintiffs’ bar latched onto recordkeeping and investment fees paid by 401(k) plans, and the number of lawsuits claiming excessive fees exploded. In the early cases, participants filed lawsuits against the plans’ recordkeepers claiming that they overcharged the plans. However, as courts consistently ruled that the recordkeepers were not fiduciaries and had no duty to charge low or even reasonable fees, the focus of these lawsuits pivoted to the plan fiduciaries. Now, hundreds of fee cases are… Read more
