Business Law

The Department of Labor’s (DOL) recent overhaul of overtime regulations, effective July 1, 2024, has sent ripples through the business world. The increased salary threshold to qualify for the white-collar exemptions has expanded the pool of employees eligible for overtime pay, necessitating a comprehensive re-evaluation of workforce classifications for many employers. As the DOL states, “The final rule updates and revises the regulations issued under section 13(a)(1) of the Fair Labor Standards Act implementing the exemption from minimum wage and overtime pay for executive, administrative, professional, and outside sales employees.” This adjustment is a significant departure from previous standards and may have far-reaching implications for you as a business owner.    The Impact of the New Overtime Regulations on Businesses The elevated salary threshold means that millions of workers who were previously classified as exempt from overtime rules may now be eligible to receive overtime pay. While this change aims to provide additional financial security for workers, it presents substantial challenges for employers. Increased labor costs due to overtime payments are a direct consequence. Furthermore, the risk of misclassification claims has escalated, with potential penalties and damages significantly impacting a company’s bottom line. To mitigate these risks, business owners should: Review each employee’s role: Revisit each member of your team’s classification and determine if they are exempt or non-exempt. Review job duties, responsibilities, and the exercise of discretion and independent judgment. Update employee handbooks and policies: Ensure that these documents accurately reflect the new overtime regulations. Clear and up-to-date policies can help prevent misunderstandings and disputes. Implement robust timekeeping systems: Accurate timekeeping is paramount for calculating overtime pay correctly. Reliable timekeeping systems are essential for complying with the new regulations. Train managers and supervisors: Provide appropriate training to managers and supervisors on the new overtime rules to ensure consistent application and avoid costly errors. Stay informed about developments: Labor laws are subject to change, so businesses must stay informed about any modifications or interpretations of the overtime regulations. The Importance of Legal Counsel The new overtime regulations present a significant challenge for businesses of all sizes. Failure to comply can result in substantial financial penalties and reputational damage. It’s essential to recognize that these changes are not merely administrative adjustments; they represent a fundamental shift in labor law that impacts the core operations of many businesses.  We encourage you to find trusted legal counsel to help guide you. Why does this change matter to businesses? It’s important for business owners to stay up to date with the latest legal developments for both protecting their businesses and also ensuring they are keeping their employees’ best interests in mind. Failure to comply with updated regulations could result in: Increased Labor Costs: The expansion of overtime eligibility can lead to significant increases in payroll expenses. Compliance Risks: Misclassification of employees can result in costly lawsuits, penalties, and back wages. Operational Disruptions: Implementing new timekeeping systems and adjusting payroll processes can be time-consuming and disruptive. Competitive Disadvantages: Businesses that fail to comply with the new rules may face unfair competitive pressures. Given the complexities of the new overtime regulations, seeking experienced legal counsel well-versed in the nuances of business law in Kansas and Missouri is highly recommended. Business law attorneys can provide informed and grounded guidance on: Assessing your current classification practices Developing strategies for compliance Implementing new policies and procedures Mitigating the risk of litigation Understanding the potential impact of the new rules on your business By partnering with trusted business lawyers, business owners can navigate these changes with confidence and minimize the potential negative consequences. Remember, prevention is key. Proactive steps taken now can save your business time, money, and headaches in the long run. How MSB Law Can Support Your Business At MSB Law, we understand how overwhelming the new overtime regulations can be for business owners like you. You’re not just running a business; you’re supporting employees, families, and a community. We’re here to walk with you through these changes, providing the guidance and care you need to protect what you’ve worked so hard to build.  Let us help you navigate this transition with confidence, ensuring your business stays compliant and your team stays secure. Contact us to request a free consultation.

On April 23, 2024, the US Federal Trade Commission issued a final rule banning many noncompete agreements nationally, with some exceptions. This came months after California led the charge with Senate Bill 699 and Assembly Bill 1076, which went into effect on the first of this year. The FTC estimates that by freeing employees from the clutches of noncompete clauses, more than 8,500 new startups will be created per year, as well as an average annual pay increase of $524. The FTC’s change is expected to have the biggest impact in the tech sector, which some people claim unfairly binds employees to what they call an “exploitative” practice in order to protect intellectual property. But despite some people’s fear that banning noncompetes will let businesses’ hard-earned trade secrets leak out to their competitors, some recent scholarship concludes that banning these agreements may not lead to an increase in trade litigation. So, noncompetes are DOA, business will be booming, and everyone’s trade secrets are safe. Right? Well, it’s not that simple. Who is exempt from the ban on noncompete agreements? Not every employee is free from the limitations of a noncompete agreement just yet. As one example, under the FTC’s new rule, existing noncompetes for senior executives, defined as those earning more than $151,164, can remain in effect. However, employers may be prevented from enforcing any new noncompetes, even for senior execs. While the FTC says this number represents less than .75% of the working population, this still opens the door to litigation for those who are uninformed. When does the noncompete ban take effect? Despite news headlines everywhere announcing the end of noncompete agreements, they are not truly over…just yet. The FTC’s final rule was not scheduled to take effect until 120 days after it was published in the Federal Register. That means the earliest possible date we could have seen the ban take effect would have been August 22, 2024. However, a court decision on August 20, 2024 (Ryan LLC v. Federal Trade Commission), ruled that the FTC’s noncompete rule is unlawful and ordered that the FTC’s noncompete rule shall not take effect against any company nationwide. Are there any alternatives to a noncompete agreement if the ban is upheld? If the ban on noncompetes is eventually upheld, there are still many other ways businesses can protect themselves from having their hard-earned trade secrets leaked to their competition or otherwise out of their hands or from other actions that could harm their competitive advantage. Trade secret laws, non-disclosure agreements (NDAs), other confidentiality agreements, and non-solicitation agreements are all ways to protect well-meaning employers. According to the FTC, research estimates that over 95% of workers who signed a noncompete agreement additionally signed an NDA. What will the noncompete ban mean for employers if enforced? The FTC’s final rule would require employers to provide clear notice to employees (“workers”) that their noncompete clause cannot and will not be legally enforced before the effective date. Long-term, the ban could encourage employers to distinguish themselves from competitors through comprehensive benefits packages and a positive, productive working environment. For workers, the ban is freeing. For employers, it will be imperative to adopt updated policies to continue protecting important confidential information and competitive advantage without violating the law. What should employers do next? Employers should stay apprised of any updates related to this FTC ruling. We expect this issue to be tied up in litigation for some time, but the situation can quickly change. Business owners who want to stay out of the courts will want to stay informed and be ready to pivot during any time of transition. The FTC believes their proposed rule is largely promising, freeing workers from restrictive clauses that pin them to an unhappy job and giving them, in the words of the FTC Chair Lina M. Khan, “the freedom to pursue a new job, start a new business, or bring a new idea to market.” By eliminating noncompetes, the FTC hopes to foster healthy competition that fosters innovation from new voices. However, as with any form of change, there can be confusion and unintended consequences. Employers and employees alike who have questions about how the latest FTC ruling affects them should always feel comfortable reaching out to an attorney who specializes in business and corporate law. Have questions about the status of the FTC’s final rule banning noncompete agreements nationwide? The team at MSB Law has been in your shoes. We’re business owners ourselves, and we know how challenging changing federal regulations can be, especially for business owners to understand and navigate. Contact us or give us a call at 913-839-2808. We would welcome the opportunity to serve as your trusted legal counsel for all your business law needs.

With the rise of entrepreneurship and the “gig economy”, more and more people in Kansas and Missouri are engaging in multiple business ventures. While this can be extremely profitable, it can also create a complicated web of legal obligations that need to be managed. One option is choosing to form a holding company.  There are numerous benefits and potential pitfalls of organizing your business interests with a holding company.  How a Holding Company Can Untangle Your Business Ventures A holding company, also sometimes known as a “parent company”, is a business entity that owns other business entities. It acts as a parent or umbrella organization for the subsidiary businesses it owns, allowing them to operate under its name if the parent company wishes. It can be used for consolidating different investments and businesses together in order to increase efficiency and organization, while also creating additional layers of liability protection for the members or shareholders of the parent company. The holding company does not actually take part in the daily operations of its subsidiaries; rather, it serves as an owner or manager of such entities.  To Merge or Not to Merge? When making the decision whether to bring all your different businesses under one umbrella, the key advantage of creating a holding company is that it can further protect you from liability exposure. Furthermore, it may provide valuable tax savings when business owners are able to take advantage of federal and state tax deductions. However, there are potential drawbacks to consider when deciding if a holding company is appropriate for your needs. Primarily, the complexity of the business structure may make it difficult to manage multiple interests without proper guidance from an experienced lawyer. Our Business Lawyers Can Help Creating a holding company can be an effective way for entrepreneurs in Kansas and Missouri to further protect themselves from risk and liability exposure, while also providing continuing between management of their various business interests. However, with this approach comes potential risk. Before making the decision, it’s important to weigh both the pros and cons thoroughly with help from an experienced business lawyer so that you can make an informed decision. Contact Morefield Speicher Bachman to discuss and determine whether a holding company is right for you!

Contracts can be oral or in writing. Good business practice is to always reduce your agreement to writing. Regardless whether oral or written, a contract is an agreement between two parties that binds them to carry out (or not carry out) certain or specific actions. The requirements of a contract are an offer, an acceptance of that offer, and some type of “consideration” such as payment in exchange for services provided. A written contract should be the manifestation of the parties’ meeting of minds over those basic elements. A written contract is easier to enforce than a verbal contract, especially when it is well written and clearly outlines the rights and responsibilities of the parties. Written contracts also help avoid future disputes that arise from confusion or disagreement about what may have been verbally agreed to. Strong, healthy, and mutually beneficial business relationships are often based on written contracts. In a contract, the expectations between the parties (the people or businesses signing the contract) are defined, and agreements are clarified, so all parties involved know what to expect from the other party, and what is expected of them. A solid contract that details your expectations and explains your rights and remedies is critical to protecting your interests. Contracts Should Be Specific, Not General Informal or short summary agreements may feel easier to maintain, or feel like an expression of trust and honor. However, without clearly detailing the agreed terms, an informal or short agreement may place you at unnecessary risk and threaten to destroy business relationships. Contracts that are first negotiated, then well-drafted in detail, can clear up discrepancies and prevent misunderstandings that lead to wasted time, money, and resources in the future. If a party is uninformed or unsure of what to expect in a business relationship, it can lead to controversy and lawsuits. It is imperative to make it very clear in the contract the expectations of the parties. Be careful not to use vague or open-ended terminology.  By being specific, many conflicts can be avoided. In order to be successful, all parties must be on the same page! Could Uniform Contracts Be a Good Fit for Your Organization? It can be a great idea to have a standardized form contract, if you provide the same goods and services to the same kind of clients on a regular basis.  When you need to develop a standard form contract that best meets your needs, it is always advisable to seek the help of a qualified business lawyer. Business law attorneys will help ensure the standardized contract is well written and includes all the protections you and your business need. Contract Termination Details: Why Are They Important? Before a contract is signed, it should be carefully read and renegotiated if any terms seem difficult to meet. Business law attorneys can assist clients with this process. If the terms do not satisfy all parties, the contract can be abandoned and the parties can walk away with no agreement.  Once the contract is signed, however, it can only be terminated in certain circumstances.  Defining in the agreement when a contract can be terminated can be a valuable tool to prevent future disputes. Terminating a contract refers to ending it before the parties have completely fulfilled all terms.  A termination may be allowed when permitted by certain laws or the terms of the contract.  These reasons sometimes include the following: impossibility of performance or execution, mutual agreement, or breach (violation) of certain terms of the contract.  Sometimes, this means a party may be released from finishing their obligations under the contract.  But sometimes, terminating a contract without good cause or legal justification can lead to an expensive lawsuit.  As a result, good legal advice should be sought when considering terminating a contract.  How Should You Go About Building a Contract? When drafting a contract, it is best to seek the legal assistance of an experienced attorney. Our business law attorneys at Morefield Speicher Bachman understand the laws governing contracts and best-practices procedures, which allows us to determine the language and terms that will best protect you and your business.  Businesses frequently encounter disputes and other issues over contracts. It doesn’t mean that your business can’t continue operations. Our business law attorneys at Morefield Speicher Bachman can help you resolve business disputes, and litigate claims when necessary.  As a business owner or leader, you can rely on us to help you successfully navigate every step of the dispute resolution process while you stay focused on operations. Call (913) 839-2808 today to speak with one of our business law and litigation attorneys.

Buying or selling a business is a complex venture that requires buyers and sellers to adhere to specific legal processes, and necessitates careful planning. Sales agreements are legal documents that outline the terms and conditions associated with the transaction and enable a meaningful evaluation of all company assets and liabilities. The type of sales agreement you use will depend on the reason for the sale, the timing of the sale, the performance of the business, and its structure. The following are some of the most commonly used sales agreements for buying and selling businesses.  Asset Purchase Agreement An asset purchase agreement (APA), also known as an asset sale agreement or business purchase agreement, is a written document that formalizes the sale of the significant business assets of a business.  It outlines the structure of the agreement, price, exclusions, and warranties.   There are many types of assets that can be purchased, including: Equipment Licenses Intellectual property Real estate properties In an asset purchase agreement, the buyer agrees to purchase certain assets from a company but the selling entity retains liabilities, and retains the ownership of the corporate entity selling the assets.  This often leads to the selling entity thereafter going through a “wind down” or “dissolution” to cease operations and close the business.  It can be advantageous for buyers and sellers to enter into an APA when they want flexibility in the transaction. Furthermore, an APA may be part of a more significant transaction, such as a merger or acquisition. Share Purchase Agreement A share purchase agreement transfers ownership of shares (also called stocks) in a company from a seller to a buyer. A share (or stock) is a unit of ownership in a corporation (xxx, Inc.) that is divided up among shareholders and includes an ownership interest in the profits and losses of the corporate entity. A share purchase agreement generally includes information about: Who is selling the shares Who is buying the shares Number of shares being sold and their value The type and class of the shares being sold  Company the shares are being transferred from Payment details, such as the amount of the down payment and the date of closing   A share purchase agreement can be used to sell shares from one shareholder to another shareholder in the same company, or to an outsider who wants to join the ownership of a company.  It is important to review the Shareholder Agreement or the Articles of Incorporation regarding and rules or restrictions on selling shares. Membership Sales Agreement Members of a limited liability company (LLC) can buy or sell their interest in the LLC (and thus their interest in the LLC’s assets and liabilities) using a membership sales agreement. Sale of interest in an LLC can happen between current co-members of the LLC, or to an outsider who wants to join the LLC.  Sometimes membership sales are required if a member is forcibly removed from the LLC.  An LLC membership purchase agreement can be used for any transaction involving the exchange of money for the surrender of LLC interests.  An LLC’s articles of organization, certificates of formation, or other founding documents describing ownership, organization, and voting rights may need to be amended if the LLC has been in operation for a while. A membership sales agreement specifies how much of the seller’s interest is being transferred, the purchase price, how and when money will be transferred, the closing date of the sale, and whether consent is required from other LLC members. Our Business Attorneys Can Help with the Sale or Purchase of a Business No matter how confident you are in the valuation and conditions of a sale, you should not attempt to buy or sell a business on your own.  Selling or buying assets or an interest in a business can have significant tax and estate planning ramifications.  When so much is at stake, it is always wise to enlist the help of legal professionals. An experienced business attorney can protect your best interests throughout the transaction.  At Morefield Speicher Bachman, LC, our business law attorneys pride themselves on helping businesses efficiently achieve their goals and resolve disputes. If you have questions or need guidance on buying or selling a business, call (913) 839 2808 today to speak with one of our business law and litigation attorneys.  

When you have been injured or when you are involved in a dispute about money, there can be a tendency to rush the decision to sue. It’s important to remember that the money you recover in a lawsuit comes at a cost, such as lawsuit filing fees, attorney’s fees, and the time and trouble it takes to go to court. Lawsuits are about more than money, though. They are about justice. That’s why it’s important to consider everything you might gain or lose by filing suit, including the opportunity to right a wrong. Below are a few things to consider before you file a lawsuit against a company or person. Suing on Principle The purpose of civil lawsuits is to allow you to obtain justice for a wrong you suffered. When someone violates important principles such as honesty, carefulness or fairness and causes you a personal or financial injury, a lawsuit is one way to balance the scales of justice.   You may be tempted to sue even if the goal of litigation is something other than money. If a person or company has wronged you, the “principle” of pursuing justice and righting this wrong may be your ultimate goal even if the lawsuit does not directly or immediately improve your financial condition. When your primary motivator is the principle, rather than the money, you need to evaluate with your attorney whether the cost of litigation is worth it to you. In some cases, a strategic lawsuit can be used to send a message that you or your company will not tolerate certain types of misconduct. If there is a risk that others will harm you in the same way in the future, a lawsuit may be a sensible way to protect you or your company. But, litigation is expensive. As the proverb says, “You should count the cost before you build the house.” Make sure that filing suit over principle is something you can afford and that the time, expense, and aggravation are worth what you hope to gain. Remember that there may be other ways you can address the problem. In many cases, your lawyer can negotiate a settlement with the other sides. While the wrong you suffered may be deeply upsetting and you feel as though a lawsuit is the answer, you should consider the burden of a lawsuit on your personal life. Lawsuits are expensive in terms of time and dollars. Lawsuits can be emotionally draining as well. You may find that a lawsuit interferes with the time you have for your work, business, family, and social life. There will be paperwork to complete, court hearings to attend, and orders provided by the judge to follow. And, there may be a loss of privacy as the other party investigates your claims. But, the justice you receive may well be worth the cost. We can help you consider the pros and cons of filing a lawsuit. Suing for Principal (“the money”) In a civil lawsuit, you can recover money damages. In some cases you can get a court order enjoining the other party from acting in certain ways. Lawsuits are a tremendous tool for resolving disputes, but they are expensive. Before filing a lawsuit, it is important to have a frank discussion with your attorney about whether a lawsuit is likely to improve your financial condition or cost you more than you recover. You also will want to evaluate whether the defendant has the ability to pay any judgment you obtain. Fortunately, many cases settle before trial – well over 90% settle in the United States. It is always important to balance cost and benefit and to consider the “principal” and the “principles” involved. This is one reason that we handle many lawsuits on a contingency fee basis. When you hire an attorney on a contingency fee, you only pay attorneys fees if your attorneys recover money for you. The attorneys charge a fee that is a percentage of the money they recover for you. Typically you will also be responsible for the case costs. Contingency fees can make it feasible for you to bring a lawsuit without risking your financial well-being. In Conclusion… Before rushing to file a lawsuit, it is important to consider all of the options for solving your legal problem. It may be possible to negotiate a mutually beneficial compromise directly with the other party. Another option is to hire a mediator. This neutral third party will help you and your opponent evaluate your goals and options in order to come up with a solution that works for everyone. You may also be able to submit your dispute to binding arbitration.  Our team at Morefield Speicher Bachman will ensure you understand the financial and personal cost of all of your options. Our goal is to help you solve your legal issues in the manner that best fits your needs and your situation.