Operating a successful and profitable business requires not just a solid business plan but also ongoing research. Businesses have to track the marketplace to ensure they offer goods and services that consumers want. Companies need to track trends to ensure that they can continue competing effectively in their niche.
Beyond that, organizations also need to ensure continual compliance with all applicable state and federal statutes. Regulations change frequently, but not all new rules hold up under scrutiny in the federal court system.
Several major proposed legal changes in the last few years could have had significant implications for successful businesses. However, the federal courts ruled against a number of these new business regulations. All three of the proposed new rules below have recently been blocked or at least delayed by federal court review.
The non-compete ban
The Federal Trade Commission (FTC) proposed a federal ban on non-compete agreements in employment contracts. The idea was to foster entrepreneurship and allow more mobility for skilled and educated workers. After the announcement of the new final rule, federal court judges have ruled that the FTC overstepped its regulatory authority by implementing such a sweeping fan. After several court cases, the non-compete ban effectively became unenforceable.
Enhanced overtime protections
Federal rules establish the right to overtime. Regulatory officials also establish the exemption threshold for salaried professionals. In 2024, there was an attempt to increase the minimum salary necessary to exempt workers from overtime pay. Federal courts have ruled against those exemption increases. Currently, the 2019 salary rules remain in effect.
The Corporate Transparency Act
Congress attempted to limit money laundering and improve overall economic transparency by passing the Corporate Transparency Act. The CTA created an obligation to report beneficial ownership information for businesses such as limited liability companies (LLCs) that have opaque business structures. Lawsuits about these new disclosure requirements have resulted in the courts exempting members of the National Small Business Association and delaying the CTA from taking effect. The Treasury Department has since announced a suspension of enforcement against domestic companies and citizens.
Tracking not just the establishment of new rules and the passage of new laws but also court cases related to key business statutes is important for regulatory compliance. Those who are aware of new rules and when they take effect can help ensure that their businesses remain compliant.