THIS ISSUE'S HEADLINES

Corporate Transparency Act Suspended

Remote and Hybrid Working Models: Opportunities & Challenges For Closely Held Businesses

To Compete or Not to Compete?


CORPORATE TRANSPARENCY ACT SUSPENDED

On March 2, 2025, the U.S. Treasury Department announced that it will not enforce any penalties or fines associated with the Beneficial Ownership Information (“BOI”) reporting requirements under the Corporate Transparency Act (“CTA”). The Treasury Department has announced that it will propose revisions to the CTA narrowing the scope of the rule to require BOI filings only by foreign reporting companies.

Notably, the Financial Crimes Enforcement Network (“FinCen”) website has not yet been updated to reflect the announced change in policy.

PLDO has been covering the CTA since it was first passed by Congress and has published multiple Advisories to guide businesses. Attorney Alisa F. Hoover, Senior Counsel and member of the firm’s Corporate & Business Law team, provides the latest update and answers key questions below:

Background

The CTA was enacted on January 1, 2021, as part of the 2021 National Defense Authorization Act to assist in combating money laundering, tax evasion, the financing of terrorism, and other illegal activity. The purpose was to 1) establish reporting requirements for a wide range of business entities to disclose their “ultimate, natural-person beneficial owners,” 2) authorize FinCEN to maintain a database of all information provided, and 3) disclose such information to government authorities and certain financial institutions.

Since its enactment, the CTA has been the subject of immense litigation challenging its constitutionality, resulting in the issuance of nationwide injunctions, stays of those injunctions by the U.S. Supreme Court, the lifting of injunctions and yet more litigation in new venues seeking to declare the CTA unconstitutional.

Who Has Access to the Information a Business Reports?

While public access to FinCEN’s database is NOT permitted, certain authorities may have access to the information a business reports, including:

• Federal agencies engaged in national security, intelligence or law enforcement;
• With prior court approval, state and local law enforcement agencies;
• Financial institutions for certain specified purposes and the federal regulators which supervise those institutions;
• Certain foreign agencies that meet all of the stated criteria; and
• US Treasury employees whose official duties require such access.

Summary

PLDO will continue to monitor the CTA and provide updates as they become available. If you have questions or would like further information about the CTA, please contact Attorney Alisa Hoover at 401-824-5137 or email ahoover@pldolaw.com.

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REMOTE AND HYBRID WORKING MODELS: OPPORTUNITIES & CHALLENGES FOR CLOSELY HELD BUSINESSES

When the pandemic hit, it forced a massive experiment for companies to implement remote work policies for “non-essential” jobs. Since that time, remote and hybrid work models have gained widespread acceptance with businesses leaning on technology to accommodate employees’ increased desires for job flexibility. In fact, according to a January 2025 study by the Bureau of Labor Statistics, one-fifth of the U.S. workforce still work at least partially remote.

While some companies are pushing for full in-office returns, many are still embracing hybrid work models. For closely held businesses, these models present opportunities to reduce overhead costs, attract talent from a broader geographic area, and enhance employee satisfaction. However, they also introduce challenges related to communication, company culture, and operational efficiency.

PLDO Principal Gary R. Pannone addresses the pros and cons in his latest Advisory and offers practical ways that closely held businesses can overcome the challenges. Learn more by clicking here.

If you have questions or would like more information, contact Attorney Pannone at 401-824-5100 or email gpannone@pldolaw.com.

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TO COMPETE OR NOT TO COMPETE?

Scrutiny of new and existing noncompetition and nonsolicitation provisions affecting employees and independent contractors has magnified since February 26, 2025. That Wednesday, the Federal Trade Commission (FTC) issued a directive to form a Task Force to examine “deceptive, unfair and anticompetitive” practices, specifically calling out noncompetition and nonsolicitation agreements as targets.

On the one hand, efforts at the state level to encourage a robust labor market are nothing new. Four states have laws banning noncompetes entirely; while thirty-three states have current statutes or pending legislation limiting the scope of noncompetes. In those thirty-three states, the statutory restrictions on noncompetes include income guidelines, limited durations or a prohibition on noncompetes within specific industries (often health care professionals). Many make exceptions to allow noncompetes in connection with an acquisition. Even where noncompetes are allowed, courts have often refused to enforce them or interpreted them narrowly, examining the length and geographic reach of the noncompete, as well as whether the aggrieved employee formerly held an executive position.

For example, in Rhode Island, Governor McKee vetoed a broadly worded bill that would have banned noncompetes and limited nonsolicitation provisions, including reach into already existing contracts. This June 2024 bill would have amended an existing RI law limiting the enforceability of noncompetes against certain classes of workers, including nonexempt employees and low-wage employees. In February 2025, a narrower version of the vetoed bill was introduced in the RI General Assembly. The 2025 bill excepts nonsolicitation provisions and noncompetition provisions granted in connection with an acquisition. The revised bill is winding its way through the legislature.

On the other hand, the landscape of Federal agency rulemaking concerning noncompetition and nonsolicitation agreements is evolving quickly. During 2023 and 2024, two Federal agencies, the FTC and the National Labor Relations Board (NLRB), took steps to ban noncompetition agreements for most employees, calling these provisions unfair methods of competition and violative of existing law. Among other things, the proposed FTC rule would have required employers to inform every affected employee that their noncompetition provisions were no longer enforceable. After legal challenges to the FTC rule, a Federal court set aside the proposed rule and prohibited the FTC from enforcing it.

During 2023, the former general counsel of the NLRB issued a memo claiming all noncompete provisions violate the National Labor Relations Act. In February 2025, the new general counsel of the NLRB rescinded that memo.

Any new rulemaking by Federal agencies on noncompetition and nonsolicitation agreements will supersede all contrary state laws. The announcement of the new FTC Task Force signals that the FTC will likely continue to scrutinize restrictive covenants in contracts, such as noncompetes and nonsolicits, and launch enforcement actions.

As always, we will keep you apprised of any developments. In the meantime, if you have any questions, please contact Attorney Alisa F. Hoover of our Corporate & Business Law Team at 401-824-5137 or ahoover@pldolaw.com.

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