On the evening of May 20th, the Elon Small Business & Entrepreneurship Clinic attended LaunchLab Growth Spring Demo Day at Elm & Bain (https://elmandbain.com/) in downtown Greensboro. This event was an ideal opportunity for aspiring entrepreneurs to “pitch” their company to a panel of judges with the chance of winning $500 to put towards growing their business. Among the 11 entrepreneurs giving their pitch, there were companies centered around video gaming, guidance counseling, children’s clothing, and even dog training.

LaunchLab Growth Spring Demo is an event held by the Greensboro Chamber of Commerce (https://greensboro.org/) that is free to attend and open to the public. Each small business owner and start-up has been preparing for this event every Monday for 14 weeks. Although there are no current openings for new companies looking to pitch their entrepreneurial ideas, event organizer, Kaitlin Conover is available to connect with anyone looking for more information on the event.

Demo Day began at 5pm where attendees and presenters were invited to register and receive a name tag at the front desk. After registering, attendees and presenters mingled in the event hall while enjoying tasty refreshments and drinks at the open bar. Each small business owner and start-up had set up tables to share their products and services to attendants.

Soon afterwards, attendants gathered in the Elm & Bain event hall to hear each entrepreneur’s pitch. All 11 entrepreneurs were given a strict four minutes to present their company to the audience. Although nerve-wracking, their ability to present to fellow entrepreneurs in the Triad region proved to be invaluable and an excellent opportunity to network with like-minded people.

This season’s winner of the $500 prize was ……. Astrid & Friends!

Astrid & Friends (https://astridandfriends.com/) is a company that ethically produces handmade children’s clothing that “breaks the mold”. Inara, the owner of Astrid & Friends delivered an excellent presentation that showcased her passion for this type of work. This passion and her message resonated with the judges and she walked away with $500 to use however she likes towards her small business.

After the presentations were complete, the networking began. All presenting entrepreneurs welcomed attendants to approach their tables and learn more about their respective companies. Caroline Decarvalho, an Elon Law Small Business Resident, purchased a product from “Molten Makerspace”  https://moltenmakerspace.com/ which provides diverse classes and uses its “maker equipment” to transform hobbies into careers. Dara Alper, owner of Molten Makerspace, assisted Ms. Decarvalho in purchasing a handmade “axolotl” figurine which is a salamander-like creature native of Mexico. Below is Ms. Decarvalho with a picture of her new friend, “Clio”.

Moving forward, entrepreneurs, both established and aspiring, should monitor registration availability for future LaunchLab Growth Spring Demo Day. It is an excellent opportunity, even for those not presenting. One of our favorites was Rolling Video Games NC (https://www.rollingvg.com/). Imagine video games but on wheels.

Check out this link for more information on the LaunchLab Growth Demo Day and to see the other small businesses:

https://chamber.greensboro.org/events/Details/launchlab-growth-spring-demo-day-1094139?sourceTypeId=Hub#:~:text=Description,things%20in%20the%20Triad%20region

For help with your small business’s legal needs, contact the clinic at businessclinic@elon.edu.

The race is on for interested buyers to potentially acquire TikTok, currently owned by Beijing-based ByteDance. Billionaire and former owner of the Los Angeles Dodgers is planning a consortium to buy TikTok’s U.S. operations with the investment bank Guggenheim Securities.

This comes following the news from last month that President Biden signed legislation requiring the sale or ban of the social media app due to national security and data privacy concerns. The Chinese-controlled social media app will have up to one year to sell the app, then TikTok will be banned in the U.S. The greatest concern for legislators is the potential for China to collect intelligence on U.S. users or spread misinformation regarding sensitive topics such as the Israel-Hamas conflict.

The pushback is intense since TikTok filed a federal lawsuit challenging the constitutionality of the law. However, with some big names like former Treasurer Secretary Steven Mnuchin and “Shark Tank’s” Kevin O’Leary eager to enter the bidding war, TikTok might soon be an American-based entity.

If ByteDance fails to secure a buyer, the bill states that it will be “unlawful for an entity to distribute, maintain, or update” the app. In practical terms, this means you won’t be able to download or update TikTok from app stores like the Apple App Store for iPhones and the Google Play Store for Android phones.

If the ban takes effect, which likely wouldn’t happen before 2025, you could keep TikTok on your phone. However, without regular updates, the app would become outdated, exposing you and your data to bugs, leaks, and other security risks, and eventually, the app would stop working.

Alp Toker, director of NetBlocks, a firm that tracks internet connectivity and censorship, suggests that TikTok would likely comply with the ban and disable access to its service in the U.S. If TikTok did not comply, individual internet service providers (ISPs), including cellular carriers and home broadband companies, might have to decide whether to filter and restrict TikTok’s domains. This could be the most challenging part of the ban, potentially sparking a debate about free speech, a point TikTok has raised in its defense.

“It doesn’t look good when the U.S. presents itself as an opponent to internet filtering globally,” Toker adds.

A national ban would be easier to enforce than the localized bans seen in places like Montana and among government employees. Federal and state employees have bypassed these bans by using TikTok on personal devices. Additionally, Montana’s TikTok ban has been halted, as a federal judge ruled in November that it “likely violates the First Amendment.”

In the meantime, continue using TikTok as usual and make sure to keep the app updated. If a ban does occur, you’ll have the latest version on your phone, though this is not a permanent solution.

It’s also a good idea to download your data from the Account section in Settings. This will include your username, profile photo, video and comment history, and any shopping activity. Keep in mind that TikTok says it takes a few days to process the request to download your data.

Even if TikTok vanished tomorrow, short-form video content would still thrive. In September, YouTube reported that YouTube Shorts, the vertical-video section of its app, receives over 70 billion daily views. Additionally, Meta’s TikTok competitor, Reels, is reshared 3.5 billion times daily, according to CEO Mark Zuckerberg in February.

 

 

With Summer approaching, many Small Businesses are on the hunt for seasonal employees. Despite the numerous benefits seasonal employees provide employers, it’s important for Small Businesses to be aware of the potential risks associated with seasonal employment and healthcare coverage compliance. Understanding the requirements and demonstrating compliance is paramount for Small Businesses as they transition into Summer and the rest of the calendar year.

Per the Patient Protection and Affordable Care Act (the “ACA”), “applicable large employers” (“ALE”) must provide group health plan coverage to their employees. ALE have at least fifty (50) full-time or full-time equivalent employees in the preceding year.

To comply with the ACA, ALE’s must report their coverage offers to the IRS. ALE’s expose themselves to significant penalties if (i) they fail to offer the minimum essential coverage to at least 95% of employees and their dependents; or (ii) they offer coverage that is neither “affordable” nor provides a “minimum value.”

How does this apply to Small Businesses? While many Small Businesses don’t employ at least 50 full-time employees, seasonal employees are crucial to the growth and sustainability of these organizations, particularly during the Summer. As these seasonal employees matriculate into the summer workforce, it’s important for Small Businesses to take note of their employment hours in consideration of compliance with ACA requirements. If employees work either thirty (30) hours in a week, or one-hundred and twenty (120) hours for the month, they are considered full-time employees under the ACA.

What will it cost me if I choose to bite the bullet? Before electing for noncompliance, take note of the IRS’ increased penalties. Failure to ­file or furnish accurate statements is $310 per return. Intentional disregard when furnishing accurate statements or neglecting to file will be assessed a $630 fee per return.

Larger penalties include a 4980H(a) or 4980H(b), and if both are applied in the same tax year, then the larger of the two will be accessed. The penalties have increased for both in the 2024 tax year.

Employers who become entangled with a 4980H(a) penalty will be assessed, amounting to $2,970 per year for every full-time employee, whereas a 4980H(b) penalty will only put employers in the hole $4,460 per employee violation per year. Remember, the IRS cannot assess ACA penalties unless an organization has at least one employee who obtained a Premium Tax Credit from a state or federal health exchange.

How to prevent this? The Seasonal Worker Exclusion. Have no fear, if your Small Businesses is considered an ALE, due to increased seasonal employment, the Seasonal Worker Exclusion provides a legal work-around while ensuring ACA compliance. If the total number of full-time employees is (i) greater than or equal to fifty (50) for 120 days or less, or 4 months or less, and (ii) ALL employees in excess of 50 were seasonal workers, then the Employer is not an ALE. Under the ACA, “seasonal worker” is defined by a reasonable, good-faith interpretation by the employer.

Summer employment of seasonal workers for Small Businesses is the lifeline for sustained growth throughout a busier time of the year. On the other hand, Summer employment has the potential to pose a financial risk to Small Business owners. Therefore, Small Business compliance with the ACA is crucial to ensure cool and comfortable Summers for employers.

For more information: https://www.americanbar.org/groups/business_law/resources/business-law-today/2024-april/primer-affordable-care-act-compliance-growing-businesses/

And for more regarding penalties, see https://acatimes.com/affordable-care-act-penalties-increase-in-again-in-2024/.

For assistance with your small business’s legal needs, please contact the clinic at businessclinic@elon.edu.

The recent FTC ruling banning non-compete clauses could significantly impact North Carolina businesses. Employers have used non-compete clauses to prevent employees from working for competitors or starting similar businesses after leaving their current employment.  However, the FTC has determined that these clauses can harm competition in labor markets by suppressing earnings and opportunities for workers.

This new FTC rule eliminates nearly all non-competes, either direct or indirect, throughout the entire nation. The only major exceptions exist for the sale of a business, and a carve-out for “Senior executives” that make at least $151,164 and have policy-making roles—the President, CEOs, etc. with authority over business aspects. The FTC rule does change the way NC courts have interpreted non-competes.

Previously, NC courts have not enforced overly broad territories or noncompete containing “indirectly competing” clauses.  In the 2023 case of Prometheus Group Enterprises, LLC v. Gibson, the North Carolina Business Court warned against the use of the phrase “directly or indirectly” in defining the scope of a non-compete and refused to enforce non-compete provisions that prevent a former employee from indirectly working for a competitor.  Prometheus Grp. Enters., LLC v. Gibson, 2023 NCBC 23.  This is in line with the North Carolina court’s general tendency to be cautious in enforcing non-compete agreements, particularly those with broad restrictions in both time and geography.

According to the government, the FTC’s new non-compete rule could potentially increase workers’ total earnings by close to $300 billion per year by increasing job mobility and competition among employers for workers. This could lead to higher pay, better benefits, and more favorable conditions for workers. However, it could also lead to increased competition among businesses, as employees would be free to switch jobs or start their own businesses without the restrictions of non-compete clauses.

In terms of enforcement, North Carolina courts have regarded FTC rules as guidance unless the rules have been expressly and timely adopted by reference in applicable state statutes.  Some states have already moved to ban companies from entering into non-competes with their employees (California, New York).  Therefore, the impact of the FTC’s new rule on North Carolina businesses may depend on how the state chooses to incorporate this rule into its laws.

In conclusion, the FTC’s ban on non-compete clauses could have significant implications for North Carolina businesses, potentially leading to increased competition and changes in employment practices.  Moving forward, employers should review their employment agreements with both current and former employees to assess whether non-compete clauses are included, and whether notice to those employees is required.  Against the backdrop of the FTC’s new rule, the overall national trend against non-compete agreements, and their interpretation in NC Business Court, non-competes are presently almost mostly dead.

For folks that prefer lists, the takeaways are:

Nonprofits are exempt from the rule which is based on Section 5 of the FTC Act. However, the FTC may scrutinize nonprofits to ensure they truly operate as such, beyond just having tax-exempt status.

The rule prohibits all non-compete agreements for all workers, effective immediately, except for existing agreements with “Senior Executives.”

a)      Existing non-competes with anyone not “Senior Executives” will be voided by the rule, and

b)      Essentially, everyone else with existing non-competes must be notified by the effective date that enforcement is invalid.

“Effective date” of the rule will take effect approximately 120 days after publication in the Federal Register, expected around late August 2024.

“Senior Executive” refers to someone in a policy-making role earning at least $151,164 annually.

a)      Current non-competes for Senior Executives remain valid; new ones must be established before the rule takes effect.

b)      “Policy-making position” includes Presidents, CEOs, or equivalents, with authority over significant business aspects.

“Business sales exception exists for non-competes associated with business sales.  If you sell or buy a business, the selling party can be bound by a non-compete.
Detailed information about the rule and FAQs can be found on the FTC website at Noncompete Rule | Federal Trade Commission (ftc.gov). The rule text starts on page 561 of a 570-page document.

For help with your small business’s legal needs, contact the clinic at businessclinic@elon.edu.

In an effort to stop financial crimes, money laundering, and other illegal activities, the Corporate Transparency Act (CTA) has been established to oversee commercial activities that can impact interstate commerce. These activities often take place under the cover of “shell companies” that are used by individuals that can help conceal their ownership of business activities.

On March 2024, in National Small Business United v. Yellen, the Federal District Court for the Northern District of Alabama held that the CTA was unconstitutional. The prevailing argument asserted that Congress exceeded its enumerated powers upon its approval of the CTA. The court held that in case of the litigants, the Commerce Clause does not also extend to the substantive regulation of business entities and their engagement in commerce. However, FinCEN will continue to implement the CTA those not involved in the lawsuit.

More recently, the Department of Justice appealed this ruling, and has filed a brief. The government asserts that the collection of ownership information is necessary to protect foreign and interstate commerce. Additionally, there are claims that the CTA will improve national security, intelligence, and law enforcement efforts to counter financial crimes, money laundering, and other illegal activities.

Ultimately, the courts will have to evaluate the validity of these arguments as they relate to the United States Constitution, relevant authority of Congress, and the balance between regulatory goals and the freedom of individuals in our country. In the meantime, businessowners must remain in compliance with the CTA in order to avoid fines and imprisonment.

For more information on CTA compliance, refer to the FinCEN website:

https://www.fincen.gov/boi

For assistance with your small business’s legal needs, contact the clinic at businessclinic@elon.edu.

 

Hello World! My name is Kirsten Tildon and I am a current 2L at Elon University School of Law. I attended Towson University and majored in English and minored in Business Communications and Liberal Arts. After graduating from Towson and worked on DC’s Campaign to Reduce Lead Exposure and Childhood Asthma before moving to Greensboro to pursue a career in law.

During my time at Elon Law, I have had the privilege of serving as the Business and Online Editor of We the People (Elon’s Constitutional law journal), Executive Vice President of the Federalist Society, Vice President and Co-Founder of The Board, and being a member of the Black Law Students Association, Phi Alpha Delta, Business Law Association, People Not Property, and Guilford County’s Teen Court program. I am also a Research Assistant for Professor Clodomir.

My passion for justice and commitment to effecting change in the law motivated me to go to law school. I am aspiring to be a government attorney to serve the public and gain litigation experience. This upcoming summer, I am excited to announce that I will be interning at the NC Supreme Court with Justice Berger.

I am thrilled to be a part of the Small Business and Entrepreneurship Clinic as a student attorney and look forward to assisting local businesses in entity formation and intellectual property issues.

 

My name is Chuom Prak and I am a 2L at Elon University School of Law. I grew up in Greensboro. For undergrad, I attended UNCG and majored in International Relations with concentrations in Intergovernmental Affairs and International Development.

After COVID, I concluded that the sky could indeed start randomly falling and that perhaps I should pursue what interests me. I am interested in the intersection of the law with innovation, economic development, and American hegemony. So, predictably, I started law school very interested in becoming a business, corporate lawyer doing IP, mergers & acquisitions, finance and shepherding companies towards IPOs. During law school, I have also developed interests in regulatory enforcement and prosecuting White Collar crimes.

At Elon Law, I have had the privilege of participating in various student organizations. I serve as the President of Elon Law’s Federalist Society and the President and Co-founder of The Board. I have participated in the NC Legal Design Derby and volunteered with the Guilford County’s Teen Court. I am part of the Military Law Society, Black Law Students Association, Phi Alpha Delta, and the Business Law Association.

This summer, I look forward to interning at the Supreme Court of North Carolina with Justice Berger.

I am excited to be a part of the Small Business and Entrepreneurship Clinic as a student attorney and look forward to assisting local entrepreneurs with entity formation and intellectual property concerns.

For help with your small business’s legal needs, contact Kirsten and Chuom at businessclinic@elon.edu.

 

Hello, my name is Lance Sigmon, and I am a current 2L at Elon University School of Law. I attended North Carolina State University for undergrad and majored in Communications Media and minored in Business Administration. After graduating from NC State and working for the North Carolina Secretary of State for 6 months, I moved to Greensboro to pursue a career in law.

During my time at Elon Law, I have had the privilege of participating in the Board, Business Law Association, and 1st Gen Society. These organizations have helped me develop relationships with different people from all types of backgrounds, experiences, and perspectives.

I am actively pursuing a career in law because I have seen the system be effective. Growing up, I had several friends who were displaced from unfortunate familial situations. Although I was young when this happened, I witnessed the positive aspects of the judicial system and how arguing on behalf of the victimized can bring about beneficial change. Based on these experiences, I am interested in practicing Family Law post-graduation.

I have had the opportunity to intern for both a real estate firm in Waynesville, NC, and a family law firm in my hometown, Hickory, NC. During my time at each respective firm, I developed a deeper appreciation for the law profession. The attorneys that I worked for were cordial, willing to help, and professional towards everyone who walked through the office doors. This set a positive example for how I would like to operate my future firm and the way I conduct myself moving forward in practicing law.

Despite my interests in the family law practice, I am incredibly excited to be a part of the Small Business and Entrepreneurship Clinic as a student attorney and look forward to assisting local businesses in entity formation and establishment, and intellectual property applications.

 

 

Hello! My name is Caroline Decarvalho and I am a current 2L at Elon University School of Law. I was born and raised in Connecticut and relocated to Wilmington, NC with my family in 2019. I attended UConn for undergrad and completed my major in Political Science with a concentration in Comparative Politics and Political Theory. Prior to beginning law school, I worked for a business and property law firm in Wilmington, then moved to Greensboro to pursue a career in law.

Currently at Elon Law, I serve as the Student Bar Association Treasurer, an Admissions Ambassador, and an Academic Fellow. I am involved in the Business Law Association, Intellectual Property Society, Women’s Law Association, and the law fraternity Phi Alpha Delta.

I chose to pursue law because I think it is a privilege to be an advocate for others and navigate the bureaucratic hurdles to protect a person’s rights and achieve their dreams. I very much enjoyed working on property-related matters like eminent domain and specific performance disputes. I hope to expand into intellectual property rights and corporate or in-house practice.

This past winter term, I completed an independent study on legal ethics and the use of artificial intelligence in the justice system. AI and other technologies are already being used for editing and generating ideas. There is much potential for judges and clerks to use Al to discover arguments or analyses that were possibly missed or not explored in prior cases. I’m excited to further my understanding of AI and its contribution to the legal system.

I’m thrilled to join the Small Business and Entrepreneurship Clinic as a student attorney and am eager to help local businesses with their entity formation, establishment, and intellectual property needs!

For help with your small business’s legal needs, contact Lance and Caroline at businessclinic@elon.edu.

Hello, my name is Collin Donaghy. I am a current 2L at Elon University School of Law. I attended Virginia Tech for undergrad and received a degree in Professional and Technical Writing. After graduating from Virginia Tech and working for Siewers Lumber and Millwork for a year, I moved to Greensboro to pursue a career in law.

During my time at Elon Law, I have had the privilege of participating in the Business Law Association, which provided me with the opportunity to hear from and speak with entrepreneurs and attorneys actively engaged in the practice area.

I chose to pursue a career in law because of the opportunity it provided for me to be an involved community member, as well as an avenue to assist members of my community in seeking justice for themselves, loved ones, and their passions. Elon has given me the opportunity to be engaged in my community, while focusing on real-world application of classroom skills. After graduation, I hope to attain a career working in Intellectual Property law, specifically assisting small businesses and entrepreneurs to protect the original works and ideas.

During my 1L summer, I returned to Richmond and interned at Sinnott, Nuckols & Logan, PC, focusing primarily on insurance defense work and personal injury claims. This upcoming summer, I am returning to the same firm with a more involved role in handling claims, communicating with clients, and being involved in litigation.

I am excited to be a part of the Small Business and Entrepreneurship Clinic as a student attorney and look forward to assisting local businesses in entity formation and establishment, and intellectual property applications.

 

 

Hello everyone! My name is Ayo Onasanya, and I am a current 2L student at Elon University School of Law. Prior to starting here at Elon Law, I attended Elon University for undergrad, obtaining degrees in Public Health and Music.

During my time here at Elon Law, I have had the opportunity to serve as a 1L SBA representative, Vice President of the First-Gen organization, and am currently a member of the Black Law Students Association and Business Law Association. I am also a member of the Leadership Fellows program. I am concurrently completing my Master’s of Business Administration through the Martha and Spencer Love School of Business at Elon University and anticipate graduating in Spring 2025.

During my 1L summer, I was an intern at Southeast Toyota Distributors. I had the opportunity to study revised State law pertaining to automotive dealership and distributorship operations, review various business contracts, and explore risk management strategies. During my 2L Winter trimester, I had the opportunity to work at the Law Office of Tony Huynh, addressing traffic violations, DUI’s, and other Criminal matters. This upcoming summer, I will be working as an intern for Porsche North America, examining employment and compliance matters.

I am excited to be a part of the Small Business and Entrepreneurship Clinic as a student attorney and look forward to assisting local businesses in entity formation and establishment, and intellectual property applications.

For help with your small business’s legal needs, contact the clinic at businessclinic@elon.edu.

Since January 1, 2024, entities and lawyers across the Unites States have been working on complying with the Corporate Transparency Act (the “CTA”). The CTA requires entities to file information on their “beneficial owners” with the Financial Crimes Enforcement Network. The main goal of the CTA is to prevent money laundering.

Last week, the Federal District Court for the Northern District of Alabama held that the CTA is unconstitutional when deciding the case National Small Business United v. Yellen (Case No. 5:22-cv-1448-LCB, ND-AL).

The winning argument was that Congress exceeded its enumerated powers when it approved the CTA. The Commerce Clause of the Constitution grants Congress the power to regulate commerce among the states. The court found that this power does not extend to the substantive regulation of the business entities utilized to engage in commerce. It is likely the Department of Justice will appeal the decision.

Though the plaintiffs of the case, National Small Business Association and Isaac Winkles will not be required to comply with the CTA as the litigation continues, other entities who must comply with the CTA are still required to do so.

As the litigation continues, lawyers and entities working on complying with the CTA should watch closely. If the litigation works its way all the way to the Supreme Court, the CTA might just find itself overturned.

For help with your small business’s legal needs, contact the clinic at businessclinic@elon.edu.

 

According to the United States Patent & Trademark Office (“USPTO”), Louisiana State University (“LSU”) women’s basketball star, Angel Reese (“Reese”), is not a Bayou Barbie, after they denied her Trademark application.

After LSU won the women’s basketball national championship, Reese skyrocketed to fame. Her nickname became the “Bayou Barbie” because of LSU’s close proximity to the water and her girly sense of style. LSU Women’s Basketball has even posted to their social media, posters of Reese which say, “Bayou Barbie. This Barbie is a National Champion.” Reese who has over 2.5 million followers on Instagram and a name and image net worth of 1.7 million dollars. Reese also has a multi-year NIL  deal with Reebok and had 17 NIL deals for the 2022-2023 season.

Reese filed a trademark application with the USPTO in February 2023 to register “Bayou Barbie,” but was denied in November 2023 because of the confusion with Mattel’s trademarks for Barbie dolls. Reese had 90-days to file an appeal but her attorney Daniel Heitner (“Heitner”) advised her not to, as “it was in Angel’s best interest to not unnecessarily instigate Mattel.” Heitner further explained Reese “has pivoted away from selling Bayou Barbie merchandise.” Since Reese did not appeal the USPTO’s decision, she abandoned it.

When evaluating whether a trademark application will be approved, the USPTO looks to whether there are marks similar enough that will cause confusion to the public. In Reese’s case, they found that her mark “Bayou Barbie” and Mattel’s “Barbie” would cause that type of confusion.

It is important that when filing applications with the USPTO you are guided by informed attorneys. For all your trademark needs contact the SBEC at businesscliinic@elon.edu.

Links

·         https://www.usatoday.com/story/sports/ncaaw/2024/02/21/angel-reese-bayou-barbie-trademark-bid-denied-lsu/72687031007/

·         https://twitter.com/LSUwbkb/status/1643324650053844998

·         https://www.si.com/college/2024/02/21/lsu-angel-reese-denied-copyright-bayou-barbie-nickname

·         https://deathvalleyvoice.com/posts/lsu-women-s-basketball-why-angel-reese-was-denied-use-of-bayou-barbie-nickname-01hq77x8tyqn

·         Photos from Angel Reese’s Instagram and CNN