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Mintz On Air: Practical Policies — The Risks of AI Prompt Injections in the Workplace
AI prompt injections are an emerging workplace risk that can manipulate AI-driven hiring and decision-making systems using hidden instructions embedded in otherwise ordinary documents. In this Mintz On Air podcast, employment attorneys Jen Rubin and Kevin Kim discuss how candidates can game AI tools through prompt and data injections, the security and confidentiality risks posed by unauthorized AI use, and practical steps employers can take, including human oversight, employee training, vendor diligence, and stronger AI governance.
Mintz On Air: Practical Policies — Taking Your Candidates to the Vet
As candidate screening becomes more complex with the rise of AI-generated applications, deepfakes, and evolving background check regulations, employers must balance effective vetting with legal compliance. This article discusses common screening pitfalls, key requirements under federal, state, and local laws, and practical strategies for designing background check processes that mitigate hiring risks while ensuring fair and individualized candidate assessments.
Two New Non-Compete Laws Take Effect in Virginia and Tennessee
As states continue to expand restrictions on non-compete agreements, employers face an increasingly complex patchwork of compliance requirements. This article highlights new laws in Virginia and Tennessee that limit the enforceability of certain non-competes, introduce new employer obligations, and reflect a broader national trend toward tighter regulation of restrictive covenants. Employers, particularly those with multi-state workforces, should review existing agreements and policies to ensure compliance with evolving state laws.
Mintz On Air: Practical Policies — Real vs. Robot: Bots in the Boardroom
As artificial intelligence becomes more integrated into corporate decision-making, boards must balance the benefits of AI with their fiduciary obligations to shareholders. While AI can enhance efficiency, research, and strategic analysis, it cannot replace the human judgment, accountability, and oversight required of board members. This article explores the legal, governance, and confidentiality risks associated with AI in the boardroom and highlights practical considerations for developing policies that support responsible AI use.
Stock Vesting in Startup Companies
Why “Vesting?”
Building a company from the ground up is a risky (but hopefully rewarding) endeavor for founders. In exchange for the founders’ efforts and devotion to the success of the company, the founders take a significant equity stake in the company, with the expectation that the value of these shares will grow substantially as the company grows. However, where there are multiple founders involved, each founder will want to ensure that their co-founder(s) are incentivized to stay with the business and work hard to make it successful, rather than holding on to a large equity stake and relying on the other founders to put in the lion’s share of the work needed to grow the business. To address this concern, the initial grant of shares to each founder is often made subject to “vesting,” which links a founder’s right to keep such shares (or some portion thereof) to their continued service with the company.
Checklist for Foreign Companies Expanding into the US
You’re a foreign company looking to set up shop in the United States. You have weighed the pros and cons of expanding your business into the United States, confirmed the compatibility of any products or services you offer with the US market, and have a team ready to expand your business in the United States. All you need now is to make sure you have checked all the legal and regulatory boxes. We’ll walk you through those boxes, like choosing a business structure, navigating laws and regulations concerning immigration, employment, and taxes, securing funding and real estate, and more. With smart planning and preparation, your company can thrive on this side of the pond.
After Months of Uncertainty, a Federal Court Has Blocked the FTC’s Non-Compete Rule on a Nationwide Basis
Barring any intervening appellate activity, the FTC’s rule will no longer go into effect on September 4, 2024 (the original effective date), employers will not be required to void employees’ existing non-competes covered by the rule, and employers are no longer required to send employees notices regarding the status of any non-competes.
USCIS Announces Adjustments to Thresholds in International Entrepreneur Parole Rule
US Citizenship and Immigration Services (USCIS) published a final rule adjusting the investment and revenue thresholds for International Entrepreneur Parole program (IEP) eligibility, effective October 1, 2024.
In Split Vote, FTC Approves Controversial Final Rule Banning Most Post-Employment Non-Competes; Rule Already Subject to Challenge in Court
On April 23, 2024, by a 3-2 margin, the FTC voted to finalize its controversial non-compete rule, which, generally, will prohibit businesses from entering into non-compete agreements with nearly all workers across the U.S. going forward and invalidate the existing non-competes of nearly 30 million workers.
Everything You Always Wanted to Know About California’s Workplace Violence Prevention Plan (But Were Afraid to Ask) - Answers to 10 Frequently Asked Questions On California’s New Law
Beginning July 1, 2024, a new California law (SB 553) will require most California employers to establish workplace violence prevention plans. We answer 10 frequently asked questions about the new law below.
Minimum Wage Increases and Ontario Employment Shake-up: What Employers Need to Know
Ontario’s Bill 149, Working for Workers Four Act, 2024, received royal assent on March 21 2024, bringing in new changes to Ontario’s employment landscape. Below are some of the key developments that businesses with employees in Ontario should be aware of.
Section 409A Valuations: Mastering the Art and Science in a Volatile Venture Market
Within the unpredictable landscape of start-ups and private companies, market volatility can significantly alter a company’s financial trajectory. An integral part of navigating this volatility is understanding the role and function of Section 409A[1] valuations. These valuations, which play a critical role in the financial and tax planning strategies of organizations, serve as an independent measure of a company’s common stock value. In this article, we explore the intricacies of Section 409A valuations, focusing on their importance, timing, and methodologies, and offer strategies for engaging with third-party firms to achieve a valuation that most closely aligns with your company’s worth.
Board Warns Employers to Pare Back Overbroad Non-Disparagement and Confidentiality Provisions in Severance Agreements
Severance agreements offered to non-supervisory employees that include broad-based non-disparagement and confidentiality provisions are unlawful according to the National Labor Relations Board. The Board’s decision in McLaren Macomb, 372 NLRB No. 58 (Feb. 21, 2023), reverses Trump administration era Board decisions on this issue, and if upheld, may have far reaching consequences for both unionized and non-unionized workplaces.
From the Edge - In the Boardroom: Special Edition - Lessons from Theranos
Our In the Boardroom: Practical Advice and Guidance podcast series features insights from Mintz Members Steve Osborn, Melanie Levy, and Tom Burton on a wide variety of topics specific to boards. With the conviction and 11-year sentence for former CEO Elizabeth Holmes, the team looks at the lessons to be learned from Theranos. The team discusses (1) the importance of open communication between board members and executives, (2) fostering a culture of compliance, and (3) tips for picking up on the early-warning signs.
Restricted Stock Units Unpacked
By Jacob Neumark
For many startup companies, compensating directors, officers, and employees can pose quite the challenge. While startup companies want to lure top talent, and incentivize workplace continuity and employee buy-in, they are often stressed for capital, and need to keep overhead costs low. One common approach to balancing these interests is for companies to offer restricted stock units (“RSUs,”) to their directors, officers, and employees as a form of compensation.
"Gig" Workers May Become Eligible to Receive Equity Compensation
By Dan DeWolf and Sanjana Ramkumar
The Securities and Exchange Commission (the “SEC”) recently voted to propose temporary rules to permit companies to provide equity compensation to certain workers known as “gig” or “platform” workers.
Statutory – not Shareholder – Activism: Governor Newsom Signs California’s Diversity Mandate into Law
By Jen Rubin
California has enacted the nation’s first diversity mandate for public company boards. As we previously reported, the new law (AB 979) builds upon California’s first-in-the-nation statutory gender mandate for public company boards.
Formation 101: Founder Stock and Vesting
In the second installment of Mintz’s multi-part series addressing common questions relating to establishing a new enterprise, Sam Effron and Sebastian Lucier discuss the issuance of shares to the founders, the mechanics and reasoning behind vesting and some important tax consequences relating to share issuances.
Key Considerations: Board of Director Composition and Director Recruiting in Early Stage Companies
By Christina Balestracci
The board of directors governs the activities of a company, overseeing and advising management while upholding its fiduciary duties to the company’s shareholders. A board is tasked with making high-level decisions, approving major policies and supervising performance and company strategy. Given its significant role, there are several important and strategic factors to consider when structuring a board of directors.
MintzEdge 101: The Value Of Mentors – John Morris, Vistage Chair
In this podcast, Jeremy Glaser discusses with John M. Morris the value of mentors and the role they can play in both early stage and later stage companies.
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