A new Labor Department rule attempted to make more employees eligible for overtime pay, but was halted by a federal judge. Under the rule, salaried workers who earn less than $59,000 a year must be compensated fairly for overtime work. Overtime pay of 150% of regular pay is not required to be paid to workers in certain capacities who make over a certain minimum. Those exceptions include executive, administrative, or professional capacities. To avoid paying the overtime, the employer must show that the worker qualifies in one of those exceptions and is paid over the designated minimum. During the Trump administration, the salary threshold was $35,568, above which employees do not have full protection. On July 1, 2024, the threshold increased to $43,888, and on January 1, 2025, it will rise to $58,656. The change could affect 4 million workers. As with the FTC non-compete rule, this rule was promptly challenged in court.

Well, never mind!

UPDATE: Within a few weeks of my initial blog posting, the rules changed yet again. This is typical for the modern regulatory environment, where every rule is challenged in court.

The DOL’s new overtime regulations were scheduled to go into effect on January 1, 2025. However, on November 15, 2024, a judge from the US District Court for the E.D. Tex invalidated it entirely.

With the court’s ruling, the number remains at the previous $35,568. There has been, and remains, an exemption for highly compensated employees making over $107,432, meaning those making that much need not be paid overtime. In between, whether employees are entitled to overtime depends on an assessment of factors relating to their job duties,

Given the recent election, it is likely that the DOL will not pursue an appeal. In any event, the injunction is likely to be in place for a significant period of time.

If you aren’t sure whether employees are entitled to overtime, seek legal counsel. The penalties for not paying an employee overtime he or she is entitled to are severe, and can reach back for years.

Peter Juran brings over 30 years of litigation experience, having tried cases to verdict before juries, judges, and arbitrators. He advises clients on employment law, construction disputes, intellectual property, real estate, corporate governance, and trust and estate matters. Certified as a mediator, Peter also conducts Superior Court Mediated Settlement Conferences. Known for his strategic approach, he helps clients navigate complex disputes, whether through negotiation or litigation, to achieve the best possible outcomes.

In my Outside General Counsel Services practice I tend to review a fair number of contracts sent to my clients. Most of the agreements are preprinted forms from trade vendors, suppliers, or service providers and many tend to be pretty lengthy for the average person to wade through. I always appreciate my clients sharing these contracts with me and asking for my advice on the legal terms which are buried within the 17 or more pages of 8 point type which comprise the standard form contract. It means they are concerned about the legal terms that might be included in the contract and want a professional opinion on whether those terms are overreaching.

Many business owners tend to focus on the business terms disclosed in the contract, and if that matches their understanding of the “deal” they often gloss over all the “legalease” which makes up the remainder of the agreement. Unfortunately, that can be a costly mistake later in the life of the relationship between the parties when something goes wrong, and the client wants to know if it can “get out of the contract,” sue the other party for breach of the agreement or recover some damages it believes the other party to the contract has caused.

Whether you fall into the category of the business owner who seeks legal advice before you sign most contracts, or the business owner who tends to focus solely on the business terms, this article will help you hone in on those legal provisions in contracts which are vitally important, and most often result in disappointment if a contractual relationship later turns sour.

Every contract contains legal provisions regarding standard boilerplate terms and conditions. Those terms and conditions may include provisions which tend to protect the drafting party, to the detriment of the countersigning party. Here are a few contractual provisions all business owners should pay particularly close attention to when signing any contract for goods or services:

Limited Warranty Provisions – Many companies who sell goods or services, or both, will try to limit the warranties made respecting the goods they sell or the services they provide. There is nothing inherently wrong with limiting the kind of warranty that a business will provide to its customers. That said, you should always review the warranty provisions in a contact and make sure that provision does not completely eliminate all warranties. I am always surprised when a business presents a contract which says it provides no warranties whatsoever respecting the good or services provided under the contract. At a minimum, a business should warrant that it has good title to the goods it is selling and that the goods are fit for the purpose intended, or that the services provided will be performed in a workmanlike manner according to industry standards. If a business is not willing to give these minimum warranties, you may want to consider moving on to another vendor or provider.

Limitation of Liability Provisions – It has become quite common for business contracts to limit the liability of a contracting party. This can take the form of a waiver of certain types of damages, such as consequential damages, lost profits, special, incidental, indirect, exemplary, or punitive damages resulting not only from performance or non-performance under the contract, but also under tort theories for negligence, strict liability, warranty, indemnity or in equity. These provisions are often one-sided, meaning both parties do not have the same limitations and restrictions. At a minimum, you should insist that such provisions are mutual and limit the liability for both sides to the contract. Alternatively, liability may be limited by limiting the total monetary amount of the damages arising under the contact to some formula based upon the amount of product purchased or the dollar amount of services provided during the contact. For instance, the contract may limit the total recovery to the amount paid for the purchase price of a good involved in the dispute or the amount paid for the services involved in a dispute. These sometimes result in dramatic limitations of recoverable damages.

Statute of Limitations Reduction Provisions – Some contracts will attempt to reduce the amount of time you have to sue for breach of contract as compared to the amount of time permitted under state law. While this is not improper in business contracts, it is something to take note of, and resist if the temporal period proposed is unreasonable.

Indemnification and Hold Harmless Provisions – Indemnification provisions are some of the most complicated and often misunderstood provisions in contracts. Again, they are often drafted as one-sided agreements which only protect and indemnify the drafter of the agreement. Indemnification provisions may require a party to defend a lawsuit brought by a third party against the indemnified party arising out of the contract, indemnify the risk of loss and damages for claims and suits brought by a third party against the indemnified party, and hold harmless the indemnified party from the claims asserted against them by a third party resulting from the contract. You should insist on mutual indemnification under the contract. Often these provisions seek an indemnification regardless of the negligence of the indemnified party and only exclude from the indemnification gross negligence or willful and malicious acts of the indemnified party. Because of the varied and complex nature of these provisions, unless you clearly understand the obligations you are committing to, and the rights you are potentially waiving, you should seek advice of counsel on this critical legal provision in a contact.

Shipping Terms and Risk of Loss – When a contract involves the purchase of goods which will be transported through interstate or international commerce, you should always be certain of where the risk of loss is, should something happen to those goods during shipment. If title to the goods passes once the goods are delivered by the supplier to a carrier, then the risk of loss is on you the purchaser and you should make certain you have adequately insured the goods from the risk of loss during transit. Most contracts are drafted in this manner. Some contracts are drafted where title remains with the seller until the goods reach their destination and title does not pass until the goods are delivered. In those situations, the seller is responsible for the risk of loss to the goods. Pay close attention to shipping terms and when the risk of loss passes to you as the buyer.

Termination Rights – Is the contract for a set term of months or years? Does it renew automatically if notice of termination is not provided? Does notice of termination need to be provided by a certain number of days or months in advance of the termination date? Do you even have a right of termination? Are there rights to cure defaults, and if so, is notice required for exercising a right of termination? All of these are important considerations. Knowing and understanding how you get out of a contract is an important consideration. You should always seek a right to terminate a contract upon a limited notice to the other party.

Dispute Resolution – Does the contract contain restrictions on how disputes about the contract or performance under the contract are resolved? Many business contracts contain mandatory arbitration provisions or mediation provisions to replace, or precede traditional litigation in state or federal court. You should know your rights and responsibilities under an alternative dispute resolution provision, which may include paying or sharing the cost of the mediation or the arbitration proceeding, a shifting of attorneys’ fees incurred by the parties, or binding decisions by tribunals other than a court of law. In addition, many such contracts include waivers of a right to a jury trial, a required governing law of a state other than the state in which you conduct your business, and a required venue for resolution of the dispute in another state. Read these provisions and make sure you understand the implications of agreeing to the form of dispute resolution provided in the contract.

While all of the provisions of a contract have importance and serve a specific function, these provisions are critical to understand and the most frequently bemoaned or litigated when a contractual relationship falls apart. Understanding them on the front end, and protecting your interests to level the playing field will save you time, money and headache down the road. Take some time to read these provisions, and if necessary, seek the advice of counsel on what the provisions mean, and how they will impact your business.

Ashley Rusher brings more than 35 years of experience in business bankruptcies, distressed debt workouts, problem loan recovery, real estate title litigation, and commercial litigation. She delivers practical, results-oriented solutions to clients, representing financial institutions, trade creditors, bankruptcy trustees, and businesses in complex matters such as debt restructuring and title curative litigation. As Outside General Counsel, Ashley provides trusted, business-centered legal advice to help clients achieve their goals.

Employers are often baffled when an employee requests “reasonable accommodations” under the Americans with Disabilities Act, popularly called the ADA. As described by Illinois Senator Tammy Duckworth, the ADA “allows persons with disabilities the opportunity to participate in the world around them.” One major section of this Act requires employers to provide “reasonable accommodations” to workers with disabilities. But what does that mean to an employer?

If an individual with a disability requests accommodation, the employer is required to enter into good faith discussions to determine if an accommodation is needed and, if so, what will accomplish the goal. A reasonable accommodation is broadly defined as a change in a working environment or the hiring process that allows qualified individuals with a disability to complete the essential functions of a job while not having the employer suffer an undue hardship. For example, a reasonable accommodation can be a wide range of things, such as adjusting work schedules or equipment, or changing the workplace environment. However, with such an expansive definition, it can be challenging to determine which accommodation provides the best relief for a situation. Sometimes, “outside the box thinking” is needed to find a creative solution to the employee’s needs.

To help address these issues, the U.S. Department of Labor has recently released an online tool called the “Situations and Solutions Finder.” This resource provides more than 700 real-life examples of reasonable accommodations shared by the Job Accommodation Network, a service offered by the Department’s Office of Disability Employment Policy. Such reasonable accommodations can be filtered by disabilities, limitations, and/or occupations.

While accommodations are unique to each individual, the Situations and Solutions Finder shows common patterns taken by workplaces and presents accommodations that have been considered reasonable for employers to satisfy. Both employers and workers can use this tool as a valuable starting point when exploring potential solutions to best support an employee with a disability. Ultimately, while the Situations and Solutions Finder may not provide a one-size-fits-all answer, it can help guide employers and workers toward the right path in identifying reasonable accommodations for the workplace.

The Situations and Solutions Finder can be accessed here.

If your employee has requested accommodations, be sure to treat the request seriously and respectfully and, if needed, seek legal counsel to ensure that the request is handled in compliance with the law.

Taylor Gibbs joined Blanco Tackabery in 2024 as part of the Civil Litigation Practice Group. She earned her B.A. in political science, summa cum laude, with a minor in religious studies from Appalachian State University and her J.D. from Wake Forest University School of Law. During law school, Taylor served as an executive member of Wake Forest’s Black Law Students’ Association and represented the school in regional and national moot court competitions as a member of the Jimmy Quander Moot Court Team.

Many employers try to protect their business territory and customer base by imposing restrictions on employees. Most popular among these are non-disclosure agreements (“Don’t use or share my trade secrets!”), non-solicitation of customer agreements (“Don’t steal my customers!”) and non-competition agreements (“Don’t even go into the same business as me!”). One of these, non-competition agreements, has been under fire from a Federal Trade Commission rule which would bar the enforceability of most of those agreements. The few that would remain valid are limited to high level executives making more than $150,000 per year, or those that are part of the sale of a business.

Many people, including the Biden administration, have long felt that employers overreach in restricting their employees’ ability to earn a living in their field of expertise after leaving the employer’s business. Indeed, North Carolina courts have long imposed limitations and restrictions on the enforceability of such agreements. They require the employer to prove the agreement’s reasonableness as to time and territory, among other restrictions. This has made enforcing these agreements both hard and unpredictable for many years. Still, the agreements remain a popular approach for many businessmen. The new FTC rule, if allowed to go into effect, would at least simplify things, but not in a way that employers will like.

Here are the basics: The Federal Trade Commission published the new rule which declares it to be an unfair trade practice to even include such restrictions in their employee contracts. The rule was set to take effect in early September unless “stayed” by a court. Several business organizations, including the U.S. Chamber of Commerce, sued over the rule, and at least one court has put it on hold until it resolves a lawsuit on its validity. On August 20, 2024, in Ryan, LLC v. FTC, a U.S. District Court held that the FTC’s non-compete rule is unlawful and ordering that the FTC’s non-compete rule could not take effect on September 4, 2024, or thereafter. This ruling prevents the FTC from enforcement of the rule against any company nationwide.

At least two other cases challenging the rule have also gone poorly for the FTC. For now, it appears that it will be a long time, if at all, before the rule can take effect. 1 Then again, it appears that the National Labor Relations Board may join the fray. On October 7, 2024, its General Counsel issued a memo opining that broad non-competes act chill the employees’ right to “concerted activity” and may violate the National Labor Relations Act. Stay tuned!

Regardless of the FTC rule status or the NLRB position, individual employees can always challenge the reasonableness of the restrictions imposed on them by virtue of their agreements, which can pose an expensive and risky threat to employers. The contracts in question are assessed on an individual basis, and where the employer can convince the court that the agreement is narrowly tailored to protect the employer’s legitimate interests, they should survive. This is not always easy, however.

Fortunately, other alternatives are available. Non-solicitation clauses, which only prohibit the “raiding” of the employer’s customers, are, as a practical matter, already more narrowly drawn that non-competition clauses. Further, it is easier for the employer to identify and prove to a court that the ex-employee is taking advantage of information obtained while employed— valuable as both a legal and psychological distinction when advocating for enforcement of a restriction. These clauses are, therefore, easier to enforce in North Carolina anyway, and if they can accomplish the employer’s goals, they are preferable to a blanket ban on competition. Likewise, North Carolina courts are much more open to enforcing non-disclosure agreements, if the information protected is truly proprietary “trade secret” type information.

Employers who feel the need to restrict employees’ ability to attack their business upon departure should definitely consult counsel to ensure that the strongest restrictions which are enforceable are put into place.

1 However, the FTC retains the ability to go after individual cases where the employer’s actions are deemed to be anti-competitive activity, and it may pursue enforcement actions on a case-by-case basis. The FTC considers non-compete agreements to be violations of Section 5 of the Federal Trade Commission Act (FTCA), which bans “unfair methods of competition” and “unfair or deceptive acts or practices.” The FTC has the power to review and enforce that law.

Peter Juran brings over 30 years of litigation experience, having tried cases to verdict before juries, judges, and arbitrators. He advises clients on employment law, construction disputes, intellectual property, real estate, corporate governance, and trust and estate matters. Certified as a mediator, Peter also conducts Superior Court Mediated Settlement Conferences. Known for his strategic approach, he helps clients navigate complex disputes, whether through negotiation or litigation, to achieve the best possible outcomes.

It is a common practice for landlords to check the criminal background of potential tenants before approving or denying an application. Most landlords, relying on the traditional viewpoint holding that criminal history may reveal the character of a person and indicate an inclination toward future criminal acts, check a potential tenant’s criminal background to minimize the risk of a future tenant creating health and safety risks or damaging the leased property. Despite the commonness of the practice, landlords may not realize that they are potentially exposing themselves to liability under the Fair Housing Act and related laws by basing decisions on applicants’ criminal background.

The data the Department of Housing and Urban Development (“HUD”) has reviewed shows that Black and Brown persons are arrested, charged, convicted, and incarcerated at a disproportionate rate compared to other racial groups in the United States.1 There are a multitude of reasons for this disparity, including “The New Jim Crow”2 and discriminatory policing. Regardless of the cause, those statistics indicate Black and Brown persons are more likely to have a criminal background than white persons. As a result, since Black and Brown persons have more criminal records than white persons, using criminal background to exclude people from housing, jobs, or anything will result in more Black and Brown persons being excluded than those from other racial groups.

That is a potential problem under the Fair Housing Act, which prohibits discrimination in the rental context on the basis of seven protected classes, including race. Discrimination under the Fair Housing Act can take several different forms. One form of discrimination is based on the disparate impact theory, which covers situations where persons belonging to a protected class are disproportionately impacted by a housing policy or practice. When there is no legitimate reason supporting the policy or practice that creates the disproportionate impact, the Fair Housing Act will deem the policy or practice discriminatory.

Since excluding potential tenants on the basis of criminal activity will affect more Black and Brown persons than other racial groups, it has a disproportionate impact on Black and Brown persons. Accordingly, landlords must have a legitimate reason to support the exclusion. Otherwise, the landlord may face liability under the Fair Housing Act.

HUD has been heavily focused on how housing providers use criminal background in housing decisions for many years. HUD recently issued new guidance on this issue, titled GUIDANCE ON APPLICATION OF THE FAIR HOUSING ACT TO THE SCREENING OF APPLICANTS FOR RENTAL HOUSING on April 29, 2024. In that guidance, HUD reiterates that overly broad criminal background screenings that have unjustified disparate impact violates the Fair Housing Act. In light of this guidance, it is important for housing providers to give some consideration to how they are screening potential tenants.

To comply with the Fair Housing Act, landlords who use criminal background screening should consider developing a written policy and procedure governing the use of criminal history in rental decisions. Recent HUD guidance and proposed rules indicate HUD believes an individual assessment of applicants’ criminal background is required in all cases. Accordingly, a landlord’s screening policy should define and explain how the landlord will decide each case. At a minimum, the policy should clearly define and state the categories of convictions that will affect a rental decision. For instance, does the landlord only want to exclude people for violent crimes? What about drug crimes? The policy must also clearly state how the decision to rent to someone will be affected. For instance, will there be an automatic denial for some crimes and discretionary denial for other? Furthermore, the policy should establish timeframes for how long a conviction will affect decisions to rent to a person. For instance, a landlord might decide to have a longer period of exclusion for murder than for a simple possession of marijuana charge. Most importantly, each exclusion, whether actual or potential, must be justified by a credible threat to health and safety. Arbitrary and overly broad exclusions are particularly problematic under the Fair Housing Act.

Now more so than ever it is important for landlords to put some thought into how and why they are making rental decisions based on criminal background. The experienced attorneys at Blanco Tackabery stand ready to provide counsel for making those difficult decisions or designing a policy to assist in making them.

1 See HUD, GUIDANCE ON APPLICATION OF THE FAIR HOUSING ACT TO THE SCREENING OF APPLICANTS FOR RENTAL HOUSING, pg. 21 (April 29, 2024), Guidance on Application of the Fair Housing Act to the Screening of Applicants for Rental Housing (hud.gov); see also HUD, GUIDANCE ON APPLICATION OF FAIR HOUSING ACT STANDARDS TO USE OF CRIMINAL RECORDS BY PROVIDERS OF HOUSING AND REAL ESTATE-RELATED TRANSACTIONS (April 4, 2016), Office of the General Counsel (hud.gov).

2 Michelle Alexander popularized the term “The New Jim Crow” with her 2010 non-fiction book with that title. As a concept, The New Jim Crow refers to the theory that the United States’ criminal justice system is a technology used to exert racial social control and which has an effect very much like the original Jim Crow laws of racial segregation.

Henry Hilston employs his experience in state and federal litigation as an asset in his representation of affordable and conventional multifamily property owners and managers. In that practice, he advises property management companies on a wide range of issues, including evictions and other landlord-tenant disputes, VAWA, the Fair Housing Act, and compliance issues under federal and state affordable housing programs, such as the Low-Income Housing Tax Credit (LIHTC) program and HUD and USDA-Rural Development rental subsidy programs. He also assists those clients with the preparation, review, and revision of management documents, including tenant selection plans, management agreements, and leases.

An easement is the right to make use of land owned by another person. For example, an easement could give a person the right to maintain an unimpeded scenic view from his property by restricting a neighboring landowner’s right to make use of her property in such a way that would impair her neighbor’s view. In this example, the first property owner’s right in the land of his neighbor is, essentially, a “negative right” that operates as a restraint on the second property owner’s right to make free use of her own property, rather than an “affirmative right” for the first property owner to make some specific use of the second property owner’s property himself.

However, when most people think of easements, they probably think first of access easements, which typically exist to provide a landowner with a means of access to his property from a public road over his neighbor’s land. There are a number of ways that such easements might exist. They could be expressly granted or reserved pursuant to a recorded instrument, such as a deed, or they might arise by implication or operation of law, where, for example, title to a single tract of land is subdivided into two tracts with the severance leaving one of the subdivisions without access, in which event a so-called “easement by necessity” might arise in favor of the owner of the landlocked tract.

One way that an easement might arise, which has existed under North Carolina law for many years but is not frequently used, is through a statutory cartway proceeding. These proceedings are governed by Article 4 of Chapter 136 of the North Carolina General Statutes, which provides in pertinent part that, if a person is engaged or preparing to engage in certain activity, including cultivation for agricultural purposes, timbering, quarrying for minerals, or the operation of an industrial or manufacturing plant, but the property on which such activity is to be conducted lacks access from a public road or other adequate legal access, other than from a navigable waterway, then he can institute a special proceeding before the Clerk of Superior Court to establish his entitlement to a statutory cartway over the land of a neighboring property owner.

Upon filing such a proceeding, all the landlocked person needs to do is demonstrate to the Clerk that it is necessary, reasonable, and just that he be granted the requested cartway. Once the landlocked property owner establishes his entitlement to the cartway, the Clerk then “appoint[s] a jury of view of three disinterested freeholders to view the premises and lay off” the course of the cartway “and assess the damages the owner or owners of the land crossed may sustain thereby.” N.C. Gen. Stat. § 136-69(a). The three-person “jury of view” appointed by the Clerk must then make a written report of its findings and recommendations to the Clerk. Any party to the special proceeding may then file exceptions to the jury’s report. Any such exceptions are heard and determined in the first instance by the Clerk, who “may affirm or modify said report, or set the same aside and order a new jury of view.” Id. Any party who is aggrieved by the Clerk’s final order or judgment “may appeal to the superior court for a jury trial de novo on all issues including the right to relief, the location of [the] cartway, . . . and the assessment of damages.” N.C. Gen. Stat. § 136-68. Once the report is approved and finalized, and any appellate rights are exhausted, the party who has been granted a cartway must pay into the Clerk’s office the amount of damages assessed in order to acquire the legal right to install and utilize the cartway that he has been awarded.

The statutory process for acquiring a cartway has existed since at least the 19th century, as a modern reader might surmise from the use of the archaic terminology, including for example, the requirement for the three jurors on the “jury of view” to be “disinterested freeholders.” While the applicable statutory regime has undergone relatively little legislative updating since its original enactment, there have been occasional calls for modernization, including calls for changes that would make cartways more readily obtainable. As development continues to increase across North Carolina, along with concomitant opportunities for development to be stymied by lack of legal access to otherwise developable properties, perhaps calls for the modernization of this little utilized means for acquiring access may renew or grow more sustained.

Chad Archer brings extensive expertise in state and federal litigation and was recently named to Business North Carolina’s Legal Elite Honorees 2024 as well as the 2024 edition of The Best Lawyers: Ones to Watch® in America. In his civil litigation practice, he advises clients on a wide range of issues, including trusts and estates, appeals, contract disputes, commercial and corporate disputes, complex business litigation and real property disputes.