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Christen Sewell

Christen Sewell counsels private and public companies and executives on all aspects of employee benefits and executive compensation.

Christen has a particular focus on benefits issues for start-ups and emerging growth companies, including:

  • Advising on the design, compliance, and administration of stock options and equity-based plans and arrangements.
  • Drafting and negotiating executive compensation arrangements, including, employment, retention, change in control, and separation agreements.

Christen also advises clients on:

  • Tax-qualified retirement plans
  • Health and welfare plans
  • Non-qualified deferred compensation arrangements
  • Bonus and incentive plans
  • Corporate transactions (M&A, joint ventures, financings, spin-offs, public offerings, SPACs)

Christen’s expertise covers:

  • Code Section 409A deferred compensation rules
  • Tax rules governing equity compensation
  • Golden parachute rules under Code Section 280G
  • ERISA
  • COBRA
  • PPACA
  • GINA
  • HIPAA
Contact:Read more about Christen SewellEmail

July 10, 2024, Covington Alert

On July 3, 2024, Judge Ada Brown of the United States District Court for the Northern District of Texas granted the motions for a preliminary injunction—filed by Ryan LLC (“Ryan”) and several trade associations, including the U.S. Chamber of Commerce (“Chamber”)—to prevent the FTC’s rule banning non-compete clauses from going into effect, but the court’s order only applies to the named plaintiffs (i.e., it is not a nationwide injunction). The court has indicated that it will issue a final order on the merits by August 30, 2024, just a few days before the FTC’s rule is scheduled to go into effect on September 4. It is possible that Judge Brown enjoins the non-compete ban nationwide in her final order.

Background

In April, the FTC issued a final rule banning almost all non-competes with U.S. workers, with narrow exceptions, pursuant to its claimed authority to issue competition-related rules under Sections 5 and 6(g) of the FTC Act. That same day, Ryan challenged the FTC’s rule and, shortly thereafter, filed a motion to stay and preliminarily enjoin the rule, arguing that the FTC has no statutory authority to promulgate the rule, that the rule is the product of an unconstitutional exercise of power, and that the FTC’s acts were arbitrary and capricious. The Chamber and other trade groups intervened as plaintiffs on May 8, making substantially the same arguments.

The Order

In its Order, the court found that the Plaintiffs had demonstrated a likelihood of success that (1) the FTC does not have the statutory authority to engage in competition-related rulemaking, (2) the non-compete rule is arbitrary and capricious, and (3) the plaintiffs and intervenors had satisfied the standard to obtain injunctive relief.Continue Reading Texas District Court Enjoins FTC’s Rule Banning Non-Compete Clauses

Since 2020, with the adoption of Washington state’s non-compete statute (Chapter 49.62 of the Revised Code of Washington (“RCW 49.62”)), Washington has imposed significant restrictions on employer use of non-compete agreements with employees and independent contractors, permitting such agreements only subject to certain statutory and common-law requirements, including without limitation, a minimum annual earnings threshold (the 2024 limits are $120,559.99 for employees and $301,399.98 for independent contractors), and a Washington forum for any disputes.

Now, Senate Bill 5935 (“SB 5935”) – which takes effect on June 6, 2024 – amends the non-compete statute to further restrict the use of non-compete provisions and expand the types of agreements that may be considered non-competes. As a result, employers will need to take quick action to review their employment agreements and hiring processes to ensure compliance with the new law.

However, as discussed in our Covington Alert, on April 23, 2024 the Federal Trade Commission issued a final rule purporting to ban the use of non-competes with most U.S. workers.  The FTC Rule – should it become effective – would supersede inconsistent state laws.  The earliest the FTC Rule would take effect is late August 2024, and pending legal challenges may result in court orders that could delay or stay enforcement of the FTC Rule. Accordingly, employers with workers in Washington State should take steps to comply with SB 5935 before it takes effect on June 6, 2024.  Employers should also consider consulting with employment and executive compensation counsel for assistance with navigating the evolving non-compete landscape.

Here is an overview of the key changes under SB 5935:Continue Reading Changes to WA’s Non-Compete Law Require Employers to Take Action

Recent legislation allows employers to continue offering first-dollar telehealth coverage without jeopardizing the ability to contribute to a health savings account (“HSA”), but only through the end of the 2024 plan year.

Background – HSA Eligibility

Employees can make and receive pre-tax contributions to HSAs to use for qualified medical expenses. To be “eligible” to make or receive contributions to an HSA, you (a) must be covered by a high deductible health plan (“HDHP”), and (b) may not have other non-HDHP coverage that covers benefits before the HDHP deductible has been met.

Certain types of coverage, like dental and vision care, is disregarded in determining whether an individual is “eligible” to contribute to an HSA. Disregarded coverage does not have to be coordinated with HDHPs. This means that participants can receive “first-dollar” coverage for disregarded coverage and still be eligible to make or receive contributions to an HSA.

Telehealth is Disregarded Coverage Through 2024

Under prior legislation, telehealth coverage provided (i) during plan years beginning before December 31, 2021; and (ii) during the period beginning April 1, 2022 and ending December 31, 2022, is disregarded coverage under the HSA rules. See the CARES Act and the Consolidated Appropriations Act, 2022. Continue Reading Employers Can Continue to Cover Telehealth Benefits Before HDHP Deductible Is Met