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Jenna Wallace

Jenna Wallace advises clients on all aspects of employee benefits and executive compensation. Her practice covers a broad spectrum of plans and arrangements, such as:

  • tax-qualified retirement plans, including traditional and hybrid pension plans, 401(k) plans, and profit-sharing plans;
  • health and welfare plans, including medical, disability, cafeteria and severance plans;
  • equity-based compensation, including stock options, restricted stock, profits interests and phantom equity;
  • nonqualified deferred compensation plans;
  • employment, consulting and restrictive covenant agreements; and
  • international employment arrangements.

Jenna guides employers with respect to the administration of 401(k) and pension plans (including standards applicable to the investment of ERISA-covered assets), the requirements of the Patient Protection and Affordable Care Act, Section 409A of the Internal Revenue Code, management employment and equity arrangements, employee separations and international employment issues. Jenna also advises public and private companies in connection with mergers, acquisitions, and other corporate transactions, and advises private funds regarding investments by public and private employee benefit plans.

Jenna has an active pro bono practice, with a focus on assisting organizations working in Africa and other parts of the developing world.

Contact:Read more about Jenna WallaceEmail

National Labor Relations Board General Counsel (“GC”) Jennifer Abruzzo recently issued Memorandum GC 25-01 (“Memorandum”), suggesting new remedies for non-competes found to violate the National Labor Relations Act (“NLRA”) and proposing that the National Labor Relations Board (“NLRB”) presume “stay-or-pay” provisions to be unlawful.  Although the Memorandum is not binding law, employers should expect GC Abruzzo to direct the NLRB’s regional offices to bring complaints and seek remedies consistent with the Memorandum.  The NLRA generally only extends protections to nonsupervisory and nonmanagerial employees, and therefore the Memorandum is not applicable to non-compete or stay-or-pay provisions for employees who are supervisors or managers under the NLRA. 

Make-Whole Relief for Unlawful Non-Competes

Part I of the Memorandum expands upon a May 2023 memo in which GC Abruzzo outlined her position that, except in limited circumstances, non-compete provisions violate the NLRA.  In the new memo, GC Abruzzo asserts that the financial harms for employees subject to unlawful non-competes extend beyond costs associated with discipline or legal action and include “more pernicious harms” associated with attempted compliance, such as foregoing higher-paying job opportunities or incurring relocation costs.  Arguing that rescission—the typical remedy for offending non-compete provisions—fails to address these harms, GC Abruzzo proposes “make-whole relief” for employees impacted by unlawful non-competes.  Make-whole relief would include any wage and benefits differential caused by the non-compete restriction; costs of finding new employment that complied with the non-compete, such as lost wages due to being out of work longer or accepting a lower-paying job, or moving or retraining costs; and legal fees associated with defending against a claim regarding an unlawful non-compete. 

“Stay-or-Pay” Provisions Framework

Part II of the Memorandum proposes that the NLRB adopt a new framework for assessing so-called “stay-or-pay” provisions, to presume that any such provision is unlawful regardless of whether it was entered into voluntarily.  Stay-or-pay provisions are “any contract under which an employee must pay their employer if they separate from employment” and include training or educational repayment provisions, quit fees, damages clauses, and sign-on-bonuses or other types of cash payments tied to a mandatory stay period.Continue Reading NLRB General Counsel: “Make-Whole Relief” for Non-Competes and No More “Stay-or-Pay”

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