by Kim, Lahey & Killough Law FirmKim, Lahey & Killough Listed in 2025 Best Law Firms
Kim, Lahey & Killough Law Firm has been named in the 2025 edition of Best Law Firms® in Greenville and Charleston. Firms included in the 2025 Best Law Firms list are recognized for professional excellence with consistently impressive ratings from clients and peers. Each year since its formation, Kim, Lahey & Killough Law Firm has received this esteemed recognition.
Ranked firms, presented in three tiers, are listed on a national and regional-based scale. Firms that receive a tier designation reflect the highest level of respect a firm can earn among other leading lawyers and clients in the same communities and practice areas.
The Kim, Lahey & Killough Charleston office is recognized in the areas of Trademark Law, Intellectual Property Litigation, Corporate Law and Business Organizations (LLCs and Partnerships).
In the Greenville, SC market, the firm is recognized in the areas of Trademark Law, Copyright Law, Intellectual Property Litigation, Patent Law and Patent Litigation.
With offices in Greenville and Charleston, SC, and Brevard, NC, Kim, Lahey & Killough Law Firm is devoted to helping clients establish, enforce, and leverage their intellectual property rights from the Upstate to the Lowcountry to across the globe. The firm serves the manufacturing, software, energy, finance, hospitality, tourism, defense, agriculture and technology industries as well as universities. Key practice areas include intellectual property, business and commercial litigation, mediation, employment, corporate and business matters including formation and structure, mergers and acquisitions, contracts, and cybersecurity.
by Kim, Lahey & Killough Law FirmFranchisees as Third-Party Beneficiaries
Franchise attorney Emily Bohan chosen for publication in the prestigious ABA Forum on Franchise Law Journal—explores Third-Party Beneficiary Rights in Franchise Law
Kim, Lahey & Killough attorney Emily Bohan and Hannah M. Leiendecker of the Faegre Drinker firm in Minneapolis, MN published an article in the latest edition of Franchise Law Journal with the American Bar Association. The article, “Franchisees as Third-Party Beneficiaries to Franchisor’s Agreements with Other Franchisees or Vendors” sheds light on the complex world of third-party beneficiary rights in franchising and examines how individuals or entities not directly party to a contract may still enforce its terms under certain circumstances. This article was published immediately prior to the annual meeting of the ABA Forum on Franchising, at which Emily was in attendance last week.
Executive summary:
A significant impact on Dispute Resolution: Third-party beneficiary rights can play a crucial role in franchise disputes, often determining whether a case has any remedy at all. This underscores the importance of understanding these rights for all parties involved in franchise relationships.
Clear Intent: Courts typically require clear evidence that the contracting parties intended to benefit the third party. This high standard emphasizes the need for precise language in franchise-related contracts.
Franchisee Enforcement of Vendor Agreements: In some cases, franchisees have successfully enforced agreements between their franchisor and vendors as third-party beneficiaries. This highlights a potential avenue for franchisees to protect their interests.
Employee “Poaching” Restrictions: Some franchisors have utilized third-party beneficiary rights to limit employee recruitment between franchisees. However, Bohan and Leiendecker note that this practice faces increasing legal scrutiny and potential antitrust challenges.
Rare Vendor Claims: While uncommon, there are instances where third-party vendors have successfully claimed benefits under franchise agreements. These cases often hinge on exceptionally close relationships between the vendor and franchisor.
Highly Fact-Specific Nature: Bohan and Leiendecker emphasize that third-party beneficiary cases in franchise law are typically unpredictable and heavily dependent on specific circumstances. This unpredictability underscores the need for careful contract drafting and legal guidance.
The full article provides a thorough examination of relevant case law and offers practical insights for franchise industry professionals. It serves as a valuable resource for franchisors, franchisees, and their legal counsel in navigating the complex web of contractual relationships inherent in franchise operations.
Bohan and Leiendecker emphasize that these cases are highly fact-specific and often unpredictable. Both recommend that franchisors and franchisees carefully consider potential third-party beneficiaries when drafting contracts. They suggest a proactive approach and recommend that parties mitigate uncertainty and reduce ambiguity by explicitly stating their intentions regarding third-party benefits within their contracts.
The full article, “Franchisees as Third-Party Beneficiaries to Franchisor’s Agreements with Other Franchisees or Vendors,” is available in the current issue of the Franchise Law Journal.
Copyright 2024. Published in The Franchise Law Journal, Vol. 43, No. 3, Fall 2024, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.
Emily Bohan is an attorney in the Greenville, S.C. office of Kim Lahey & Killough. Hannah M. Leiendecker is an attorney at Faegre Drinker, practicing in the Minneapolis office.
by Kim, Lahey & Killough Law FirmFTC Non-Compete Ban Updates
FTC Non-Compete Ban: Current Status and Implications for Businesses
Presented September, 2024 by Kim, Lahey & Killough attorney Casey Martens
The Federal Trade Commission’s (FTC) recent attempt to ban most non-compete clauses in employer-employee contracts has encountered significant legal challenges, creating uncertainty in the business landscape.
On April 23, 2024, the FTC finalized a rule banning most non-compete clauses, originally set to take effect on September 4, 2024. However, legal challenges have substantially altered this timeline.
In July 2024, a federal court in Pennsylvania upheld the FTC’s authority to issue the ban. Conversely, on August 20, 2024, a Texas court granted a nationwide injunction against the rule’s enforcement, ruling that the FTC had exceeded its statutory authority and that the rule was arbitrary and capricious.
As a result of the Texas decision, the FTC is currently unable to enforce the rule. This provides a temporary reprieve for employers, suspending the need to comply with the rule’s requirements. However, businesses should remain vigilant, as the legal landscape continues to evolve.
While the FTC may lose this particular battle, the war on non-competes is far from over – the debate over non-compete agreements persists. State legislatures continue to introduce laws limiting the scope of non-competes, creating a complex regulatory environment, particularly for businesses with multi-state operations.
Given the uncertain future of non-compete agreements, businesses should consider alternative methods to protect their interests, such as:
- Non-disclosure agreements (NDAs) to safeguard confidential information and trade secrets
- Non-solicitation agreements to prevent former employees from poaching customers or staff
- Ownership and assignment of inventions (OAI) agreements for intellectual property protection
- Robust trade secret policies and internal controls
- Other intellectual property strategies involving copyrights, patents, and trademarks
When implementing these alternatives, it is crucial to ensure they are narrowly drawn and tailored to protect legitimate business interests without overreaching.
As the legal battle over non-compete agreements continues, businesses are advised to stay informed about the latest developments and be prepared to adapt their practices accordingly. Consulting with legal counsel to review and update employment agreements in light of these changes is highly recommended.
Casey Martens is an attorney in the firm’s Brevard, NC office. Licensed in North Carolina, South Carolina and Georgia, Casey represents employers and workers in employment matters, as well as business and intellectual property disputes.
by Kim, Lahey & Killough Law FirmFive Kim Lahey Killough attorneys named 2025 Best Lawyers
Five Kim Lahey Killough attorneys named in Best Lawyers for work in intellectual property, corporate and employment law
Kim, Lahey & Killough Law Firm is honored to announce that five of the firm attorneys are named in The Best Lawyers in America® 2025 edition:
Charleston patent attorney B. C. Killough is recognized for his work in:
- Business Organizations (including LLCs and Partnerships)
- Corporate Law
- Litigation – Intellectual Property
- Patent Law
- Trademark Law
Previously, Killough was honored as the Corporate Law Lawyer of the Year for the Charleston metro in 2015.
In the Greenville, SC metro market, four Kim, Lahey & Killough attorneys are recognized, including firm founder Douglas W. Kim, who is honored for his work in the areas of:
- Litigation – Intellectual Property
- Litigation – Patent
- Patent Law
- Trade Secrets Law
- Trademark Law
Kim has previously been recognized as a Lawyer of the Year in Greenville, SC, in two of these areas: as Trademark Lawyer of the Year in 2022 and the Patent Lawyer of the Year in 2019.
Greenville intellectual property attorney Seann Lahey
is recognized for his work in:
- Trademark Law
Additionally, Seann has extensive experience dealing with international and U.S. patent prosecution. His practice also regularly includes matters on trademarks, copyrights, trade secrets, licensing of intellectual property rights, and rendering legal opinions on validity, infringement and enforceability of intellectual property rights, as well as litigation involving intellectual property rights.
IP attorney Hunter S. Freeman
is commended for his work in:
- Commercial Litigation
- Copyright Law
- Litigation – Intellectual Property
- Trademark Law
As an Intellectual Property attorney, experienced litigator and certified mediator, Hunter Freeman’s 20+ years of experience and insight provide novel ways for clients to create value through the protection, prosecution and enforcement of their IP.
Attorney Casey Martens practices employment and business law in both the Greenville SC and Brevard NC offices of Kim, Lahey & Killough. Licensed in South Carolina, North Carolina and Georgia, her law practice focuses in the areas of business disputes and litigation, state and federal employment law, drafting and enforcement of restrictive covenants, and business disputes involving tortious interference with contract. Casey is recognized as a 2025 Best Lawyers One to Watch in America in the areas of:
- Employee Benefits (ERISA) Law
- Labor and Employment Law – Employee
- Labor and Employment Law – Management
- Litigation – Labor and Employment
Since 1983, The Best Lawyers in America has compiled and reviewed peer evaluations from across the United States to identify an annual list of honorees. The Best Lawyers in America recognizes only the top 5.3% of lawyers in the nation across 150 practice areas.
With offices in Greenville and Charleston, SC and Brevard, NC, the Kim, Lahey & Killough Law Firm is devoted to helping clients establish, enforce, and leverage their intellectual property rights from the Upstate, to the Lowcountry to across the globe.
by Kim, Lahey & Killough Law FirmSeven attorneys named 2024 Legal Elite
Seven Kim, Lahey & Killough attorneys listed as 2024 Legal Elite by Charleston Business and Greenville Business Magazines
Kim, Lahey & Killough is pleased to announce that seven attorneys have been named in the 2024 Legal Elite lists. Notably, all five of the firm’s registered patent attorneys were recognized for their work in the areas of intellectual property and innovation, a core focus of the law firm.
Greenville Business Magazine and Charleston Business Magazine recognized Doug Kim, Seann Lahey, Hunter Freeman, Robert Merting and B.C. Killough for their contributions to Intellectual Property and Innovation. “This recognition from our peers is a testament to the depth and breadth of our IP practice, as well as our firm’s commitment to excellence. We are honored to have our entire patent team acknowledged, alongside our talented colleagues in employment and corporate law,” commented firm founder, Doug Kim. Additionally, Casey Martens and Emily Bohan were honored for their work in Employment Law and Corporate Law – Business Organization matters.
Doug Kim is no stranger to legal awards and accolades. In addition to his Legal Elite IP and Innovation recognition, Kim has been listed in South Carolina Super Lawyers annually since 2017, and he has been recognized in the Greenville, SC Best Lawyers® list, named the Best Lawyers® Trademark Lawyer of The Year, the Best Lawyers® Patent Lawyer of The Year, and an IP Star by Managing Intellectual Property magazine.
Firm co-founder Seann Lahey is noted for his IP and Innovation work not only by Legal Elite of the Upstate but is also listed in South Carolina Super Lawyers as well as Best Lawyers in America for his work in intellectual property law. Seann has extensive experience dealing with international and U.S. patent prosecution, trademarks, copyrights, trade secrets, licensing of intellectual property rights, and rendering legal opinions on validity, infringement and enforceability of intellectual property rights, as well as IP litigation.
Hunter Freeman has over 20 years of experience as a litigator and certified mediator and works to provide novel ways for clients to create value through the protection, prosecution and enforcement of their IP including trademarks, service marks and copyrights. As the 2024 Chairman of the InnoVision Awards, Hunter works hard to provide opportunities for start ups and businesses in the state to advance technological innovations. In addition to Legal Elite, Hunter has been recognized for his legal efforts by both Super Lawyers and The Best Lawyers in America ® for his work in intellectual property and business litigation.
Greenville patent attorney Robert Merting joins his colleagues as a named Legal Elite for IP and Innovation this year. Robert’s general business practice serves a variety of clients and industries, including builders, manufacturers, inventors, professionals and governmental organizations. He counsels businesses and individuals on IP contracts, corporate IP agreements, trademarks, non-disclosure agreements, and patents.
Charleston patent attorney B.C. Killough has counseled businesses and professionals for over 30 years. Regularly recognized for his legal efforts on behalf of his clients, Killough’s Legal Elite for IP and Innovation award is joined by recognition as a Senior Fellow by the Litigation Counsel of America, as an AV preeminent rated attorney with Martindale-Hubbell, as a Best Lawyers Corporate Lawyer of the Year for the Charleston market, and Thomson Reuters has recognized Killough as a Stand-Out Lawyer – a recognition bestowed by in-house counsel peers.
Casey Martens is recognized as a Legal Elite for her work in employment law for both plaintiffs and defendants. Casey’s legal practice includes business litigation, intellectual property and employment counsel to small and medium-sized businesses, as well as to employees in employment disputes. Licensed to practice in South Carolina, North Carolina and Georgia, Casey heads up the firm’s Brevard, NC office.
Business attorney Emily Bohan is commended as a Legal Elite for her efforts with Corporate Law – Business Organization matters. Emily focuses her legal practice on franchise law, business formation and organizations (Including LLC’s and Partnerships), and labor and employment matters. And when businesses are in a dispute, Emily serves as a certified mediator, to assist parties to come to a resolution outside of the courtroom. Greenville Business Magazine recognized Emily as a 2024 SC Women in Business.
The Legal Elite are selected annually through peer nominations from attorneys throughout the state of South Carolina in 50 legal practice areas.
About Kim, Lahey & Killough
With offices in Greenville and Charleston, SC and Brevard, NC, the Kim, Lahey & Killough Law Firm is devoted to helping clients establish, enforce, and leverage their intellectual property rights from the Upstate, to the Lowcountry to across the globe.
by Kim, Lahey & Killough Law FirmEmily Bohan named 2024 Women in Business
Congratulations to Kim, Lahey & Killough Greenville Attorney Emily Bohan, named one of the 2024 SC Women in Business in recognition of her outstanding contributions to the legal and business communities in Greenville.
Emily Bohan has served as a leader and mentor to small and medium business owners for years. She has been a member of the Greenville Professional Women’s Forum member since 2011 and has served as an executive board member for the 2017-18, and 2020-2021 terms. Her dedication to empowering women in business and fostering their growth and development has been unwavering.
Her commitment to fostering collaboration and knowledge sharing within the local business community is exemplified by her co-founding of the networking group, a local confidential peer advisory forum My Trusted Advisors. This initiative has provided a valuable platform for small and medium-sized business owners to connect, learn, and grow together.
Emily Bohan’s business acumen is best defined through her experience running the Greenville PuroClean franchise, which she owned, managed and recently sold after 15 successful years. Her firsthand experience in navigating the complexities of running a franchise operation equips her with insights into the myriad of challenges faced by businesses. During her years there she was active and served as a presenter in both PuroClean’s Impact Group and PuroWomen, a women’s growth group. She has Chaired the Greenville Technical College, Environmental, Occupational Health & Safety Advisory Committee since 2022.
“What the public does not see every day is Emily’s determination to not only provide top notch legal representation to her legal clients, but to advance the knowledge base and successes of her peers through the delivery of continuing legal education courses and lunch and learns to educate and uplift those around her. Emily is a true asset to the legal and business communities in Greenville. Her leadership, mentorship, and entrepreneurial spirit are deserving of this recognition and we are proud to have her on our team.”
Emily Bohan focuses her law practice in the areas of business, franchise and employment law and is featured on page 48 of the July issue of Greenville Business Magazine.
by Kim, Lahey & Killough Law Firm2024 South Carolina Super Lawyers
Five Kim, Lahey & Killough attorneys named in 2024 South Carolina Super Lawyers
Four patent attorneys with Kim, Lahey & Killough – Doug Kim, Seann Lahey, B.C. Killough and Hunter Freeman – have been named in the 2024 South Carolina Super Lawyers list as top-rated intellectual property attorneys and attorney Casey Martens has been named in the 2024 South Carolina Rising Stars list as a top-rated employment and labor attorney in the Greenville and Charleston markets. 2024 marks the tenth year that B.C. Killough has been honored with inclusion on the list. “I am honored to work with such a dedicated, innovative team that puts our clients first and this recognition showcases our unwavering commitment to excellence in providing legal services,” commented firm founder Doug Kim.
Each year, no more than five percent of the lawyers in the state are selected by the research team at Super Lawyers to receive the honor of inclusion on the Super Lawyers list and no more than 2.5 percent of the lawyers in the state are selected to be listed as Rising Stars. Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement.
Doug Kim has been listed in South Carolina Super Lawyer annually since 2017. With experience with matters in brand and invention protection, licensing, patents, trademarks, and business disputes, he has also been recognized in the Greenville, SC Best Lawyers® list, named the Trademark Lawyer of The Year, the Best Lawyers® Patent Lawyer of The Year, an IP Star by Managing Intellectual Property magazine and a Legal Elite of the Upstate by Greenville Business Magazine.
Firm co-founder Seann Lahey’s practice seeks to provide comprehensive and integrated legal services for companies whose products or services are technical in nature. Seann has extensive experience dealing with international and U.S. patent prosecution, trademarks, copyrights, trade secrets, licensing of intellectual property rights, and rendering legal opinions on validity, infringement and enforceability of intellectual property rights, as well as ip litigation. He advises startups, middle market companies, multinational corporations, universities, and individuals alike on various intellectual property protection and enforcement strategies. Seann has worked across a range of technologies and industries including automotive, agriculture, biotech, composite technology, construction, education, manufacturing, medical, and others. In addition to Super Lawyers, he has also been recognized by Greenville Business Magazine as a Legal Elite of the Upstate for his work in intellectual property law.
B.C. Killough celebrates his tenth year listed in South Carolina Super Lawyers for his intellectual property work in the Charleston metro area. His practice areas include brand and invention protection, technology licensing, contracts, company formation, patents, trademarks, copyright, technology transfer, IP litigation, trade secrets, business disputes, commercial transactions, and mediations of intellectual property and commercial disputes. Bill Killough has also been recognized as a Senior Fellow by the Litigation Counsel of America, an AV preeminent rated attorney with Martindale-Hubbell, a Charleston Best Lawyers Corporate Lawyer of the Year, a Legal Elite by Charleston Business Magazine for Intellectual Property and Innovation and in 2024, Thomson Reuters named him a Stand-Out Lawyer.
Previously recognized as a Super Lawyers South Carolina Rising Star, Hunter Freeman joins his colleagues and is listed in South Carolina Super Lawyers for his work in intellectual property litigation in the Greenville market. His 20+ years of experience and insight as a patent attorney, litigator and mediator provide novel ways for clients to create value through the protection, utilization and enforcement of their IP both in and out of the courtroom. In addition to Super Lawyers, Hunter has been recognized for his work in intellectual property litigation by The Best Lawyers in America ® and as a Legal Elite of the Upstate by Greenville Business Magazine for Intellectual Property and Innovation as well as Business Litigation.
2024 Super Lawyers South Carolina Rising Star Casey Martens practices employment and business law in both the Greenville SC and Brevard NC offices of Kim, Lahey & Killough. Licensed in South Carolina, North Carolina and Georgia, her law practice focuses in the areas of business disputes and litigation, state and federal employment law, drafting and enforcement of restrictive covenants, business disputes involving tortious interference with contract, and the like. She has also been previously recognized by Greenville Business Magazine as a Legal Elite of the Upstate.
About Kim, Lahey & Killough
With offices in Greenville and Charleston, SC and Brevard, NC, the Kim, Lahey & Killough Law Firm is devoted to helping clients establish, enforce, and leverage their intellectual property rights from the Upstate, to the Lowcountry to across the globe.
by Kim, Lahey & Killough Law FirmParalegal Scholarship at Tri-County Technical College awarded
Kim, Lahey & Killough awards Paralegal Scholarship at Tri-County Technical College
Pictured, left to right: Kim Lahey & Killough attorneys Tony Nolte, Casey Martens, Seann Lahey, Doug Kim, Tri-County Technical College Paralegal Scholarship recipient Jennifer Dill, Heidi Reeves, Manager of Donor Relations, Tri-County Technical College, Jonathan Cauthen, Director of Development, Tri-County Technical College, attorneys Emily Bohan and Hunter Freeman.
Kim, Lahey & Killough Law Firm announced the winner of a $1,500 Paralegal Scholarship with Tri-County Technical College Foundation at a luncheon April 11th at the Thornblade Club in Greer. The Firm congratulates Paralegal Emphasis sophomore Jennifer Dill as this year’s scholarship recipient. This merit scholarship is awarded to a student who demonstrates academic excellence, dedication and passion for the legal profession.
Kim, Lahey & Killough is committed to supporting education in our community and are proud to invest in the next generation of legal professionals. “We recognize the invaluable role of paralegals and this scholarship is one way we show our appreciation and encouragement. As we honor the recipient, we celebrate her dedication to the legal profession, her pursuit of knowledge, and her commitment to making a difference. We hope that this scholarship be a stepping stone for her to provide even greater contributions to the field of law,” commented firm founder Doug Kim.
Tri-County Technical College is a public, two-year community and technical college serving Anderson, Oconee and Pickens counties in South Carolina and is accredited by the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC). The Criminal Justice, Paralegal Emphasis program at TCTC is an associate degree program offered both at the Pendleton Campus and online. The College advances economic development in the tri-county region by preparing a highly skilled workforce.
With offices in Greenville and Charleston, SC and Brevard, NC, the Kim, Lahey & Killough Law Firm is devoted to helping clients establish, enforce, and leverage their intellectual property rights from the Upstate, to the Lowcountry to across the globe. For more information, visit the firm website at kimandlahey.com.
by Kim, Lahey & Killough Law FirmGeigTech East Bay awarded $34.6 million in patent infringement case
South Carolina company GeigTech East Bay, LLC, awarded $34.6 million in damages in patent infringement case against Lutron Electronics
South Carolina company GeigTech East Bay, a maker of modern window shades, has been awarded $34.6 million dollar in damages by a New York Federal jury in a case against Lutron Electronics Co. for infringing upon a window shade patent obtained by Greenville patent attorney Douglas Kim for GeigTech East Bay.
The case involved GeigTech’s U.S. patent No. 10,294,717, for a “shade bracket with concealed wiring,” which was obtained by registered patent attorney Douglas Kim of Kim, Lahey & Killough law firm and granted on 05/21/2019.
With patent in hand, Geigtech East Bay, LLC filed a federal patent infringement complaint (with trade dress allegations) against Lutron Electronics Co., Inc. alleging that, among other things, patent infringement and trade dress infringement. One of the tactics used by Lutron was to try to invalidate the patent. However, the patent written by Kim withstood two challenges in the United States Patent Trial and Appeal Board as well as in the jury trial which concluded last week. On March 12, 2024, the jury returned a verdict stating that Lutron had infringed on GeigTech’s ‘717 patent on window shade brackets and awarded $34.6 in damages.
According to the jury verdict form filed March 15th, when asked “Has GeigTech shown by a preponderance of evidence that any portion of the accused statement is true?” the form is marked “Yes” with a notation that “Lutron opted to poach (GeigTech’s) patented designs and intellectual property to try and remain competitive in a segment of the market that (GeigTech) cornered.”
As the finding of infringement was willful, GeigTech can ask the judge to triple the damages.
“This verdict underscores the importance of protecting intellectual property rights for businesses of all sizes,” commented attorney Kim. “We are thrilled that this patent has withstood numerous challenges, scrutiny and legal maneuvers and that our client has emerged victorious.”
The case was tried by Gary Sorden and his trial team in the firm Cole Schotz P.C.
Lutron was represented by Scott W. Breedlove Carter Arnett PLLC and his defense team.
The patent was originally filed by Richard J. McKenna of Foley & Lardner LLP and taken over by Douglas Kim of the Kim Lahey & Killough Law Firm.
Founded in Charleston, SC in 2011, James Geiger designed a revolutionary shading system: a window shade system with no visible wires or screws. His shading systems company J Geiger is known for its high-tech, minimalist, clean and modern shading systems, His business, J Geiger, provides superior shading systems to both high end home and commercial properties. J Geiger products have been featured in numerous publications including Forbes, dwell, The Architect’s Newspaper, Window Fashion Vision, This Old House, Gray, Aspen Peak, and BD West, where their products won Best in Show in 2019. For more information visit https://jgeigershading.com/ .
Kim, Lahey & Killough founding attorney Doug Kim began his professional career as a computer programmer and software engineer after his graduation from Davidson College. His intellectual property career began in 1998 when he combined his business experience with his legal education and was involved with enforcing a client’s patent against multiple infringers. Kim has created a well-rounded Intellectual property practice that provides client centric legal solutions and strategies tailored to each client from multinational corporations to start-ups.
With offices in Greenville and Charleston, SC and Brevard, NC, the Kim, Lahey & Killough Law Firm is devoted to helping clients achieve their business goals and establish, enforce, and leverage their intellectual property rights from the Upstate, to the Lowcountry to across the globe.
by Kim, Lahey & Killough Law FirmNew DOL Rule Independent Contractor Classifications
New Department Of Labor Rule in Effect March 11 Affects Employee/Independent Contractor Classifications
Businesses relying on independent contractors need to know about the US Department of Labor’s new 6-factor test for determining worker classification under the Fair Labor Standards Act. This test narrows who is an “independent contractor,” and goes into effect March 11, 2024.
Key Changes in Worker Classification: New 6 Factor Test Used In Determining Worker Status. Factors considered:
- Opportunity for profit or loss depending on managerial skill;
- Investments by the worker and the potential employer;
- Degree of permanence of the work relationship;
- Nature and degree of control;
- Extent to which the work performed is an integral part of the potential employer’s business; and
- Skill and initiative.
DOL says these factors aren’t exhaustive. Instead, the analysis uses a totality-of-the-circumstances “economic reality” approach, allowing consideration of other relevant factors that “in some way indicate whether the worker is in business for themself.” Where the worker is dependent on the employer for work, they will not qualify as an independent contractor under this rule. Importantly, only the courts, federal and state agencies decide classification, not the employer or the worker.
Diverse Classification Standards:
Notably, this rule solely addresses DOL’s interpretation under the FLSA and does not supersede other law, such as state “ABC Tests,” IRS interpretations of common law, etc.
Serious Consequences for Misclassifying Workers:
- Owing double the worker’s damages
- Paying the other side’s attorney’s fees and costs
- Individual liability: individuals with a hand in misclassification aren’t shielded by the corporation; and
- To the extent a settlement is reached, the agreement itself—and the amounts paid—is public information.
- Not including IRS and/or DOL penalties.
What Employers Should Do Now:
- Review existing and future independent contractor arrangements against the new framework.
- Consider conducting a worker classification audit using the updated criteria.
- Explore the IRS Voluntary Classification Settlement Program (VCSP) with guidance from a CPA.
- Seek legal advice to understand the implications and ensure compliance.
If you would like for us to assist you in navigating the complexities of worker classification, please contact attorney Casey Martens at cmartens@kimandlahey.com or 864.973.6688.