Jackie Krantz – Business Law Section

Barrister Banter: Melissa Jaffe

The purpose of the series is to bridge the gap between junior and senior business lawyers in Oregon, fostering understanding and camaraderie. For this article, we interviewed Melissa Jaffe, the owner and principal attorney of the Law Offices of Melissa B. Jaffe, PC and a member of the Business Law Section Executive Committee. Read on to learn more about her path to law, her practice, and her advice for junior and senior lawyers.

Tell me about your path to being a lawyer. What inspired you to pursue this career?

I worked at a club in college called the 9:30 Club in Washington, DC. At the time, I mostly did it for the free concerts, but witnessing the amount of behind-the-scenes work that went into each production was inspiring. Eventually I was tasked with reading and even redlining contracts, and I was hooked—I knew I wanted to be a transactional lawyer. I was able to problem-solve, be creative, and interpret different perspectives from different stakeholders, and I was responsible for making sure all the details were tracked and executed. If there was a disagreement, I was routinely called upon to mediate. It was fast-paced, detailed, and incredibly satisfying to witness how many lives were impacted with each event.

What is your practice area?

I am a transactional business lawyer with a focus on intellectual property and privacy law. My skill set is called upon regarding artists, producers, entrepreneurs, new business technology (such as cryptocurrency), and new endeavors of all kinds.

How long have you been in your current role?

I became a lawyer nearly twenty years ago. I have owned my own practice for the last seventeen years.

How have you seen the practice change since you started practicing?

Technology has changed everything in my practice. I literally think everything has been updated—my staff is all remote, I use AI to assist with scheduling and managing calendars across different time zones, and all my clients have some internet component, which has caused privacy issues to increase exponentially. From a business ownership perspective, when I started my practice, I would use Yellow Pages ads. Now I have marketing strategy sessions that include social media, apps, and video presentations. I own a multi-jurisdictional practice; I’m licensed in CA, OR, and WA and will sit for the HI bar shortly. Almost all my meetings are remote through Teams or Zoom.

What do you wish you had known before you started working as a new lawyer?

I really wish I would have invested in a joint MBA/JD. Running your own firm is so much more than just billing and emails. There are aspects of accounting, management, marketing and PR, and feeling responsible for staff that add additional layers of stress I wasn’t necessarily prepared to encounter. Luckily, I enjoy learning and was able to grow along with my practice. Honestly, I remember thinking I was finished with classwork once I graduated from law school, but it turned out I wasn’t, not by a long shot!

What are your career highlights?

There have been so many. When I started my career in Portland, I would give free talks to artists on the basics of intellectual property. About ten years later, I was called on to write a brief on copyright law in a very high-stakes litigation. Based on my talk, the artist was able to deftly negotiate a derivative rights clause to his contract that ultimately won him a lot of money. I think the particular nuance escaped many of the corporate lawyers when drafting the agreement. He contacted me after the judgment was rendered to thank me. I truly changed his life for the better. That was very gratifying.

Another person who joined my office as an assistant went on to run her own incredibly successful creative business. We are still in touch, and I know many of her business decisions were based on the talks we had had years prior.

When I am able to get my clients, staff, or audience members to understand the importance of legal theories or intellectual property issues—when I see the light bulb turn on—that is intensely gratifying for me.

What is your favorite part of the job?

My favorite part of my job is making the world a better place for my colleagues, clients, and their clients. There is such an impact we get to make, and I believe it’s an impact that deeply enriches others in the long term. Watching business grow, multiply, and even sell has a certain magic to it. It is an honor to assist clients turn an idea or a small venture into something that can support their families and even generations into the future.

What parts of the job do you wish you could outsource to AI?

I am learning to love marketing. Promoting myself and my business is a tough thing for me because my name is also my law firm name. As a solo practitioner it can feel uncomfortable to talk about myself. At times, I wish I could avoid it entirely and hand it off to AI.

What advice would you give a new business lawyer?

My biggest advice to new business lawyers is to turn your devices off while with family, especially if you have children. I understand we are a competitive group, but it makes a big difference for mental and ultimately physical wellness to just be present with loved ones.

My second piece of advice is to engage in service. My community service through the Business Law Section, Intellectual Property Law Section, Oregon Women Lawyers, House of Delegates of the Oregon State Bar, and state bar taskforces has allowed me to meet others who are passionate about the practice of law. The pro bono work I’m engaged in is some of the most impactful.

What advice would you give a senior lawyer who is charged with mentoring a new lawyer?

I recommend senior lawyers remain vulnerable and open with their mentees. I have made great friendships with my mentees and discovered some pretty serious circumstances that truly needed attention. I’m grateful I was able to help in sometimes profound ways. Other times, just remaining available means a lot to a brand-new lawyer.

The Lawyer’s Role in the Pac-12 Rebuild

Tim Crippen, Black Helterline LLP

Disputes in 2023 arising out of ten members’ departure from the Pac-12 illustrated the ways a business attorney can augment a litigation team in complex disputes. In 2023, Oregon State University (OSU) retained my firm, Black Helterline LLP, and me to serve as business counsel, augmenting the team at the OSU Office of General Counsel. OSU also retained special litigation counsel Keker, Van Nest & Peters LLP of San Francisco. I was effectively embedded with OSU’s Office of General Counsel for a number of months, providing a variety of business legal services as these disputes played out.

The background of the case is well-known to college sports fans but may be unfamiliar to others. The Pac-12 is an NCAA Division 1 college athletics conference founded over a hundred years ago. Until August 1, 2024, members had for decades included OSU, Washington State University (WSU), University of Oregon (UO), and University of Washington (UW) among other premier western U.S. athletics programs.

College athletics conferences provide competitive opportunities for college student-athletes in numerous sports by coordinating competition among their members. As businesses, the conferences typically acquire member universities’ media rights and license them to media partners such as Fox, ESPN, CBS, or the CW Network. The premier conferences’ media rights will sell for hundreds of millions of dollars, or more, per year and are usually licensed under multi-year contracts. The conferences also make money from the NCAA based on their members’ performance in men’s and women’s college basketball tournaments in March and from the College Football Playoff (CFP). For the Pac-12, its longstanding relationship with the Rose Bowl is another source of revenue. The conferences’ net revenues are distributed to the member schools, and the schools use those distributions as major sources of funding for their athletic departments.

In exchange for the schools’ grant of media rights, the conferences provide numerous services to member schools, including coordination of competitions and championships for multiple sports as well as support for student-athlete mental and physical health and growth. In the Pac-12’s case, the conference also operated the Pac-12 Networks and produced media content from all of the member schools. (Until 2024, the Pac-12 employed nearly two hundred people.)

The Pac-12 is an unincorporated nonprofit association under California law. The Pac-12 is governed by the terms of the Pac-12 Handbook, which includes its Constitution and Bylaws. The business of the Pac-12 is governed by the Pac-12 Board of Directors, which, prior to the departure announcements, consisted of the president or chancellor of every member institution.

In 2022, UCLA and USC announced they would leave the Pac-12 and join the Big Ten conference in the summer of 2024. After they announced their departure, they were excluded from Pac-12 board meetings and votes. None of the parties exactly went to the mat on figuring out their precise status as members who had announced departure, but they were generally excluded, including from numerous discussions in 2023 concerning the Pac-12’s next media rights deal.

Numerous factors could have driven UCLA and USC to leave the Pac-12 but ultimately, one can infer that they made the decision to leave because they expected to make more money in another conference. And presumably they believed more money would help them stay competitive or improve the strength of their athletic programs, which ultimately should inure to the benefit of their student-athletes and the universities at large.

On July 27, 2023, the University of Colorado announced its intention to depart the Pac-12 for the Big 12. Then, on August 4, 2023, in a bombshell, just as Pac-12 members believed they were about to sign a new multi-year media deal, UO, UW, and three other universities announced they would leave for the Big Ten and Big 12 conferences.

That left the Pac-12 with OSU, WSU, UC Berkeley (Cal), and Stanford University (Stanford). Cal and Stanford elected to join the Atlantic Coast Conference and announced as much on September 1, 2023.

On August 29, 2023, two days before Cal and Stanford announced their departure, the Pac-12 commissioner called a board meeting for September 13, 2023, and intended to include all twelve members—including those who had announced plans to withdraw—to discuss an employee retention plan and go-forward governance approach.

As with many types of business organizations, board control is a major fulcrum on which power is balanced. In the Pac-12’s case, allocation of the hundreds of millions of dollars of revenue the conference would receive, and even the continuation or dissolution of the conference, could have been on the table. Had the conference member institutions voted to dissolve effective August 1, 2024, when the ten members departed, OSU and WSU would have found themselves scrambling to find a conference to join—or would be independently scheduling hundreds of sporting events—for the 2024–2025 academic year, with perhaps none of the revenue usually derived from the Pac-12 to support their athletic programs.

On September 8, 2023, OSU and WSU filed a Complaint and Motion for Temporary Restraining Order (TRO) in Whitman County Superior Court in Washington, the home of WSU. The TRO requested, in effect, that the Court prohibit the Pac-12 from holding a board meeting that included, or permitted the votes of, the departing ten member schools’ presidents and chancellors. The Bylaws provided that if a member delivers a notice of withdrawal prior to August 1, 2024, “the member’s representative to the Pac-12 Board of Directors automatically shall cease to be a member of the Pac-12 Board of Directors and shall cease to have the right to vote on any matter.” (Complaint for Breach of Bylaws, Declaratory Judgment, and Injunctive Relief.)

The departing ten members had arguments against the plain interpretation of this language espoused by OSU and WSU, but the Bylaws plus the precedent that UCLA and USC had been excluded since their announcement, allowed OSU and WSU to prevail. The matter was appealed to the Washington Supreme Court, which denied review, letting the trial court’s grant of a preliminary injunction stand. The matter was settled in principle in December 2023 and a final settlement agreement was inked in March 2024. Among other things, the departing members left the conference intact with OSU and WSU as its sole members and left funds in the conference (including future expected revenues) for OSU and WSU to use to rebuild and support their athletics programs as they set the course for their futures.

As a business lawyer embedded in a project like this, skills from other types of business work become useful. This was a membership dispute over control of a business; it resolved, as they often do, in a deal that resembled a buyout. In any buyout transaction, the value of the target needs to be ascertained, which involves legal due diligence.

In the case of the Pac-12, many key contracts are significant sources of value for the conference and its members. For example, the Pac-12’s relationships with the Rose Bowl and the CFP provide significant revenue. Because the member universities were mostly public bodies, however, and therefore subject to public records laws, many of these highly sensitive and confidential contracts were never previously put into the possession of the member universities out of reasonable concern that providing them to the universities would make them subject to public disclosure, which could undermine the conference’s negotiation positioning in the future and potentially violate confidentiality provisions in these agreements. Said another way, the members had never seen the Rose Bowl or CFP contracts, which is a customary practice amongst conferences in college sports. As part of informal discovery in the dispute, we reviewed a number of these contracts to verify our understanding of the obligations of the parties and the benefits that the conference could expect from them.

The control dispute related to a unique business type: the California unincorporated association. Case law on fiduciary duties for these types of organizations is limited. Whether members owe each other fiduciary duties and the extent of any such duties, of course, were on the parties’ minds. Being able to draw analogies from and research other fiduciary duties in closely held business entities helped analyze these issues.

Likewise, the economics of the conference are somewhat like a cooperative or even more so like a law firm or other professional services firm. Familiarity with these types of business helped client and counsel understand the business model quickly, which helped with valuation, among other issues.

Broad dealmaking experience also came into play in numerous ways. The Settlement Agreement among the Pac-12, the ten departing members, OSU, and WSU involved control of the organization but also a compromise where OSU and WSU would allow the departing members to have a vote on certain matters. Additionally, allocation of future revenue, responsibility for conference liabilities, and responsibility for allocation of intellectual property assets were decided. These types of issues are constantly at play in business break-up, buyout, and merger and acquisition deals, and the experience of a business lawyer can help expedite negotiations.

Likewise, there were ancillary deals to be made while OSU and WSU were in control of the Pac-12, including scheduling competitions for the two conference members for the 2024–2025 and 2025–2026 seasons. Because these needed to be negotiated while in active litigation against the Pac-12 and departing schools, OSU and WSU counsel took the lead in negotiating these deals with third parties but obtained conference support and buy-in when needed.

Not every case will call for a multi-attorney team and other experts, but even a smaller case involving business interests could benefit from the experiences of a business transactions lawyer familiar with legal due diligence, business entities and fiduciary duties, and contract drafting and negotiation.

The Pac-12 has recently announced that, effective July 1, 2026—at the expiration of a two-year NCAA grace period allowing OSU and WSU to operate a conference with only two members—San Diego State University, Colorado State University, Boise State University, Fresno State University, Utah State University, and Gonzaga University have agreed to join the conference. A new era for OSU, WSU, and the Pac-12 begins. ♦

Buying and Selling a Business: What to Prepare For

Erich Merrill, Miller Nash LLP and Justin Monahan, Otak

The overall volume and valuations in merger and acquisition activity in the U.S. have increased in 2024 from some lower activity in 2022 and 2023. We have seen industry publications reporting that in the architecture and engineering industry, for example, target firms are achieving valuations at EBITDA multiples of 11.4x, 13.8x, and higher—well above historical medians in the 6x–7x range. Mergers and acquisitions that generate inorganic growth remain a key maneuver for firms looking to incorporate specific resources from smaller firms, augment specific capabilities, scale new growth platforms through geographic and capability expansion, and in some cases transform both firms by reshaping service offerings with transactions of scale. In this article, we are going to review several issues that have been significant deal and drafting points in recent transactions to flag approaches for buyers and sellers alike.

Considerations for potential buyers

We will begin by looking at preparations for a potential acquisition from the perspective of potential buyers.

Intellectual property

Based on transactions with which the authors have recently been involved, intellectual property of the target business continues to be of major interest to buyers. Buyers typically are looking for one of two opportunities in an acquisition: the ability to extend an already successful or potentially successful business platform into a new area or onto a larger scale, or the addition of operations that expand the sectors in which the buyer’s business operates. In each case, obtaining the ability to offer a product or service that others cannot is a key factor to a successful acquisition.

Intellectual property can provide this exclusivity. Buyers should spend significant time reviewing intellectual property assets of the seller’s operations in the due diligence phase of acquisitions. Diligence should go well beyond confirming that the seller holds patents, registered trademarks, or trade secrets that appear to offer value to the buyer. Buyers need to verify that key employees have assigned rights to the seller, that trade secrets have been protected in practice, and that third parties do not hold patents or other intellectual property rights that pose a risk of infringement claims against the seller (and, after the transaction, against the buyer). In addition, buyers need to assess the degree of competitive protection actually provided by the intellectual property held by the seller. Analysis of patent scope and possible invalidity are critical as part of the diligence process.

Non-competition agreements between parties and with employees

Much has been written about the FTC’s April 23, 2024, rule potentially affecting non-compete agreements. (See the most recent coverage from the Oregon Business Lawyer in this issue’s article, “Federal Trade Commission Non-Compete Ban: December 2024 Update.”) However, that rule is in limbo following the August 20, 2024, ruling by Judge Ada Brown of the Northern District of Texas that blocked it, pending potential appeal. At the state level, ORS 653.295 and applicable case law have set criteria for the enforceability of non-compete agreements between employers and employees. It is generally clear that non-competes are permissible in the bona fide sale of a business. These are important tools for acquiring firms: target firms may have valuable relationships with clients, customers, suppliers, and subconsultants. The economic benefit of a successful transaction generally provides reasonable consideration to make an owner’s non-competes enforceable. There are additional requirements on non-competes under state law which are worthy of addressing in a future article; anyone needing guidance on this should seek experienced transaction counsel.

In the context of professional services, protection against seller competition may also take the form of non-solicitation provisions for clients and staff. When considering mid-level management, federal and state rules are trending toward invalidating and limiting non-competes. Non-solicitation agreements may continue to be enforceable, although there are circumstances where certain clients may effectively hold a “monopoly” over a business sector, and affected employees may argue that a non-solicitation agreement is effectively a non-compete that frustrates their ability to earn a living. This may be true of, for example, certain government clients such as Departments of Transportation that simply govern an entire field of work. In these cases, counsel should pay careful attention to other restrictive details, such as the duration of the non-solicitation following an employee’s exit, to improve the likelihood that a court might enforce the agreement.

Larger deals: HSR reporting and clearance—new FTC rules

Buyers in larger transactions need to consider whether a filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 will be required. When such a filing is required, both parties must spend significant time and money gathering and submitting detailed information about their operations, the proposed transaction, competitive overlap, the market in which the companies compete, and other required information. The parties submit the required information and must then wait for agency review and clearance to proceed. Not only can the process significantly delay the transaction, but the filing fees alone constitute a major expense.

The Federal Trade Commission recently adopted a final rule, which is estimated to triple the time and effort needed to complete the required filings. The good news is that filings are generally not required for transactions having a value of less than $119.5 million. If you are involved with a transaction above that amount, it is always wise to consult with experienced counsel who can help guide you through the HSR process.

Diligence process

Once some basic concepts and intents begin to be shared and agreed between the parties, due diligence can begin in earnest. The overall assessment of strengths and weaknesses of a business or business line will take many forms: financial condition, succession planning, contract rights and restrictions, and intellectual property that will be part of the deal all need to be evaluated.

A critical piece of due diligence will be the risk assessment associated with potential claims against the target that the buyer will need to evaluate. These include employment-related claims, tax underpayment/reporting, participation in multi-employer pension/welfare plans, and claims related to privacy and data security. The risk profile of each business will be different, and subject matter experts should be used within given market sectors to inform the decision making of the buyer. Although parties this far along in the process may be less and less likely to find true “no-go” risks, the sum of risks and items requiring workouts and attention may start to affect the deal valuation. If the buyer is interested in the transaction because they are picking up a piece of intellectual property or a specific customer base, the due diligence process may become particularly focused. A broad acquisition of a large performing firm, on the other hand, may span out across a broad range of potential topics and risks.

For any transaction to be successful—something the parties look back on after the dust settles to see the acquired assets performing well in the context of the buyer’s business—it is critical that risks are assessed and valued appropriately at this stage of the process. Most practitioners will maintain a detailed log and checklist of items that will be evaluated as part of their process.

Considerations for potential sellers

The process of selling a business is frequently completely new to sellers. We list below several key considerations that sellers should be aware of when preparing to sell a business.

Orderly records; due diligence production

Although orderly records by themselves may not define the success or failure of a transaction, it is wise for sellers to insulate themselves from claims by having orderly records that support the buyer’s due diligence. If there are unwelcome surprises for the buyer after due diligence, a buyer may insist that the very format of the due diligence production from the target thwarted proper due diligence and that the buyer is entitled to (a) a reduction of the purchase price prior to closing or (b) a remedy or indemnification after closing. Attractive acquisition targets can also demonstrate orderly record-keeping and the consistent use of best practices throughout their business.

Protection of intellectual property

As noted above, patents, strong trademarks, and trade secrets are usually ascribed significant value by buyers. Sellers considering a business sale should therefore spend the time and resources to ensure that any intellectual property they may have is appropriately protected and documented.

Potential sellers should expect that buyers will require extensive warranties regarding intellectual property in the acquisition agreement. These warranties virtually always place the risk of infringement claims on the seller. Potential sellers should therefore obtain freedom-to-operate opinions or other advice from intellectual property counsel to assure themselves that infringement risk is minimized or can be accurately disclosed to the extent it exists.

Sellers sometimes believe that it is helpful to obtain a valuation of their intellectual property assets. Our experience is that such valuations do not facilitate the sale of the business and are not worth obtaining. Most buyers put little stock in valuations of intellectual property. Their lack of faith in valuations appears to be well placed. With the exception of valuations of patents or other intellectual property that has a history of earning royalties, valuations of intellectual property vary widely, appear to have little correlation to business advantage, and are often highly speculative.

Transition process during and after sale

Attractive acquisition targets can demonstrate a focus on succession and transition planning within their organizations. Too often, acquiring firms find themselves disappointed when they pay significant amounts to current company leaders, only to find those leaders promptly transitioning out of the company business and handing the reins, along with all the accompanying learning curves, to emerging leaders.

Another thing an acquiring firm does not want is to be the savior to a company whose leadership is looking to exit amid a floundering, late-stage effort. Rather, attractive acquisition targets can demonstrate both immediate and durable value-add propositions for acquiring firms that mirror the motivations of the acquiring firms in the first place: adding specific capabilities while giving the target firm access to broader platforms and resources. There are many transition-planning strategies available to companies wishing to make themselves attractive targets, which we may explore further in a subsequent article.

Earnout terms

Frequently, sellers and buyers resolve disagreement over acquisition price by agreeing that part of the price will be paid after closing based on how the business performs—commonly called an “earn-out.” Sellers can find earn-outs attractive because they potentially increase the purchase price.

Sellers should know several things about earn-outs. First, the buyer, not the seller, will be in control of the business after closing, which is the period during which performance of the business will be measured for the earn-out. Second, it is critical that the earn-out criteria be carefully and completely defined in the purchase agreement. Close coordination between the seller’s financial teams and legal teams is critical in this regard to avoid disagreements over whether an earn-out has been earned and how much the seller is entitled to receive. Third, sellers need to assess whether they will continue to work for the buyer for the time that is often required in order to earn the earn-out. We often see sellers decide that they are ready to move on, leave the business before the end of the earn-out period, and negotiate a compromise amount to be paid rather than the full potential earn-out.

Rollover equity—liquidity; control over the process

Buyers will often insist that sellers take part of the purchase price in the form of stock issued by the buyer, rather than being paid the entire purchase price in cash. Sellers need to consider these facts when faced with such an offer:

Unless publicly traded, stock in the buyer is not liquid. Sellers must consider whether they are willing to hold the buyer’s stock indefinitely, without the ability to convert it to cash, or what alternative exit mechanisms may be available under the relevant stock plan.
A seller willing to take buyer’s stock as part payment of the purchase price should usually negotiate a right to require the buyer to purchase the stock from the seller on a future date. Such a right will often involve a formula price since there is no market price for the buyer’s stock. Sellers should make sure that the formula is reasonably predictable and verifiable, and that the seller retains a reasonable right to challenge a calculated price that the seller believes to be incorrect.
As with an earn-out, sellers who agree to take buyer stock as part of the purchase price should attempt to negotiate some degree of control over the buyer’s operations post-closing. For example, the buyer should not be able to sell key components of its business or incur unreasonable levels of debt without the seller’s consent.
A seller willing to take buyer’s stock as partial consideration should also insist that a tag-along clause be included in the acquisition documents. This clause gives the seller a right to sell a proportional amount of stock, if the buyer’s major shareholders in the future sell a significant portion of their stock to a third party. A buyer will likely impose a companion clause—the drag-along clause—on the seller, so that the buyer is able to require that the seller sell stock if the buyer or its major shareholders want to sell the whole company.

Areas of focus for buyers

As mentioned above in the discussion of the due diligence process, buyers are likely to spend significant time on evaluating possible employment-related claims, tax underpayment/reporting, participation in multi-employer pension/welfare plans, and claims related to privacy and data security. Sellers should keep these areas in mind well prior to a proposed sale of the business and adopt business practices meant to minimize the potential for claims or liability in these areas. In recent transactions the authors have handled, some of the most contentious negotiations of transaction terms have focused on these areas.

Involving an investment banker/broker

Sellers should give serious consideration to retaining an investment banker or business broker to assist with the sale of their business. Potential sellers are sometimes tempted to sell their businesses on their own, wanting to avoid the expense of a banker’s or broker’s commission.

Our experience is that retaining a skilled business broker or banker is worth the expense. These professionals typically bring a larger number of potential buyers to the table, resulting in a higher price for the business. In addition, we have been involved in numerous acquisitions where a skilled banker or broker is able to effectively act as a mediator when the parties seem unable to agree on a crucial transaction term. In these situations, the deal often proceeds toward closing with the help of the broker or banker’s shuttle diplomacy to keep the parties at the bargaining table and resolve the key issue.

Involving M&A counsel

As with retaining a business broker or investment banker, potential sellers sometimes question the benefit of hiring counsel experienced in merger and acquisition transactions. Just as physicians have different specialties, attorneys have varying levels of expertise in different areas of law and business. Counsel that has served well for routine contract, corporate, and litigation matters may or may not also have the experience to provide efficient representation for a sale of the client’s business. Potential sellers should consider contacting and interviewing counsel with significant merger and acquisition experience. Such counsel can work in full cooperation with existing company general counsel, if requested to do so, so that the background knowledge and experience of the company’s general counsel is available for the seller’s benefit in the sale transaction.

Conclusion

Signs suggest that mergers and acquisitions will continue at a significant pace in 2025 and beyond. As is clear from the issues raised in this article, the topic touches many different areas of the law, implicating intellectual property, employment law, corporate law, and regulatory schemes. Careful preparation before an acquisition occurs will be beneficial to both buyers and sellers in the transaction and the operation of the ongoing business.

Federal Trade Commission Non-Compete Ban: December 2024 Update

Tim Resch, Samuels Yoelin Kantor LLP

In August, the U.S. District Court for the Northern District of Texas struck down the FTC’s non-compete agreement ban nationally in Ryan, LLC v. Federal Trade Commission. In the ruling, the court held that the FTC exceeded their statutory authority and that the Administrative Procedure Act (APA) required that the regulations be found unlawful and set aside. The original rule banning non-compete agreements was scheduled to become effective September 4, 2024. The FTC will be appealing the District Court’s ruling in the U.S. Court of Appeals for the Fifth Circuit. Opponents of the rule view the Fifth Circuit as a favorable venue, and this question may eventually end up at the U.S. Supreme Court.

The FTC is also appealing a preliminary injunction from the U.S. District Court for the Middle District of Florida in Properties of the Villages, Inc. v. Federal Trade Commission. The court held in that case that the new rule is likely barred by the major questions doctrine, which requires clear congressional authorization for agency actions with extraordinary economic and political significance. The major questions doctrine fits squarely into the recent shift away from Chevron deference and further limits government agencies acting without explicit congressional approval. The court did not, however, find that the Administrative Procedure Act barred the rule from taking effect and it has not gone so far as to enjoin the rule nationally. The FTC has appealed to the Eleventh Circuit, and briefing is progressing in that appeal.

In contrast to the courts’ decisions in Properties of the Villages and Ryan, LLC, the U.S. District Court for the Eastern District of Pennsylvania held that neither the APA nor the major questions doctrine were likely to bar the final rule in ATS Tree Services, LLC v. Federal Trade Commission. The court refused to issue a preliminary injunction and ATS Tree Services dropped its challenge to the rule.

It is possible that the issue will eventually make it to the Supreme Court, but as my previous articles have explained, I believe it is unlikely that the rule will ultimately survive. The ATS Tree Services case from the District of Pennsylvania could have increased the likelihood of conflicting rulings and a circuit split, especially if it had been appealed and ultimately affirmed in the Third Circuit. Of course, it is possible that further litigation could create a conflict between circuit courts of appeals. Given the results of the November presidential election, President-Elect Trump will nominate a new chair of the FTC in January 2025. A new chair could withdraw the pending appeals, and the non-compete rule would never come into effect. ♦

Barrister Banter: Joe Cerne

This is the first installment of the Business Law Section’s “Barrister Banter” series. The purpose of the series is to bridge the gap between junior and senior business lawyers in Oregon, fostering understanding and camaraderie. For this article, we interviewed Joe Cerne, an associate at Lane Powell and a member of the Business Law Section Executive Committee. Read on to learn more about his journey into law, his favorite parts about his career, and some advice he has for both junior and senior lawyers.

Tell me about your path to being a lawyer. What inspired you to pursue this career?

After graduating from college (University of Puget Sound–go Loggers!), I worked at Boeing in Seattle, Washington. I enjoyed my role there on the supplier management team working with aircraft supplier contracts and assisting with the relationships between Boeing suppliers and airline customers. It was my first real experience with reviewing and discussing legal contracts.

I was not part of the official Boeing legal department, so instead my role was to work with Boeing suppliers and airline customers, looking at many types of disagreements from a practical perspective and find business-first solutions. I enjoyed the creative problem solving and thought that going to law school would be worth the investment so I could continue to work with clients to help find practical solutions to their problems.

What is your practice area?

Primarily corporate, securities, and mergers & acquisitions. I also do a fair amount of work in the startups and venture capital space, as well as some commercial real estate work.

How long have you been in your current role?

I just finished my sixth year with Lane Powell. I was a summer associate in 2017 before I joined full time in the fall of 2018.

How have you seen the practice change since you started practicing?

It feels like we talk a lot about pre-COVID versus post-COVID as a defining period of change—some things changed for the better; some things, maybe not. I think one of the more interesting changes is that a “conference call” is really never a phone call anymore; it’s a video call rather than a true dial-in phone call. I honestly cannot remember the last time I called in to a group conference call line that wasn’t connected to a video platform. I think many clients appreciate the sense of realness that comes with seeing their attorney in front of them.

What do you wish you had known before you started working as a new lawyer?

That my job could be, at times, boiled down to being a professional emailer. As lawyers we are of course much more than professional emailers, but sometimes it really does feel like I should have taken an “Email Management 101” in college because so much of our communications are in emails. With that said, being effective in email communication can really set you apart from other lawyers, and make your client and opposing counsel interactions much more efficient.

What are your career highlights?

I have found it fulfilling to participate in law school and new lawyer mentorship programs. Seeing the development of law students into new attorneys has been rewarding. In particular, seeing summer associates that I’ve worked with and mentored join the firm full time after law school has been a highlight as well. The basic things that more experienced attorneys do every day and take for granted are sometimes the most daunting to law students and new lawyers. The seemingly simple conversations often have the greatest impact on law students and new lawyers. We are all extremely busy, but the positive impact we can have on law students and new lawyers is worth the time investment. I would encourage everyone to make an effort to volunteer their time to support law students and new lawyers.

What is your favorite part of the job?

Seeing the passion that business owners have is really inspiring. Knowing that I get to work with people who care so deeply about their employees and customers, and working hard for them, is one of my favorite parts of this job. The emotion and “off-the-clock” energy that business owners spend to take care of their employees and customers is impressive. There are of course many ways to run a successful business, but one of the common threads seems to be that everyone is passionate about what they do, and passionate about taking care of their employees and customers.

What parts of the job do you wish you could outsource to AI?

Billing my time in six-minute increments. There are all sorts of timers and other tech resources available, but if I could outsource that entire process, including drafting billing narratives, that would be great!

What advice would you give a new business lawyer?

Ask questions. Graduating from law school and entering the practice of law, and particularly transactional business law, can feel overwhelming. It is hard to obtain meaningful exposure to transactional business law topics/concepts in law school. Know that nobody expects you to have experience, and everyone understands you are likely seeing documents and hearing concepts/terminology for the first time. It would be concerning if you didn’t ask questions. But make sure to Google your question first! If nothing else, a few clicks on the internet will help you ask a better/more refined version of your question.

What advice would you give a senior lawyer who is charged with mentoring a new lawyer?

Ask questions. Starting out in the practice of law, particularly for those without lawyers in their family or in their personal lives, can be extremely intimidating. Even if the questions are not on the client-focused topic, the feeling that a senior lawyer cares enough to ask “how are things going” can go a long way toward creating a sense of belonging. Being able to learn more about who someone is, and their experiences that brought them to the practice of law, will not only improve communication long term (and help deliver better results for your client), but it will also help reduce the anxiety and stress that comes along with being new to the profession. ♦

A Corporate Lawyer’s Approach to Transactions between Licensed Professionals

Noah Maurer, Elevate Law Group

One of my early legal mentors in Oregon once remarked humorously, “businesses are, in fact, businesses.” This obvious statement underscores the widespread hesitation about where legal work meets a regulated industry. For Oregon attorneys, traditional corporate work requires an evolving vantage point to account for the unique legal needs of licensed professionals.

Let’s start by defining licensed professionals. Businesses lining our corridors of commerce— such as lawyers, accountants, and dentists—provide easy examples. Specialized professionals ranging from OB/GYNs to psilocybin facilitators have varying degrees of application to our discussion. A common characteristic of all these businesses is the requirement for a license and increased scrutiny under state and federal regulations.

There is no one-size-fits-all approach to working with licensed professionals. Each regulated industry features unique statutes, albeit with common themes. For example, licensed professionals must abide by strict regulations governing ownership, referrals, and confidentiality. Rule 5.4 of Oregon’s Rules of Professional Conduct may initially come to mind, which establishes these requirements for entities practicing law. It should be of no surprise that other licensed professionals are bound by analogous requirements. For instance, ORS 679.020 and ORS 673.160(5)(a)(A) state that dentists and accountants must own their respective practice entities.

Despite the differences among these industries, a common challenge for licensed professionals is the restriction on their ability to transfer and encumber their assets. But these businesses (say it with me) are, in fact, businesses. Often, they are local, family-owned enterprises in our backyard. The Oregonians at the core of these entities should be supported in exploring collaborative opportunities. By tackling their corporate work from an informed perspective, legal specialization can support greater business opportunities for our neighbors.

Private equity is increasingly focusing on the fragmentation within professional services and licensed industries, aiming to consolidate these sectors. Veterinary hospitals, for instance, have been early adopters of this trend. Over the past thirty years, the national marketplace has seen major widescale consolidation of veterinary hospitals, with notable examples like Veterinary Centers of America (VCA) and National Veterinary Associates (NVA) acquiring hundreds of veterinary hospitals across the country. The same consolidation is occurring in other industries with more scrutinous licensure compliance. In 2022, 13 percent of all U.S. dentists were affiliated with a dental service organization. With greater profit comes more complex structures and increased pressure on specialized corporate attorneys.

Simple business transactions become exponentially more difficult through the lens of state and federal regulations. Legal work for licensed professionals demands tailored contract drafting to achieve a client’s goal. From the letter of intent all the way to post-closing, licensed professionals have mandatory considerations that a skilled attorney must carefully consider.

Maintaining licensure and compliant ownership

The key aspect to a licensed professional transaction is ensuring ongoing legal compliance and continuity of license. Any corporate action involving equity or asset ownership by an unlicensed party, or an entity controlled by one, raises significant compliance concerns. In the event that two licensed parties are doing a simple ownership transfer (i.e., dentist to dentist), the risk is mitigated. When corporate entities get involved with unlicensed out-of-state ownership, compliance becomes more complex.

Maintaining continued ownership of regulated property should be easily traceable throughout a corporate event. Licensed professionals may see their businesses split down the middle. On one side sits the unregulated assets, such as real property, certain equipment and inventory, management services, and employment of support staff. On the other side, there are licensed services, regulated assets (such as patient records), and inventory requiring licensure (such as prescribed medication). Differentiating these two categories may allow licensed and unlicensed entities to effectively collaborate, without sacrificing continuity of license, under a “service organization” structure.

New entities may be required to allocate assets, licenses, and services away from the prior practice structure. For sellers contemplating joining a service organization structure, the post-transaction day-to-day operation can be daunting. A transaction of this nature can quickly spill across dozens of specialized documents allocating assets, equity, services, options, employment, and real estate. For purchasers, the question of compliance and continuity can be equally challenging.

At the forefront of this discussion is how these structures may differ across organizations, industries, and even states. The acceleration of consolidation in licensed industries demonstrates that private equity is willing to take on this legal burden. Oregon attorneys need to be prepared to scrutinize these arrangements to confirm that they comply with our unique state ownership requirements and provide appropriate protection for all parties involved.

Transfer mechanics and payment terms

A simple representation and warranty surrounding the maintenance of professional licensure may not be enough to guarantee the viable operation of a licensed professional’s business post-closing. Transactions in certain highly regulated industries frequently run into a “black box” conundrum. In this scenario, the purchaser cannot own the assets or equity in question until given approval by the government on an indeterminate timeline. In other words, the parties have no choice but to rely on a third party to conclude their transaction. This necessarily interjects an unknown variable into the heart of closing. To provide guidance in these scenarios, attorneys need to effectively consider whether parties are properly motivated to cooperate in light of this unavoidable ambiguity.

For licensed professionals selling their practice and joining a new structure, payment may not simply be cash in hand at closing. Payment may take the form of equity ownership in newly formed entities and performance-based earnout payments. As a result, parties must be able to clearly move between various roles—employee, employer, shareholder, lender, debtor, and owner—often within a single transaction. Understanding how each of these roles affects the other is necessary for drafting a workable mechanism and proper economic consideration.

As an important reminder, structural arrangements of this nature lean heavily on a well-drafted letter of intent. Without a usable letter of intent, delineating this arrangement becomes much more burdensome. This is where an experienced attorney and broker in licensed professional transactions can work together to establish workable expectations from the initial stages of communication.

Concerns post-closing

Parties to licensed professional transactions are unlikely to simply call it quits and walk away from one another. Regulations govern a host of ongoing conduct, such as the continued use of the seller’s name and likeness, thereby increasing the need for contractual discussion on the transition of the business post-closing. Combined with the need for client continuity, parties frequently negotiate detailed transition assistance plans, short-term employment or contractor arrangements with the seller individually, and mutually assembled client letters.

Beyond a cooperative transition, the seller may consider compelling the purchaser’s cooperation in evidencing the seller’s past legal compliance. When retention of confidential information is held exclusively by the purchaser, the seller may require the ability to access historical records to answers before their licensing authority.

For medical industries, Anti-Kickback and Stark Law compliance looms over shared practice management decisions between newly affiliated parties. Private equity consolidation frequently comes along with linked networks of practices, creating unique ethical questions over how an individual licensed professional fits into a broader network of shared interests. These considerations are particularly open to change at a federal level.

A combination of legal documents is the unavoidable answer to effectively structure the continuing obligations of the parties. Because of the complexity of the considerations listed above, specialized corporate attorneys have become an important fixture for licensed professionals in all their legal work.

Key takeaways

Representing licensed professionals must be approached from a fundamentally distinct perspective than other business in Oregon. Whether at the beginning, middle, or end of a business’ life cycle, unique questions of compliance must be tactfully assessed. For business transactions involving licensed professionals, confident, tailored language must alleviate the regulatory burden faced by clients. As state and federal governments adjust their approaches to the commentary raised in this article, specialized corporate attorneys must be ready to adapt accordingly. ♦

A New Era: NIL and the Evolution of College Sports

Max Forer, Miller Nash LLP

Since the National Collegiate Athletic Association’s (NCAA) formation in the 1900s, student-athletes have been barred from profiting off their own name, image, and likeness (NIL). That prohibition stood for over a century, but on July 1, 2021, the NCAA introduced new bylaws, allowing for student-athletes to (a) profit from their own NIL through endorsement agreements and business ventures and (b) hire professional representation to facilitate such activity. In turn, high school associations around the country have also begun changing their rules to mirror the NCAA’s new approach, allowing high school athletes to profit from their own NIL as well.

These changes, along with new state laws, have opened an estimated $14 billion marketplace. But NIL deals are not one-size-fits-all; traditional deals used for professional athletes may not work for student-athletes, and NIL deals must conform to multiple NCAA, state laws, and institutional standards. NIL agreements are still governed by several rules, requiring careful consideration to protect brands, students, and schools alike. In this article, we discuss the legal history behind these recent changes, the laws and rules that apply to NIL deals, practical guidance on NIL deals for Oregon lawyers, and best practices for NIL deals generally.

Case and legislation history of NCAA and NIL

One of the initial cases central to the history of the NCAA and NIL is NCAA v. Board of Regents of the University of Oklahoma, 468 U.S. 85 (1984), which challenged the NCAA’s constraints on colleges negotiating directly with television channels ABC and CBS. The court ruled that the NCAA’s restrictions violated the Sherman Act, effectively releasing television rights to individual athletic conferences. Although the court ruled against the NCAA, Justice Stevens noted that the NCAA played a critical role in maintaining amateurism in college sports, suggesting that antitrust deference or immunity was required to uphold this revered tradition.

Fast-forward about thirty years to O’Bannon v. NCAA, 802 F.3d 1049 (9th Cir. 2015), where former UCLA basketball player Ed O’Bannon challenged the NCAA’s use of student-athletes’ images for commercial purposes without compensation. The Ninth Circuit held that antitrust laws applied to NCAA rules, but that restricting compensation had pro-competitive effects in integrating academics with athletics and promoting amateurism. The court ultimately found that raising the cap on compensation to the full amount of the costs of attending college was a substantially less restrictive alternative means of accomplishing this pro-competitive purpose.

After these rulings, the action shifted to state legislatures. In September 2019, California passed the Fair Pay to Play Act, Cal Educ. Code § 67456, allowing student-athletes to hire agents and profit from their NIL. This legislation sparked similar legislative efforts in multiple states, pressuring the NCAA to respond. Florida was next to pass an NIL law in June 2020 that would become effective July 1, 2021. This accelerated the NCAA’s timeline to act and led over twenty states to enact NIL legislation prior to July 1, 2021, ensuring that their student-athletes could also benefit from NIL activity and keeping up with what would be an obvious recruiting advantage.

Meanwhile, NCAA v. Alston, 594 U.S. 69 (2021), reached the U.S. Supreme Court and was decided on June 21, 2021. In Alston, Division 1 student-athletes argued that the NCAA’s restrictions on non-cash education-related benefits violated antitrust laws. The court agreed that the NCAA’s distinction as an amateur product was a pro-competitive defense to antitrust law since it offered wider consumer choice beyond professional sports, but the court ultimately ruled in favor of the plaintiffs, finding that reasonable adjustments to education-related benefits as detailed in the district court’s injunction would not undermine the NCAA’s amateurism. This ruling led to a more expansive package of education-related benefits available to student-athletes today, including graduate school scholarships, postgraduate internships, study abroad programs, computers, tutoring services, and cash awards for academic achievement limited to $5,980 per year, referred to now as “Alston awards.” While the court’s ruling narrowly addressed restrictions on education-related benefits, Justice Kavanaugh’s concurring opinion seemed to challenge the restriction of other forms of student-athlete compensation and also raise serious questions under the antitrust laws under this amateurism defense, asserting in the last line of his opinion, “The NCAA is not above the law.”

Soon thereafter, the NCAA passed interim NIL rules and policies allowing NIL activity, effective July 1, 2021. Although often mistaken as permitting NIL activities due to the timing of subsequent regulation reform, the holding in Alston only invalidated NCAA restrictions on education-related benefits; the Supreme Court has yet to address the NIL issue itself. Nonetheless, the Alston ruling, combined with new state NIL laws, pushed the NCAA to proactively adopt a more permissive approach to NIL activity in place of existing restrictions.

The NCAA has faced a myriad of other litigation since its NIL rules went into effect, many of which haven’t gone in the NCAA’s favor. In Tennessee v. NCAA, No. 3:24-CV-00033, 2024 U.S. Dist LEXIS 32050 (E.D. Tenn. Feb. 23, 2024)[1], the court issued a preliminary injunction, barring the NCAA from enforcing its rules against third-party companies contacting student-athletes during the recruitment stage. The court’s decision temporarily allows for student-athletes to negotiate and enter NIL deals prior to committing to a university. Recently, in Johnson et. al. v. NCAA, No. 22-1223, 2024 U.S. App. LEXIS 16953 (3rd Cir. 2024), the Third Circuit addressed whether student-athletes’ amateur status precludes them from bringing a claim under the Fair Labor Standards Act (FLSA), holding that student-athletes may bring such a claim and offering a new test[2] for the district court to apply in assessing whether they are in fact FLSA employees.

The NCAA’s rules further evolved in Ohio et al. v. NCAA, No. 1:23-cv-100, 2023 U.S. Dist LEXIS 225837 (N.D. W. Va. Jan. 19, 2023), where seven plaintiff states sought a preliminary injunction against the NCAA’s enforcement of a transfer rule requiring student-athletes transferring between Division 1 schools to wait a year before competing in games. The court granted the preliminary injunction, agreeing that the rule was an unreasonable restraint of trade in violation of §1 of the Sherman Act. After the U.S. Department of Justice joined the suit in January, the NCAA and DOJ reached a settlement that permanently bars the NCAA from restricting transfer eligibility. Additionally, the NCAA and its Power Five member conferences have tentatively agreed to a landmark settlement in House v. NCAA, Nos. 4:20-cv-03919 CW; 4:20-cv-04527 CW, 2021 U.S. Dist. LEXIS 206712 (N.D. Cal. Feb. 25, 2021). This settlement awards $2.8 billion in back damages to current and former student-athletes dating back to 2016, and it establishes an NIL payment system by which schools can pay up to 22 percent of their average athletic department revenues to current student-athletes for their NIL pursuant to an exclusive or non-exclusive license and/or endorsement agreement, totaling approximately $23 million per year.

Key rules of NIL arrangements

Oregon lawyers have three key areas to consider when exploring NIL contracts and arrangements:

1. Other states’ laws: As of August 2024, over twenty states have NIL laws or executive orders, each with their own wrinkles. Generally, these laws prevent educational institutions and the NCAA from restricting student-athletes’ rights to earn compensation for their NIL, with various states implementing additional provisions. Texas, for example, precludes deals involving alcohol, gambling, adult entertainment, and cannabis. In California, companies are prohibited from signing student-athletes to an endorsement deal if the student-athlete’s team has a preexisting corporate agreement in the same industry. In Virginia, institutions are permitted to compensate student-athletes directly for the use of their NIL.
2. Institutional policies: Educational institutions often have their own rules governing NIL opportunities, and many state NIL laws prevent student-athletes from entering NIL contracts that conflict with team rules or existing institutional agreements. Schools can also enforce general conduct codes. For instance, Portland State University requires student-athlete NIL deals to adhere to the university’s student conduct code, presumably barring agreements with companies promoting alcohol, tobacco, or cannabis products.
3. NCAA rules: The NCAA rules continue to prohibit improper benefits (e.g., contracts without a quid pro quo), compensation for athletic participation or achievement, and educational institutions providing NIL compensation, although that may soon change under the proposed House Violating these rules can render a student-athlete ineligible and unable to compete, leading to potential public relations disasters for both the brand and the college.

Practical guidance on NIL for Oregon lawyers

The NIL industry offers a fresh marketing opportunity for businesses and lawyers in Oregon, especially those tied to sports, fitness, or college demographics. Lawyers advising clients on NIL deals must navigate state restrictions and policies.

ORS § 702.200 prohibits universities and athletic associations (the NCAA) from preventing or restricting the rights to (a) earn compensation for use of a student-athlete’s NIL and athletic reputation or (b) hire professional representation or an athlete agent. The law further bars universities and the NCAA from taking any retaliatory or penal action against students for exercising these rights. The law provides for several other standards, mostly mirroring similar regulations, including that a college or university may not pay a student-athlete directly for use of their NIL. One point of departure from the NCAA guidelines is that a person or entity who pays a student-athlete for use of their NIL may condition payment on that student-athlete’s attendance at a particular school.

Any lawyer receiving compensation from NIL deals with student-athletes should also be familiar with the Uniform Athlete Agents Act, ORS § 702.001. The law identifies athlete agents as anyone who recruits or solicits a student-athlete to enter into an “agency contract,” an agreement in which a student-athlete authorizes a person to negotiate or solicit, on behalf of the student-athlete, a professional sports services contract or an endorsement contract. An athlete agent can be someone who, for compensation or in anticipation of compensation in relation to a student-athlete’s participation in athletics, serves the student-athlete in an advisory capacity on matters related to finances, business pursuits, or career management decisions. Athlete agents could also manage the business affairs of athletes by helping with bills, payments, contracts, or taxes. Under this final definition, one would be considered an athlete agent if they provided these services free of compensation but gave the student-athlete consideration in anticipation of representing them in the future for purposes related to their participation in athletics.

A lawyer will likely not be acting as an athlete agent by solely negotiating an NIL deal unless they are paid like an agent and provide agent-like services. Oregon lawyers should be prepared to stay informed on developing case law in the space and comply with evolving state laws as well as the NCAA regulations and other states’ laws to determine for themselves if they are acting as a lawyer or an agent.

Many businesses will be looking to tap into this growing industry. Most NIL contracts will involve student-athletes primarily known in areas around their college. This limited market reach has two important implications. First, the cost of NIL deals is typically much less in comparison to other professional athlete endorsements, allowing businesses to experiment with NIL deals without significant investment and allowing some businesses access to athlete endorsements for the first time. Second, these local endorsements can align well with advertising efforts targeted at specific markets, offering better and more streamlined value. As businesses can take various approaches to securing NIL deals, lawyers should evaluate any proposed NIL deals to ensure compliance with applicable rules and laws.

Counsel can also help clients establish formal policies governing NIL deals, specifying permitted arrangements and required information for review and approval, which could also lead to uniform training and sample forms. Counsel might also advise clients on establishing special funds to sign NIL deals directly with student-athletes. In any scenario, it’s important to consider if the client’s agreements allow marketing funds to be used to cover the cost of supporting NIL efforts.

Tips and traps

While NIL rules and best practices will continue to evolve, consider the following tips and traps:

- Know the rulebook. Certain NCAA bylaws still apply to student-athletes and NIL deals. For instance, a contracting party cannot provide something of value for free to the student-athlete. To avoid this otherwise “impermissible benefit,” the student-athlete will need perform some service in return (e.g., make a social media post, attend an autograph session, do a photo shoot, etc.) to properly receive compensation.
- Keep it simple. NIL contracts should use plain English. Student-athletes will often sign NIL contracts without representation, so clarity is crucial to allow a student-athlete to understand what they are signing.
- Exercise caution with international players. International students on visas risk losing their immigration status by performing NIL deals in the United States. F1 visas largely bar off-campus employment, and U.S. Immigration and Customs Enforcement (ICE) has not provided clear guidance about NIL deals for international student-athletes. Even creative “solutions” may still expose international student-athletes to risk of visa revocation.
- Avoid school ties. Student-athletes cannot use their educational institution’s trademarks in NIL activities without consent from the institution. They also cannot use school facilities or participate in NIL activities during team events without prior written consent from the athletic department.

Given the nascent and evolving nature of the NIL legal landscape, lawyers who represent brands, schools, or students in NIL deals must stay current, as the downsides of getting it wrong can be significant. ♦

[1] Commw. of Va. joined the State of Tenn. as a plaintiff in this action, and they were recently joined by the State of Florida, the State of New York and the District of Columbia.

[2] Holding that “college athletes may be employees under the FLSA when they (a) perform services for another party, (b) ‘necessarily and primarily for the [other party’s] benefit,’ Tenn. Coal, 321 U.S. at 598, (c) under that party’s control or right of control, id., and (d) in return for ‘express’ or ‘implied’ compensation or ‘in-kind benefits.’”