State Archives - Pay Per Touch

January 6, 2023

Business insurance battle for Covid losses shifts to state high courts

The combat is “definitely not over,” say policyholders’ counsel California Supreme Court docket asked to weigh in
So significantly high court docket conclusions favor insurers 9 to 1

(Reuters) – Each and every federal appellate court to take into account the question so considerably has dominated that business all-threat home coverage procedures do not protect income dropped thanks to the Covid-19 pandemic, but policyholders’ legal professionals say the struggle is just having commenced on the battlegrounds that make a difference the most: the state supreme courts.

“It’s surely not over. That’s the takeaway for 2023,” claimed Michael Levine of Hunton Andrews Kurth, who is representing policyholders in various Covid-19 company interruption disputes nationwide.

“Most state significant courts still have not spoken on the issue, but the range will boost in 2023,” Levine explained, with new situations pending in the top courts of New York, Louisiana, Nevada, and Alaska – and, as of Wednesday, California.

Specifically, the 9th U.S. Circuit Courtroom of Appeals questioned the California Supreme Court to resolve a split among the California appellate courts as to regardless of whether the existence of the Covid-19 virus “can constitute ‘direct bodily loss or damage to property’ for needs of coverage under a professional property insurance policy coverage.”

The 9th Circuit seemed to rule out that probability in a 2021 decision, but not all state courts agreed with it. Some appellate divisions dominated in 2022 that plaintiffs have to have a likelihood to clearly show that the virus does, in truth, lead to a “physical alteration” by adhering to surfaces.

The 9th Circuit sent the issue to the California Supreme Court docket on Dec. 28, two weeks after the panel listened to argument in event-enterprise One more Planet Entertainment’s attractiveness of a ruling for its insurer, Vigilant Insurance policy. (Neither the celebration company’s lawyers at Pasich nor Vigilant’s authorized team at O’Melveny & Myers and Clyde & Co responded to requests for remark on Friday.)

“If the California Supreme Courtroom does choose up this query, which is heading to be the scenario that everybody’s observing – together with the New York situation,” explained David Weiss, a spouse in Reed Smith’s Litigation Insurance policy Restoration Team. The business has represented firms in Covid-protection disputes as effectively as United Policyholders, an advocacy team that often files amicus briefs on the matter and options to do so in the New York circumstance, Consolidated Restaurant Business (CRO) v. Westport Insurance coverage.

CRO, represented by lawyers at Cohen Ziffer Frenchman & McKenna, suggests the New York trial and appellate courts improperly grafted a prerequisite of “tangible alteration” onto the definition of property hurt, which would eliminate coverage for pollutants and destructive fumes.

Westport disagreed. Its legal professionals at O’Melveny & Myers and Clyde & Co argued that the situation provides “no novel challenges, nor troubles of good public significance.” But New York’s prime courtroom, the Court docket of Appeals, agreed to listen to CRO’s attractiveness on Nov. 30. (Attorneys for the two sides did not reply to requests for comment.)

Whilst the New York and California selections “could be really influential,” Weiss reported, “at the end of the working day the courts in other states are likely to use their possess rules to determine these difficulties.”

Both he and Levine foresee litigation continuing into 2024 or further than.

Laura Foggan, chair of Crowell & Moring’s Insurance policies/Reinsurance Team, is not so absolutely sure.

Even though “there may possibly be a point out or two that just stands as an aberration in opposition to the rest of the state,” she stated, “it doesn’t choose (a ruling) by just about every solitary condition supreme courtroom, when the prevailing perspective throughout the nation is constant.” Foggan has represented insurers and business trade associations in several Covid-coverage conditions.

In accordance to the University of Pennsylvania’s Covid Coverage Litigation Tracker, nine of the 10 higher court decisions as of Dec. 30 have been in favor of the insurance policies organizations. (The exception is Vermont.)

Three other condition supreme courts have heard argument but have not still ruled, in accordance to the litigation tracker.

Our Requirements: The Thomson Reuters Believe in Principles.

December 13, 2022

Insurers win another state high court COVID ruling

The Ohio Supreme Court on Monday became the seventh state high court to rule that policyholders were not entitled to COVID-19 business interruption coverage.

That leaves only the Vermont Supreme Court as the only state supreme court to date to rule in policyholders’ favor on that issue.

Boardman, Ohio-based Neuro Communication Services Inc. had an all-risk commercial-property insurance policy issued by Cincinnati Insurance Co., according to the Ohio Supreme Court ruling in Neuro-Communication Services Inc. v. Cincinnati Insurance Co. et al.

The company, which operates an audiology practice under the name Hearing Innovations, stopped almost all of its operations beginning on March 23, 2020, and did not resume business until May 4, 2020.

After Cincinnati denied coverage on the basis its claim did not involve a physical loss to the property, it filed suit in U.S. District Court in Youngstown. District Court Judge Benita Y. Pearson asked the Ohio Supreme Court to consider the case.

The question certified for consideration by the state Supreme Court was whether coronavirus’ presence constituted direct physical loss or damage and whether an infected person’s presence constitutes direct physical loss or damage.

“Cincinnati argues that the policy’s definition of the term ‘loss’ as ‘accidental physical loss or accidental physical damage’ necessarily requires that there be some physical damage to Neuro’s property,” the ruling said.

Neuro “argues that the term ‘loss’ includes a loss of use,” it said. “We agree with Cincinnati. The definition of the term ‘loss’ is clear: for coverage to be provided, there must loss or damage to Covered Property that is physical in nature,” which “does not include a loss of the ability to use Covered Property for business purposes,” it said.

A brief dissenting opinion said the supreme court should not have accepted the case because “This court already has a well-established body of jurisprudence on basic contract interpretation.”

Cincinnati Insurance said in a statement that “We thank the Court for its careful consideration of this case” and are pleased its decision follows those from the other state supreme courts “and all federal appeals courts to date” on the issue.

State Supreme Courts that have ruled in insurers’ favor are those of Iowa, Massachusetts, Oklahoma, South Carolina, Washington and Wisconsin, in addition to opinions by many federal district and appeals courts on the issue.

Nicholas A. DiCello, a partner with Spagenberg, Shibley & Liber LLP in Cleveland who represented Neuro-Communication, said in a statement, “We are disappointed in the Court’s ruling on behalf of our many clients and Ohio business owners.

“The policy before the Court did not contain a commonly used virus exclusion form. Absent a virus exclusion, our clients understood they would be covered.

“At a minimum, we believed the policy was ambiguous, and ambiguities are to be interpreted in favor of coverage. Nevertheless, the Court received comprehensive briefing and heard substantial argument, and we respect its ruling.”

John N. Ellison and Richard P. Lewis, partners at Reed Smith LLP in Philadelphia and New York, respectively, who authored an amicus brief filed by United Policyholders in the case on Neuro-Communication’s behalf, said in a statement that the court’s ruling “well demonstrates some of the inappropriate major hurdles that policyholders had to clear” in litigation COVID claims.

It said these hurdles include allowing the insurance industry “to make arguments untethered to the origin and purpose of the coverage,” and the court’s acceptance of them.

December 1, 2022

This state has the best personal-finance education in the U.S.

Monetary literacy is vital for handling money, but how very well are states preparing their students?

Tennessee tops the list of U.S. states that supply the most effective economic schooling for its people, in accordance to a new report by monetary-solutions corporation OneMain Fiscal. Extra than 99{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of students at general public superior schools in Tennessee have what’s recognized as “gold-access” schooling, attending a university where by they are necessary to acquire a personalized-finance study course in purchase to graduate.

The OneMain Economical report appears at four points for each individual point out: the quantity of energetic expenses marketing some form of economic schooling in community universities, the position of financial education and learning in public superior universities, the level of particular-finance schooling presented and needed, and the share of superior-university students in gold-obtain schools.

New York, Utah, Alabama and Virginia followed Tennessee in the rankings. Though only 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of New York’s superior-college college students are in gold-access universities, 11 financial- and financial-instruction charges have been proposed in the state this year. In the other a few states, over 97{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of college students are in gold-entry universities. (Tennessee, even so, has a poverty rate increased than at minimum 30 other states.)

“‘We believe that understanding budgeting, conserving, loans and credit rating playing cards as nicely as credit scores can established men and women up for a lifetime of monetary effectively-currently being.’”

— OneMain Financial’s report on fiscal literacy

“We think that understanding budgeting, saving, financial loans and credit cards as well as credit score scores can established men and women up for a life span of economical effectively-staying,” OneMain Monetary mentioned in the report. “So we looked closer at the most recent laws and discussions to gauge how we as a country are supplying men and women accessibility to money knowledge.”

In complete, elected officers had released 69 expenditures targeted on economical education in 27 states this yr as of late October, according to the Following Gen Personalized Finance Money Instruction Bill Tracker. NGPF is a nonprofit that aims to convey personalized-fiscal schooling to all learners. Among the those people expenditures, 12 have been signed into legislation in 10 states and 8 ended up however in progress in 3 states.

Around two dozen states involve learners to study about particular finance, possibly in a devoted course or integrated into other topics, in get to graduate from significant school, according to the Council for Financial Education‘s Survey of the States report. A several states, like Florida, handed payments in the summer months of 2022 producing individual-finance classes an person need.

Alaska, Wyoming and the District of Columbia do not have any own-finance education requirements in K-12 colleges and haven’t noticed any new payments, in accordance to the Council for Economic Education and learning report. California also does not have any this kind of necessities in area, but the state did move a bill in July to make a statewide task pressure to glance at the problem.

(OneMain Fiscal declined to offer you an assessment of states with the most affordable effectiveness in personal-finance education. Having said that, the scientists did say that 68{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of American superior-school learners do not comprehend credit score scores and also mentioned that vehicle loans rank at the rear of mortgages and scholar debt for the premier share of home personal debt amid older people. )

People in america regularly perform inadequately in money literacy survey

U.S. adults have the right way answered just 50{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of personalized-finance inquiries in an annual survey of financial literacy more than the previous 6 a long time, according to the 2022 report by the nonprofit TIAA Institute and the Worldwide Economical Literacy Excellence Heart at George Washington College.

Monetary literacy tends to be cheapest among the more youthful Individuals, according to the TIAA Institute and GFLEC’s Own Finance Index, a listing of 28 main queries in the once-a-year study. On regular, some 54{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of toddler boomers respond to all inquiries correctly, though 42{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Generation Z respondents answer all questions correctly. The concerns address all the things from saving, investing and borrowing to earning, consuming and comprehending risk.

Economical-literacy degrees have been “stubbornly resistant to progress,” according to analysts at the Milken Institute, a nonprofit consider tank dependent in Santa Monica, Calif. “This end result is specifically stressing for young people, who are most likely to facial area larger financial worries than earlier generations,” scientists concluded in a 2021 report.

Dollars-management capabilities required

Around the previous two years, the pandemic pushed quite a few states to look at requiring fiscal-literacy instruction in colleges. The pandemic disrupted careers and incomes for lots of households and specially for lower-profits people. The drive to encourage money schooling in faculties seems to have reaped rewards in Tennessee: The state’s average credit score score greater by 4 points to a “good” FICO
FICO,
+4.91{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
rating of 701 very last yr.

Us citizens keep on to deal with an uncertain financial outlook. Although inflation was down from 8.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in September, according to the most current govt details, it was however at 7.7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in Oct in contrast with a calendar year in the past. The increase in the charge of living finally confirmed some signals of cooling right after inflation strike a 40-calendar year substantial of practically 9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} this summer months in excess of a yr ago. Nevertheless, significant inflation has presently taken a toll on thousands and thousands of money-strapped homes.

Federal Reserve Vice Chair Lael Brainard indicated previously this month that the Fed could gradual its fee of curiosity-level hikes. It has raised premiums six periods this year and elevated the important fee by .75 proportion factors in November for the fourth time. That pushed the small-expression borrowing rate to a target vary of 3.75{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to 4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, making automobile loans and credit rating-card debt more high priced.

Buyers also documented owning to dip into their unexpected emergency financial savings to help deal with month-to-month bills. At the identical time, U.S. homes have developed a lot more dependent on credit rating playing cards and particular financial loans. Whole bank credit history-card balances attained a file $866 billion in the 3rd quarter of 2022, up 19{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} from a year in the past, according to TransUnion
TRU,
+4.33{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.

October 2, 2022

SPI Announces State Funds for Financial Literacy

California Division of Training
Information Launch

California Division of Education
News Release

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Launch: #22-44
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September 28, 2022&#13

SACRAMENTO—State Superintendent of Public Instruction Tony Thurmond hosted a digital webinar on September 28 to update nearby educational companies (LEAs), such as district and charter college directors and classroom educators, on about $3.6 billion in block grants and other means to market money education in California high faculties. He was joined by Tim Ranzetta, Co-Founder of Next Gen Personalized Finance, Cheryl Cotton, Deputy Superintendent of Instruction, Measurement, and Administration Department at the California Office of Education and learning (CDE), and Tara Razi, a personal finance trainer at San Marcos Unified School District, to share the gains of financial literacy for learners.

“This is a fantastic general public-private partnership. Mother and father want this, pupils want this, teachers want this. Now there’s a $3.6 billion in state funding and $1.4 million in free of charge obtain to skilled development that faculty districts can use to guarantee that all pupils graduate with basic financial literacy,” reported Thurmond. “Through participating lessons, we can instruct college students how to take care of their finances, stay clear of financial debt, and how to make knowledgeable and smart decisions that will profit them all through their lives.”

Hundreds of university districts attended the webinar that furnished information on how financial literacy skilled enhancement will be provided across the state at no expense. Analysis demonstrates that pupils who have access to higher-high quality financial training have much better economical outcomes as adults, resulting in considerably less personal debt and a larger top quality of daily life. This is why the CDE partnered with California-based nonprofit Following Gen Individual Finance (NGPF) to offer teacher stipends and professional progress for monetary literacy.

This August, Superintendent Thurmond declared he had secured $1.4 million in private funding for instructors in California high faculties to receive skilled development courtesy of Future Gen Particular Finance to train fiscal literacy. This builds on the $3.6 billion Arts, Audio, and Instructional Components Discretionary Block Grant to county offices of schooling, university districts, constitution faculties, and the Point out Specific Universities, which can be utilised to increase financial literacy study course choices. The one-time grant is out there for encumbrance as a result of the 2025–26 fiscal year and is allocated on a for every-pupil foundation.

“I believe individual finance and educating fiscal literacy is very significant in getting ready pupils to be potential-completely ready,” explained Razi. “One of the most significant points I want to stress to educators that are in this discussion board is that it is not tough to start this course and it will pay out off so considerably for your college students to choose this program. I am definitely excited to see this program mature and my hope is that we get additional teachers on board to teach it.”

Grant money will be made use of to deliver expert development workshops to increase teacher self esteem to educate the program. Instructors will acquire stipends for their participation, and the very first 1,000 California public high college teachers who complete 20 hours of experienced advancement with NGPF will receive a $500 stipend. Instructors can indicator up for these qualified improvement workshops by using NGPF’s Certification Programs&#13
, On-Need&#13
, and Digital PD&#13
internet web pages.

Funds will also be employed to catalyze access in the 5 most significant public university districts in the state—Los Angeles, San Diego, Fresno, Very long Seashore, and San Francisco. Future Gen Own Finance is giving a matching grant method to enable each individual district use a own finance specialist. This professional will supply curriculum support and professional enhancement to assist educators inside the district. These districts can get even more specifics about this grant plan by getting in touch with senior venture supervisor Tori Mansfield at tori@ngpf.org.

In addition to the NGPF curriculum currently becoming made use of by far more than 4,000 California educators, other significant-good quality sources are detailed on the CDE Grades K–12 Fiscal Literacy Assets world-wide-web website page. All those fascinated to master far more can e mail CFIRD@cde.ca.gov. A full recording of the webinar can be considered on the CDE Facebook website page&#13
.

# # # #

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Tony Thurmond —&#13
State Superintendent of General public Instruction
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Communications Division, Home 5602, 916-319-0818, Fax 916-319-0100

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Very last Reviewed: Thursday, September 29, 2022&#13

September 24, 2022

The State Of Personal Finance In America 2022

Six months in and 2022 is shaping up to be a year of uncertainty and worry for Americans when it comes their personal finances. Money issues from the end of 2021 like rising inflation followed people into the first quarter of 2022. Then, in the second quarter, inflation climbed to 40-year highs while housing prices continued their rapid rise—fanning the flames of economic insecurity and putting pressure on Americans who were just trying to keep up with their bills.

The latest edition of The State of Personal Finance 2022 examines how Americans are handling their financial struggles and what they’re doing to change habits and brace for what they believe might come next. Based on research Ramsey Solutions has done over the last 18 months, we can see a definite upward trend in all the different ways Americans are struggling with money.

In connection with the theme of financial struggles, the study also looks at the fast-shifting job market (which is still feeling the effects of The Great Resignation), as well as people’s overall outlook on the real estate market, and perceptions of legislation for student loan debt.

The most recent information in this study, which pertains to the second quarter of 2022, will be featured first, followed by the first quarter findings.

Executive Summary

Section One: Q2 2022 Findings

We’re seeing a negative upward trend in many sectors of Americans’ financial state over the last 18 months.
One in three Americans said they are either struggling or in a crisis with their personal finances, and over half said they had difficulty paying their bills.
Gen X is struggling the most in the current economic situation.
Housing is another source of stress, with 64{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of renters finding it hard to cover their rent (up 15 points from 18 months ago).
When asked what their two biggest financial challenges were, 40{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Americans reported inflation was their most pressing challenge, followed closely by cost of living (39{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}).
Most Americans are cutting back on expenses to make ends meet, with most (70{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) cutting back on travel.
59{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Americans said they worry about their general finances daily (a 15{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} increase from 18 months ago) and about half have lost sleep in the last three months due to financial worries.
8 in 10 Americans (84{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) are concerned about how a recession will impact their household. 75{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} said a recession would have a significant negative impact.
When it comes to the real estate market, most Americans were pessimistic—with only 24{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} saying they’re optimistic about the market in their area.
The Great Resignation was still hanging over the job market, with 57{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Americans considering changing jobs.

Section Two: Q1 2022 Findings

People were seeing the very real impact of inflation on their spending and adjusted accordingly—from groceries to summer vacation plans.
Despite the rise in inflation, more than a third of consumers admitted to making impulse purchases while shopping.
For those who expected to receive a refund from their 2021 tax return, half said they plan to use it to cover bills or debt.
People most often turned to family members and friends for financial advice (33{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} and 25{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, respectively).
Interest in cryptocurrency continued to increase (up two percentage points from last quarter and 15 percentage points from the same time last year).
A majority of Americans with student loan debt (77{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) believe at least some of their debt will be forgiven by the federal government. But four in 10 said they were still extremely worried about having to make payments on their loans again.
Remote work has begun to affect the real estate market with more than one-third those who work remotely saying remote work gave them the flexibility to move to away from where their job is based.

SECTION ONE: Q2 2022 FINDINGS

Downloads

The Struggle with Finances is Real . . . and Increasing

The daily struggle with money became more difficult for many Americans in the second quarter of 2022. One in three said they’re either struggling or in a crisis with their money. And the trend is moving steadily upward with a 12-point increase from the first quarter of 2021.

Over half (56{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) of Americans said they had at least some difficulty paying their basic bills overall, while the number of people saying they struggled to pay for necessities like food and housing is on the rise. About 44{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} had trouble paying for food, up about 13 points from 18 months ago. Six in 10 renters said their housing costs were a strain (up 15 points) while nearly half (49{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) of homeowners with mortgages found it hard to make their monthly payments, up six points from Q1 2021.

Younger Americans had the most trouble covering the basics when compared to their Baby Boomer parents and grandparents. Over 60{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Gen X, Millennials, and Gen Z (64{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, 64{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, and 67{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} respectively) faced difficulty paying their bills, compared to only 39{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Baby Boomers. About half of the younger generations (55{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Gen Z, 49{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Millennials, and 56{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Gen X) said they had trouble paying for food compared to only about a quarter of Baby Boomers (24{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}). Gen Z struggled the most with their mortgage payments (77{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), and Gen X had the most difficulty paying rent (72{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}).

As with most things, debt made these issues even worse. People with debt had more trouble keeping their bills paid (66{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) than those without debt (43{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}). The same was also true for paying a mortgage (53{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} vs 36{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), rent (64{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} vs 57{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), and for food (52{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} vs 32{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}).

Inflation and Cost-of-Living are the Biggest Financial Problems

Americans’ two biggest challenges in paying for these basics were inflation (40{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) and the cost of living (39{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}).

Consumers felt the effects of inflation the most with 85{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} saying it had at least some effect on their finances—up three points from last quarter. Inflation’s impact on Americans’ budgets has been trending up for the last three quarters.

Americans are Cutting Back

As inflation continues to sap Americans’ spending power, most cut back on expenses to make ends meet, starting with travel. Seven in 10 said they cut back on their travel plans in the second quarter, continuing the trend from the first quarter. Other adjustments include not purchasing an item they had originally planned to purchase (41{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) and reducing their monthly savings amount (33{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) or debt payment (25{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}). Almost a quarter (22{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) said they cut back on how much they’re putting away for retirement.

The money challenges of the last quarter encouraged many to keep better track of their money. Nearly three-quarters (73{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) reported changes in their spending, saving, budgeting, or other money-related behaviors. Almost one-third (32{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) said they started budgeting in some way.

Americans also found other ways to make their budgets work—some more helpful than others. 20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} said they took on a second job or a side hustle to boost their income. 27{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} began selling items they had around the house. 25{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} said they used a credit card for a purchase they would normally pay for with cash. And 15{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} took on new debt to pay bills.

Worries Over Money Rise

As the number of people struggling to pay for their basic needs grows, worry and anxiety about money are also on the rise. Nearly six in 10 Americans (59{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) said they worry about their general finances daily—a 15-point increase from 18 months ago. Almost half (46{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) have lost sleep in the last three months worrying about money, which is an 11-point increase from 18 months ago. And 59{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} believe they can’t get ahead with their finances—living paycheck to paycheck and not saving very much as a result.

Americans Fear Recession and Feel Unprepared for One

The reality of many Americans’ financial situation and the resulting stress and anxiety are reflected in their feelings about the economy overall—especially when it comes to a possible recession. More than eight in 10 Americans (82{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) are worried about the strength of the economy.

Not surprisingly, another eight in 10 Americans (84{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) are also concerned about how a recession will impact their household, with 75{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} saying a recession would have a significant negative impact. A little over half (51{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) said they’re financially prepared for a recession.

Here again, the burden of debt plays a big role in American’s outlook. People who were debt-free were less likely to say a recession would have a negative impact on them (66{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) compared to those who had debt (82{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}).

The American Dream Seems Further Away

Americans’ uncertainty and stress around the country’s current economic situation carried over to their outlook on the real estate market. Most Americans were pessimistic about real estate—with only 24{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} saying they were optimistic about the market in their area. Half (51{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) said the American dream of owning a home isn’t possible for most adults right now.

Digging deeper, 65{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Americans said it’s more difficult to own a home today compared to past decades. The significant and steady price increases in the housing market over the last two years are a main factor in people’s pessimistic perceptions, with 61{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} saying now was not a good time to buy a house and almost three-quarters (73{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) believing housing prices will increase even more over the next year.

In a reversal of the overall generational patterns in this study, Baby Boomers were the most pessimistic generation about the real estate market. 77{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} said home ownership is difficult, which was significantly higher than the younger generations (59{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Gen Z, 54{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Millennials, and 66{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Gen X). 71{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Boomers didn’t think it was a good time to buy a house—compared to 55{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Gen Z, 50{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Millennials, and 65{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Gen X.

Job Dissatisfaction Leading to Shifting Jobs and Shifting Income

Despite (or perhaps, because of) concerns about the country’s economic situation, the Great Resignation is still a major force in the American job market. Well over half (57{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) of Americans were considering leaving their current job, and just over a quarter (27{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) took the plunge and changed their jobs in the past 12 months.

However, there’s another side to the career coin: The new jobs Americans are landing don’t always improve their personal financial situation. Of the people who changed jobs in the past 12 months, 20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} said they received a pay increase while 16{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} took a pay cut to land a new job.

SECTION TWO: Q1 2022 FINDINGS

Downloads

Inflation Problems are Front-and-Center

The shadow of rising inflation continued to play a major role in the financial decisions of most American consumers. The sharp increase in prices led to a nearly 10{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} increase in the number of people who noticed the effects of inflation this quarter over last quarter, with people feeling the most pain at the gas pump and the grocery store. Eight in 10 said inflation had an impact on their day-to-day finances. And one-third reported that inflation made a significant impact on their financial decisions.

People were also finding ways to supplement their take-home pay to cover the increased costs. 13 percent said they got a side hustle or second job on top of their regular full-time job in response to inflation. And one in 10 took on new debt to cover rising costs.

As with most things, debt made the effects of inflation even worse. Those with consumer debt were nearly twice as likely (40{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to say inflation had a significant impact on their day-to-day-finances compared to those who are debt-free (23{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}). Because of the rising prices caused by inflation, one in four people with debt cut back on the amount they put toward paying off their debt, and one in five relied on credit cards to buy something they would normally pay for with cash. However, one in four have also started budgeting to track their spending.

The stress caused by increased spending due to inflation also led to increased anxiety among consumers. A majority (60{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) said they were anxious about how they were going to pay for the things because of inflation.

Inflation’s Impacts on Consumer Spending are Far-Reaching

With prices rising on everyday goods and services, consumers looked for ways to lessen the impact on their family’s budgets by really thinking about the ways they spend money. Four out of five Americans said inflation significantly changed the way they shop for groceries, with 39{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} saying they cut back on non-essential grocery and food items. Nearly one-third said they either delayed or cancelled a future purchase.

Compared to last year around the same time, people spent more on groceries, utilities, and transportation in Q1 of 2022. On the other end of the spectrum, people spent less on non-essential items like eating out, entertainment, and travel—though the number of people spending less on those items was decidedly fewer. For example, in the top spots on both ends, 57{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} said they spent more on groceries, but only 33{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} said they spent less on eating out.

Inflation also impacted summer vacation spending plans. While six in 10 were planning to travel this summer, half are increasing their travel budget or completely changing their travel plans to offset higher prices. Despite the increase in gas prices, 12{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} more people plan to drive to their destinations rather than fly.

Impulse Buying Continues Despite Inflation Concerns

Even though people have changed their spending habits to combat inflation, impulse buying remained common. More than a third of consumers in America admitted to making at least one impulse purchase in the last three months—the majority of which were food items found while shopping in a store. Nearly one quarter of consumers made impulse purchases on social media, with 30{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of Millennials in particular admitting to these types of purchases.

Impulse buying habits also have a psychological component. Most people who made impulse purchases (60{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) said they felt guilty about it—and 53{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} regretted making the purchase. Sixty-four percent (64{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) said they were likely to make impulse purchases when stressed. However, among people who budget their money, 85{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} said budgeting helped control their impulse spending.

The popularity of buy now, pay later (BNPL) services remained steady despite increased inflation, with the number of people who used them hovering at around 21{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. A majority of BNPL users (79{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) preferred the service over using a credit card. But a majority (60{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) also had trouble managing their payments. Two-thirds admitted they were still paying for an item they bought with a BNPL service even after they no longer owned the item.

Tax Refunds Come in . . . and Go Out to Savings and Bills

The beginning of the year also brought launch of the 2021 tax season. Of the people who had filed their 2021 taxes at the time of the survey, seven in 10 expected to receive a refund.

In a possible reaction to the uncertain financial times, 47{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} said they plan to save their refund. And half said they would use their refund to cover bills—either paying everyday expenses or paying down debt.

Consumers are Looking for Reliable Financial Information

In this time of financial uncertainty and worries about inflation, people are looking for sources they truly trust for advice on what to do with their money. The most popular sources of financial advice in the first quarter of 2022 were family (33{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) and friends (25{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}). Four in 10 said they don’t have anyone to turn to for financial advice. Younger generations (Gen Z and Millennials) especially lacked trustworthy financial sources, with about half of them saying they had no one to turn to.

Consumers, especially the younger generations, increasingly looked to content on social media for financial advice. One third said they implemented financial advice they found from someone they follow on social media. YouTube had the most influence in all generations and was as popular as an actual financial advisor as a trusted source of financial advice. Gen Z was the most likely to get money advice from YouTube (43{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), followed by Millennials (37{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), Gen X (20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), and Baby Boomers (6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}).

Investment in Cryptocurrency on the Rise

Americans’ interest in cryptocurrency continued to rise steadily. One in four investors said they had purchased crypto—up two percentage points from the previous quarter, and up 15 percentage points from the same time last year. Millennials lead the pack in crypto interest (40{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), followed by Gen Z (37{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), Gen X (23{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), and Baby Boomers (2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}).

Student Loan Deferments Create an Uncertain Certainty

Outstanding student loan debt was also a source of financial stress for Americans in Q1. Three-fourths of those who took out student loan debt are still paying on their loans. But, since the start of the COVID-19 pandemic in March of 2020, federal student loan payments have been paused by the federal government. With the pandemic getting further and further in the rear-view mirror, those payments were scheduled to restart in May 2022. Then the government extended the moratorium through August 2022.

The Q1 State of Personal Finance survey was conducted before the government announced the most recent extension of the moratorium. At that time, four in 10 people with student loan debt said they were extremely worried about their loan payments restarting. And three in 10 said they weren’t prepared to start making payments again. Most borrowers (77{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) are holding out hope that at least some of their student loan debt will eventually be forgiven.

Career Trends Point to Continued Job Dissatisfaction and Remote Work Favorability

The 2021 Great Resignation brought on in the wake of the COVID-19 pandemic didn’t seem to lose any steam going into 2022. Less than half of Americans (40{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) were extremely satisfied with their jobs, and half were considering changing their jobs—a result consistent with the last two times Ramsey Solutions surveyed this question in The State of Work and The State of Financial Wellness studies. There was also very little difference in current levels of satisfaction between those who changed jobs and those who didn’t. Among the generations, Gen Z (65{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) and Millennials (60{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) were the most likely to consider changing jobs.

Many employees are facing a change in their work situation as companies plan to transition workers back on-site work. Forty-five percent (45{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) of fully remote workers said their employer plans to return employees to an on-site location soon. While a slim majority still listed their primary working environment as fully on-site (52{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), those who have been working from home had grown accustomed to the freedom it brought them, and most would like to see that way of working continue. In fact, four in 10 fully remote workers said they would be extremely likely to quit their current job if it transitioned to a fully onsite role.

Real Estate Market Impacted by Remote Work

The remote working trend has also influenced the real estate market, as job location is now less of a factor when people are deciding where to live. Almost half (44{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) said the ability to work remotely has impacted their decision about where to live, and over one-third (37{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) said they moved away from where their job was based because of their ability to work from home.

However, with the real estate market’s surging prices and mortgage interest rates rising, there is also a lot of uncertainty. A majority of both buyers (46{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) and sellers (43{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) reported being pessimistic about the real estate market.

Conclusion

The current state of personal finance in America is full of worry—part of an upward trend over at least the past 18 months. Inflation concerns have cast a big shadow over everything—making consumers nervous on many financial fronts like grocery shopping and vacation planning. Many are finding it stressful to pay their bills and are cutting back, with some losing sleep in the process. The worries have especially hit Gen Xers, who are struggling the most in the current economic climate compared to their Baby Boomer parents are grandparents.

From the job market to real estate and student loans, a big cloud of mystery hangs over the air, with most consumers hunkering down and adjusting their spending accordingly. The country’s bearish economic situation has contributed to Americans’ pessimistic perception of the housing market. Half of Americans believe the American dream of owning a home might be beyond their reach, and more are convinced now is not a good time to buy a house. But despite a continued rise in inflation, there is still only slightly less spending on non-essentials.

About the Study

The State of Personal Finance study is a quarterly research study conducted by Ramsey Solutions with 1,001 U.S. adults to gain an understanding of the personal finance behaviors and attitudes of Americans. The nationally representative sample was fielded from March 28 to April 5, 2022 (Q1), and from June 30 to July 8, 2022 (Q2), using a third-party research panel.

July 25, 2022

State curbs on noncompete agreements spread

Extra states are passing or introducing legislation that will make it more challenging to implement noncompete agreements on departing personnel.

Employers really should analyze the new legal guidelines in states exactly where they function to ensure they comply with the needs, which in some cases include things like salary limitations on work limitations, authorities say.

Last thirty day period, Colorado grew to become the most current state to enact a legislation curbing noncompete and nonsolicitation clauses in employment agreements.

Colorado H.B. 22-317, “Concerning Restrictive Work Agreements,” which was signed in June and takes result Aug. 10, eliminates noncompete agreements for personnel earning less than $101,250 a yr and presents for the defense of trade techniques. Some of the laws released in other places also ban noncompetes towards decreased-paid personnel. Other states that have lately enacted identical laws are Illinois, Nevada and Oregon.

The Colorado legislation, which applies prospectively, also applies to customer nonsolicitation agreements unless of course they are entered into by a person who earns at minimum 60{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of the threshold for very compensated employees, or $60,750. Staff must also be provided observe of the law ahead of they settle for employment.

Organizations that implement noncompetes that do not meet statutory prerequisite are issue to penalties of $5,000 for each employee.

Independently, a legislation accepted in January, which gurus say is exclusive to Colorado, criminalizes restrictive covenants, which incorporate noncompetes, by making it a misdemeanor that supplies for a $750 good per violation, a probable punishment of 120 days in prison, or both of those.

Industry experts say that besides for the misdemeanor demand, the Colorado law falls “in the middle of the pack” in conditions of its stringency amid the states that have enacted very similar laws. Far more states are envisioned to tackle the concern.

There are 39 such expenditures pending in 8 states, explained Erik W. Weibust, a partner at Epstein Becker Inexperienced P.C. in Boston.

Colorado’s “falls within just a craze that has been developing in the states to set wage flooring for noncompetes,” he explained.

Even though President Biden issued an government get a year back purchasing the Federal Trade Fee to examine the difficulty of noncompetes, there has been little federal motion.

Legislative exercise in the region of noncompetes will very likely continue being targeted on the condition stage for at minimum the next 4 to 5 decades, said Jeanne Fugate, a companion with King & Spalding LLP in Los Angeles.

Observers say insurance policies brokers are among the varieties of enterprise most likely to be affected by the rules.

Quite a few brokers have sued former personnel that joined rivals in the earlier many several years. For instance, past thirty day period a courtroom barred previous Willis Towers Watson PLC workers who experienced transfer to Alliant Insurance policies Solutions Inc. from working on their former accounts and soliciting business enterprise from Willis customers. Before this thirty day period , USI Insurance plan Providers LLC submitted a ask for for expedited discovery in noncompete litigation it submitted versus a former employee who formed his possess brokerage.

Other industries most affected by the guidelines consist of health and fitness treatment corporations, monetary advisers and information-oriented corporations.

“It’s normally a challenging harmony, with companies in search of to secure their company, trade strategies and goodwill on the one particular hand and on the other the employee’s correct to operate freely where ever they pick,” stated Amber Gonzales, a litigator with Crowell & Moring in Denver.

States updating their restrictive covenant laws generally do not want to eradicate noncompetes but also want to keep away from having men and women railroaded by them, stated Eric Barton, a associate with Seyfarth Shaw LLP in Atlanta.

Pointing to the income limitations, Bennett Pine, a shareholder with Anderson Get rid of in New York, claimed, “It’s a single point to restrict an executive making $500,000. It is an additional detail to protect against a file clerk building $35,000 a year from likely to a competitor.”

Companies in Colorado should evaluation the noncompete agreements they introduce just after August and study their latest noncompetes and the extent to which they are reviewed on a yearly basis, said Michael Freimann, a partner with Armstrong Teasdale LLP in Denver.

It is going to be a problem for companies to comply with the laws, which necessitates “some really complex discover demands,” this sort of as contacting for businesses to tell potential staff members of the procedures ahead of they settle for an offer, claimed David C. Roth, an affiliate with Fisher Phillips LLP in Denver.

Multistate employers should also introduce tracking mechanisms to be absolutely sure they know each point out law and what to do in reaction, he claimed.

“Employers need to get resourceful about how to impose limits to safeguard by themselves in opposition to individuals” in whom they have produced sizeable investments, or who have been authorized access to trade secrets and techniques, to guard on their own in opposition to these types of personnel leaving, explained Maxwell N. Shaffer, a partner with Holland & Knight LLP in Denver. Some noncompete agreements he has reviewed are “lazy and generic,” he explained.