Earlier this spring, McDermott Partner Erin Turley delivered a presentation about the impacts of recent Employee Retirement Income Security Act of 1974 (ERISA) litigation. Lawsuits now target both large and small employee benefit plans; plan sponsors are being sued and dragged into complex and lengthy litigation, thus changing the basic economics of the provision of fiduciary liability insurance. In response to these lawsuits, plan sponsors are looking to outsource as much of this fiduciary responsibility and potential liability and exposure as possible.
Fiduciaries of 403(b), 401(a) and 457(b) retirement plans have come under increased scrutiny in recent years, in part due to participant lawsuits filed against plan sponsors and the resulting media attention. In this presentation with the 457 Consulting Group, McDermott Partner Todd Solomon discusses the fiduciary duties of plan sponsors and how to mitigate potential risks. The content in these slides applies to governmental 457(b) plans.
Restrictive covenants were once the exclusive province of the courts in each state. That is no longer the case. Although case law still governs restrictive covenants, states also are enacting restrictive covenants statutes.
Today, 30 states (including Washington, DC) have laws affecting restrictive covenants. Unlike state statutes regulating trade secrets (which largely follow the Uniform Trade Secrets Act), the state statutes governing restrictive covenants run a wide gamut. These changes reflect an increasing hostility towards restrictive covenants. In this Westlaw Today article, McDermott’s Brian Mead and Aaron P. Sayers provide an overview of state statutes that became effective in late 2021 or are becoming effective in 2022.
The Federal Civil Penalties Inflation Adjustment Act of 2015 directs the US Department of Labor (DOL) to make annual inflation adjustments to specified Employee Retirement Income Security Act (ERISA) violations. The increased penalties generally apply to reporting and disclosure failures if the penalty is assessed after January 15, 2022, and if the violation occurred after November 2, 2015.
What questions should a governing board’s executive compensation committee ask itself?
According to this August 2021 e-book edited by McDermott Partner Michael Peregrine, committee members should regularly ask themselves questions about executive benefit programs, executive compensation programs, performance priorities and leadership development programs.
Long considered controversial from economic and shareholder perspectives, living wage concepts are receiving more attention in the context of economic policy, social responsibility and ESG investing. As progressive perspectives concerning income equality, and executive and employee compensation, are becoming more mainstream, corporate leaders should prepare for greater engagement in this important conversation.
Companies enter into merger & acquisition (M&A) deals for a range of reasons, but how employees are treated once a deal closes depends largely on the buyer’s deal strategy. Often the buyer signs a deal under the promise that the acquired business’ employees will continue to receive rewards at deal close that are comparable to those they received before, at least for a specified period of time. But why include such comparability provisions in deal terms given that they appear to restrict the buyer? What do these provisions typically cover? And what are best practices?
Willis Tower Watson recently tapped law firms with leading M&A advisory teams, including McDermott’s Carole Spink, to dig into the answers.
With a new election and administration, there also are projected impacts on proxy preparation for 2021 and beyond. McDermott partner Andrew Liazos, member and immediate past chair of the ABA’s National Institute of Executive Compensation, led a discussion together with Sharon S. Briansky, associate general counsel and secretary at Thermo Fisher Scientific along with Bindu Culas, managing director at F.W. Cook. Topics addressed include: adjustments to existing short- and long-term incentive awards, the use of new performance metrics for social justice and environmental, social and corporate governance (ESG), new human capital disclosures for 2021, the impact of Institutional Shareholder Services (ISS) policy changes on compensation and disclosure practices and what to consider when requesting shares for equity plans in the current environment.
The Internal Revenue Service (IRS) recently issued practical and helpful guidance in a question-and-answer format for tax-qualified retirement plans and for an Individual Retirement Arrangement (IRA), regarding the legislative changes under the Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”) and the Bipartisan American Miners Act of 2019 (the “Miners Act”).
Teal Trujillo, an incoming associate in our Chicago office, also contributed to this On the Subject.