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The 10 Most Significant Matters CEOs Should Know About Their Employment Contracts

The most significant issues in any employment or severance agreement are going to be personal to that situation, and will be driven in part by special issues and circumstances. For instance, succession planning issues may be incredibly important to the organization when the CEO is 65 years old and there is no clear successor, and may be far less important when the CEO is 45 and there are very able executives ready to assume the CEO role if necessary. With that said, there are certain considerations to keep in mind for all who are drafting these contracts. McDermott’s Ralph E. DeJong contributes to an article in The Practical Lawyer that identifies and describes what frequently are the most important considerations in an employment or severance agreement between an exempt organization and its CEOs. Access the full article. Originally published in The Practical Lawyer, December 2019

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7 Severance Structuring Tips for Tax-Exempt Colleges and Universities

In-house counsel and human resources professionals at tax-exempt colleges and universities often face a variety of challenges when structuring, and determining obligations due under, severance arrangements. There are some key considerations to bear in mind, which are outlined in this article. Access the full article.

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April 15th Deadline for Filing FICA Refunds for Severance Pay

by Robin Greenhouse, Andrew Liazos and Ruth Wimer Severance pay due to an involuntary separation from employment resulting from a reduction in force, plant shutdown or similar condition may be exempt from FICA taxes.  As we reported in September 2012, the U.S. Court of Appeals for the Sixth Circuit found in Quality Stores that severance pay is not required to be tied to continued eligibility for unemployment benefits in order to be exempt from FICA.  (Click here for more details regarding the Quality Stores decision.)  Shortly after this decision the Internal Revenue Service (IRS) requested that the Sixth Circuit reconsider its decision in an en banc review (i.e., a hearing before all judges on the circuit court).  Earlier this month, the Sixth Circuit denied this request. The Quality Stores decision creates a clear split with the U.S. Court of Appeals for the Federal Circuit.  In light of the Sixth Circuit’s denial, the IRS...

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December 31 Deadline to Update Severance, Employment and Change in Control Agreements

by Jonathan J. Boyles Agreements that require a release or other signed document from an employee before payment should be reviewed to ensure compliance with Code Section 409A guidance.  Transition relief ends on December 31, 2012, and the penalties for noncompliance can be harsh.  Employers that conducted a fulsome Code Section 409A review in 2007 and 2008 should ensure their arrangements are in compliance with new guidance. To read the full article, click here.

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