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More Than Words of Disparagement: Does an Anti-Union Post Have to be Extreme to Go too Far?

In the union context, a significant degree of ?Ç£vituperative speech?Ç¥ is allowed in the ?Ç£heat of labor relations.?Ç¥?á For example, an owner of 10 Jimmy John?ÇÖs sandwich shops in the Minneapolis-St Paul area was subject to an organizing campaign by the International Workers of the World where some disparaging comments were being served on the union. ?áDuring the union campaign, various managers and employees set up an anti-union Facebook page, which was open to anyone. ?áA National Labor Relations Board Judge recently ruled, among other things, that some conduct of management on the Facebook page constituted an unfair labor practice, interfering with an affected employee?ÇÖs Section 7 rights under the National Labor Relations Act (?Ç£NLRA?Ç¥).?á Basically, some managers posted unflattering comments regarding a pro-union employee. The case is Miklin Enterprises, Inc. and Industrial Workers of the World (case numbers 18-ca-19707; 18-ca-19727; and 18-ca-19760) (April 20, 2012). ?áThis is a recent… Continue Reading

SEC Sues to Recover Bonuses and Stock Profits of ?Ç£Innocent?Ç¥ Former Executives

The Securities and Exchange Commission (?Ç£SEC?Ç¥) sued the former CEO and CFO of an Austin-based company for failure to reimburse the company for cash bonuses, incentive and equity-based compensation (?Ç£SOX 304 compensation?Ç¥) and profits received from sales of company stock during the 12-month periods following the issuance of the company?ÇÖs inaccurate quarterly and annual financial statements, which were later restated. The company was required to restate its financial statements due to a fraudulent scheme by two sales executives to overstate the company?ÇÖs revenues and earnings. The SEC did not allege the former CEO and CFO participated in the wrongful conduct; however, the SEC alleged they were still required to reimburse the company for the SOX 304 compensation and stock sale profits they received following the filing of the inaccurate statements. The SEC complaint can be found here.

IRS Releases Proposed Regulations on the Comparable Effectiveness Fee

The Internal Revenue Service (?Ç£IRS?Ç¥) released proposed regulations regarding the ?Ç£comparable effectiveness fee?Ç¥ applicable to certain health insurers and plan sponsors of self-insured health plans under PPACA. The comparable effectiveness fee will assist in financing the Patient-Centered Outcomes Research Institute (the ?Ç£Institute?Ç¥) which was established under PPACA to fund research of the clinical effectiveness of medical treatments, procedures and drugs. PPACA imposes the comparable effectiveness fee on an applicable issuer or plan sponsor for each plan or policy year ending on or after October 1, 2012, and before October 1, 2019, to support the Institute. The fee is $2.00 (for plan or policy years ending before October 1, 2013, the fee is $1.00) multiplied by the average number of lives covered under the plan or policy. The proposed regulations address the health insurers and plan sponsors which will be subject to this fee and explain how to calculate the average… Continue Reading

HHS Issues 2012 List of Counties Requiring Culturally and Linguistically Appropriate Services

The U.S. Department of Health and Human Services (?Ç£HHS?Ç¥) recently released a list of counties that will require culturally and linguistically appropriate services in 2012 under the Patient Protection and Affordable Care Act (?Ç£PPACA?Ç¥). Section 2719 of the Public Health Service Act requires non-grandfathered group health plans and health insurance issuers offering non-grandfathered health insurance coverage to provide relevant notices in a ?Ç£culturally and linguistically appropriate manner.?Ç¥ Notices subject to the requirement include the (1) additional internal claims and appeals requirements and external review procedures for non-grandfathered plans and (2) summary of benefits and coverage. The regulations implementing Section 2719 require that certain accommodations be made for relevant notices sent to an address in counties in which 10 percent or more of the population is literate in only the same non-English language. For such counties, English versions of the applicable notices must include a statement prominently displayed in the applicable… Continue Reading

Social Media Background Checks

You may recall our post a few weeks ago regarding the dangers in using social media to screen potential applicants for employment. ?á?áSome states have reacted recently by proposing laws banning an employer from even requesting a social media password of an applicant in the interview process (a topic of a forthcoming post on this blog).?á Against this background, many employers are deciding that it is best to use a third-party service for researching social media information regarding candidates.?á Curious to see what options are out there for your company? Check out a good example of the approach being taken with Social Media Delivered.

8th Circuit Rules that the Northwest Airlines Post-Bankruptcy Retirement Plan does not Violate ERISA or the ADEA

In affirming the district court’s ruling, the Eighth Circuit Federal Court of Appeals recently held that Northwest Airline’s post-bankruptcy retirement benefit plan (referred to as the “MP3”) did not violate ERISA or the Age Discrimination in Employment Act (ADEA).?á Following Northwest Airline’s bankruptcy in 2005, the company froze its traditional pension plan and agreed to make contributions on behalf of pilots to a retirement savings account (pro rata to pay).?á The Air Line Pilots Association (the ?Ç£Pilots Association?Ç¥) determined that the frozen pension plan and pro rata to pay contributions led to significant disparity in retirement income between more senior pilots and pilots with less years of service under the frozen pension plan.?á To address this concern, the Pilots Association and the company created the MP3, which allocated contributions so that all pilots, in combination with the frozen pension plan, would receive “an aggregate replacement income equal to approximately 50… Continue Reading

Early Retirement Supplement Found to be a “Protected Benefit” Due To Plan Drafting

An employer’s defined benefit pension plan defined “accrued benefit” to include early retirement supplemental benefits.?á However, the plan was amended to eliminate the early retirement supplemental benefit.?á A participant erroneously received payment of the early retirement supplemental benefit after the amendment and was asked by the employer to repay it to the plan.?á The employee claimed that elimination of the supplement violated ERISA’s “anti-cutback” rule. ?áThe U.S. Court of Appeals for the Fourth Circuit noted that, generally, stand-alone ancillary benefits are not independently protected by ERISA; however, because the plain language of the plan document included the early retirement supplement in its definition of accrued benefits, any change to the amount or existence of the supplement constituted a reduction in the accrued benefit.?á Accordingly, the court reversed the district court’s summary judgment and remanded for further proceedings consistent with the holding that the supplement was a protected accrued benefit for… Continue Reading

JOBS Act Exemption from Executive Compensation Reporting Requirements

The JOBS Act, which was signed into law on April 5th, exempts an ?Ç£emerging growth company?Ç¥ from certain executive compensation reporting requirements. An ?Ç£emerging growth company?Ç¥ is an issuer with total annual gross revenues of less than $1 billion until (1) the company has total annual gross revenues of $1 billion or more (subject to indexing), (2) the fifth anniversary of the first sale of common equity securities pursuant to a registration statement, (3) the company has issued more than $1 billion in non-convertible debt within a 3-year period, or (4) when the company is deemed to be a ?Ç£large accelerated filer.?Ç¥ However, a company that first sold common equity securities pursuant to a registration statement on or before December 8, 2011, cannot be an emerging growth company. An emerging growth company is exempt from rules requiring shareholder advisory votes on executive compensation and golden parachute payments. Such a company… Continue Reading

JOBS Act Expands Registration Exception for Private Companies and Employee Stock Plans

Prior to the JOBS Act, Section 12(g) of the Securities Exchange Act of 1934 required companies with total assets of more than $10 million and a class of equity securities held of record by 500 or more persons to register that class of equity security. The JOBS Act expands the exception for private companies by amending Section 12(g)(1)(A) of the Exchange Act to increase the number of holders of records to (i) 2,000 persons, or (ii) 500 persons who are not accredited investors. More significantly, with respect to compensatory employee stock plans, the JOBS Act amended Section 12(g)(5) of the Exchange Act by excluding for purposes of determining any holders of record, any persons who received the securities pursuant to an employee compensation plan in transactions exempted from the registration requirements of Section 5 of the Securities Act of 1933. The JOBS Act also requires the SEC to adopt safe… Continue Reading

Fiduciary Exception to Attorney-Client Privilege Does Not Apply to Top Hat Plan

The court considered an employee?ÇÖs motion to compel documents with respect to her employer?ÇÖs nonqualified pension benefit plan called the ?Ç£Wealth Accumulation Plan.?Ç¥ The employee asserted that the lawsuit turned on the single issue of whether the Wealth Accumulation Plan was a valid ?Ç£top hat?Ç¥ plan exempt from certain ERISA requirements. The court denied the plaintiff?ÇÖs motion to compel documents, finding that the employer?ÇÖs ?Ç£pleadings and exhibits sufficiently show, for the limited purpose of this discovery dispute only, that the [plan] is a top hat ERISA plan.?Ç¥ Therefore, the fiduciary exception to the attorney-client privilege that applies to plans covered by ERISA?ÇÖs fiduciary requirements did not apply and thus the documents protected by attorney client privilege were not discoverable. Tolbert v. RBC Capital Markets, Corp., No. H-11-0107 (S.D. Tex. Mar. 28, 2012).

April 2012