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Richard C. Shea

Richard Shea is chair of Covington’s Employee Benefits and Executive Compensation practice and is widely regarded as the nation’s leading authority on cash balance, pension equity, and other complex benefit plan designs.  His practice spans the full breadth of activities needed to help his clients resolve novel, sensitive, or intractable issues.  His approach focuses on developing important new legal insights and ideas, and then combining them into effective litigation, legislative, regulatory, and benefit design strategies for his clients.

Kodak recently announced that it is increasing the benefits provided under its defined benefit plan.  Kodak will credit an additional 3% of pay each year under its cash balance pension plan instead of making a matching contribution of up to 3% of pay under its 401(k) plan.  In connection with this change, Kodak announced that

Earlier today, the Supreme Court agreed to review the Sixth Circuit’s decision United States v. Quality Stores.  In that decision, the Sixth Circuit sided with taxpayers and concluded that certain severance payments that qualify as supplemental unemployment benefit payments (or “SUB” payments) for federal income tax purposes are not subject to tax under the

In an amicus brief filed last week, the ERISA Industry Committee and Chamber of Commerce of the United States of America stated that a court should not rewrite a plan document, or penalize the administrator who follows the plan document, merely because a summary plan description does not disclose wear-away in pension accruals (although it

Reflecting on the labor market on this Labor Day, we note that many economists are predicting that, unlike prior recessions, employment and wages will not bounce back after the current economic downturn that began in 2008.  Employers will retain significant bargaining power in US and overseas labor markets, likely leading to diminishing job security and

The IRS issued guidance today defining same-sex marriage for purposes of federal tax rules.  Following the Supreme Court’s decision in United States v. Windsor last June invalidating section 3 of the Defense of Marriage Act (DOMA), federal law no longer limits the definition of marriage to opposite sex spouses.  However, the Windsor decision did not

Earlier today in United States v. Windsor, the Supreme Court struck down section 3 of the federal Defense of Marriage Act (“DOMA”).  Section 3 of DOMA limits the definition of marriage for purposes of federal law to marriage between individuals of the opposite sex.   The Court held that DOMA deprives same sex couples of due process in violation of the Fifth Amendment.   The Court’s ruling applies to marriages recognized under state law;   the Court did not address whether the Constitution requires states to recognize same sex marriage.

The Court’s opinion notes that DOMA affects over “1,000 statutes and numerous federal regulations.”   Many of the affected statutes and regulations relate to employee benefits.  As a result, the decision is likely to affect the benefits provided under employee benefit plans and the tax treatment those benefits receive.  In some cases, the Court’s decision could have implications for benefits that have already been paid. We encourage employers to review their benefit plans and plan administration to identify changes that might be required or desirable as a result of the ruling.
Continue Reading Supreme Court’s DOMA Decision Has Significant Implications for Employers and Employee Benefit Plans

The Obama Administration’s 2014 budget includes a proposal to eliminate the deduction for dividends paid on employer stock held by an employee stock ownership plan (“ESOP”).  The proposal would be effective for dividends paid after the date the budget is enacted.  Under the proposal, the deduction would continue to be available to corporations with annual

As we have previously discussed, companies face a growing threat that trade secrets and other critical business information will be taken by employees and other insiders.  Protecting business critical information is not simple.  Companies need a holistic approach that implicates multiple areas of the law, including data security, privacy, intellectual property, white collar crime,

At a recent forum in New York, a team of Covington & Burling LLP lawyers addressed the growing concern among companies that their most valuable assets might just walk out the front door on a thumb drive in an employee’s pocket or otherwise be taken by company insiders.  Although much of the discussion in this country is focused on securing systems from cyber-attacks, Michael Chertoff (former Secretary of Homeland Security and now Senior Of Counsel at Covington) noted that focusing only on attacks from outside a company is like locking a door but leaving a window open. The threat from insiders is substantial, and addressing this threat involves many disciplines, including employee benefits and executive compensation.

Protecting business critical information is not simple.  It involves identifying which information is critical, designating that information confidential, establishing practices, procedures, and policies to maintain confidentiality, and being prepared to address immediately breaches that occur.  Each step implicates several areas of the law, including data security, privacy, intellectual property, white collar crime, employment, employee benefits and executive compensation, corporate and securities, insurance coverage, and crisis management.  For example, the recent White House initiative to combat trade secret theft identified human resources policies as a key area of focus in developing best practices to protect trade secrets. 
Continue Reading Why Is a Benefits Lawyer Talking about Trade Secret Theft?