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Will Woolston is a partner in the firm's Washington office who advises employers large and small on all aspects of employee benefits and executive compensation.  Mr. Woolston’s practice focuses significantly on tax-qualified retirement plans, with a particular emphasis on “hybrid” defined benefit plans like cash balance and pension equity plans.  Mr. Woolston regularly represents clients on matters before the Internal Revenue Service and the Department of the Treasury, and has assisted many companies in resolving with the IRS operational and administrative errors in qualified plans.  In addition to his qualified plan work, Mr. Woolston also advises clients on the full spectrum of executive compensation matters, including equity compensation arrangements, employment agreements, and compliance with the deferred compensation requirements of Section 409A of the Internal Revenue Code.

Earlier this week, the IRS issued long-awaited proposed regulations under Section 162(m) of the Internal Revenue Code.  Our colleagues at Covington’s Tax Reporting & Withholding Blog published a comprehensive summary and analysis of the proposed regulations.  As you will see, the proposed regulations fell short of proposing workable solutions for public companies wrestling with the

In October, the U.S. Department of Labor released a proposed rule that would increase plan administrators’ ability to make certain required ERISA pension disclosures through electronic, rather than paper, delivery.  Below is a summary of the proposed rule with some highlights on aspects of the proposal that have been questioned by interested parties and might be changed.

Continue Reading DOL Proposal for Electronic Disclosure of ERISA Pension Documents

On August 20, 2019, the Ninth Circuit held in Dorman v. Charles Schwab Corp. that a 401(k) plan’s mandatory arbitration clause was enforceable in relation to a breach of fiduciary duty claim brought under ERISA § 502(a)(2).  No. 18-15281 (9th Cir. Aug. 20, 2019).  This is the first case in which the Ninth Circuit concluded that such fiduciary breach claims could be arbitrated.

Continue Reading Ninth Circuit Opens the Door to Arbitration in ERISA Fiduciary Breach Claims

This article originally appeared in Law360.

Companies have had a lot to digest since the passage of the Tax Cuts and Jobs Act (the “TJCA”) late last year.  But for executive compensation attorneys and professionals who work with or advise public companies, the elimination of the tax deduction for performance-based compensation under section 162(m) of the Internal Revenue Code was perhaps the most significant change brought about by tax reform.  Since then, the changes to section 162(m) have been top of mind for everyone involved with structuring executive compensation arrangements and strategies at public companies.

Among the many questions companies face following the changes to section 162(m) is whether to continue seeking periodic shareholder approval for the performance criteria under their incentive plans.  Before tax reform, companies were generally able to deduct performance-based compensation if, among other things, the performance criteria used in the arrangement were approved by shareholder vote at least once every five years.  The repeal of the performance-based compensation exception eliminated this requirement.  However, there may be other reasons why companies might opt to continue seeking shareholder approval, even if it will no longer allow the compensation to be deductible.

We researched what large public companies decided to do this year with regard to shareholder approval of their performance criteria by reviewing the most recent proxy statements filed by S&P 100 companies.  We discovered that most companies that under pre-TJCA law would have been scheduled to seek shareholder approval for their performance criteria (because they had previously done so five years ago) elected not to do so this year.  Although a limited data set, these findings may be instructive for other public companies who are considering how to approach this matter in future years.


Continue Reading Incentive Plans and Shareholder Approval After Tax Reform

[This article was originally published in Law360.]

As U.S. companies expand internationally, they often wish to compensate their non-U.S. employees with stock options, restricted stock, phantom stock and other forms of equity compensation. But offering equity compensation to non-U.S. employees is not as straightforward as it may sound, and is often more complicated than it is at home. U.S. companies venturing into the world of global equity compensation confront a complex, cross-border web of rules and regulations, which can vary markedly from country to country.

In this article, we highlight five critical questions that can help U.S. companies navigate common legal pitfalls in the global equity space. These questions focus on some of the most rapidly evolving areas of law, including securities, exchange controls, data privacy, tax and foreign account reporting, and labor and employment.


Continue Reading 5 Questions You Should Ask About Your Global Equity Awards

A new post on Covington’s eHealth blog discusses HIPAA-related provisions in the Twenty-First Century Cures Act, signed by President Obama on December 13.   These provisions direct HHS to consider HIPAA’s effects on mental health treatment and the availability of health data for research purposes.  Read the full post here.

The federal government has been encouraging employers to adopt best practices to address both external and internal threats to critical business information and infrastructure. These best practices have included an important human resources element, including policies and programs covering current and former employees.

For example, the Obama Administration opened its initiative to combat trade secret theft with a report that listed human resources policies as one of four areas in which employers need to adopt best practices. Similarly, the Framework for Improving Critical Infrastructure Cybersecurity developed by the National Institute of Standards and Technology and the recently published Best Practices for Victim Response and Reporting of Cyber Incidents developed by the U.S. Department of Justice include multiple recommendations regarding human resources policies needed to manage cybersecurity risks. As we have noted before, employees can be among the best protectors of employers’ critical information, or its worst threat.


Continue Reading Will Cybersecurity Best Practices Morph into Cyber Mandates?

The U.S. Court of Appeals for the Sixth Circuit recently affirmed the crucial importance of accurate plan summaries in the post-Amara world. To date, part of the legacy of CIGNA v. Amara has been an uptick of cases in which ERISA plaintiffs allege a material mismatch between a plan document and a summary plan description (“SPD”). Plaintiffs petition the court to use the broad equitable remedies available under ERISA § 502(a)(3) after Amara to reform the plan document to reflect the interpretation the plaintiff favors—even if the plan’s terms on the subject were crystal clear.
Continue Reading Reformation Claim May Proceed Despite Clear Plan Terms, Sixth Circuit Holds

In Lees v. Munich Reinsurance America, Inc., a federal district court in New Jersey recently held that an oral misrepresentation could serve as the basis for a fiduciary breach claim.

The plaintiff in Lees worked for American Re-Insurance Company (a predecessor of the defendant), but was being paid by a related entity. Several years