The Impact of 409A on Severance Payments

Posted on February 27th, by Editor in Audits/Due Diligence, Counseling & Compliance Training. Comments Off on The Impact of 409A on Severance Payments

Editor’s Note: The following post by Katrina Veldkamp, Associate in the Los Angeles office, appears in the latest issue of the California HR Newsletter.  To sign-up to receive the California HR Newsletter click here.

The Impact of 409A on Severance Payments

The Issue: An employment agreement conditions severance payments to an executive on her signing a release. Can this create a tax problem for the executive under the non-qualified deferred compensation rules of the Internal Revenue Code?

The Solution: Yes, unless the provisions of the employment agreement are properly drafted and the parties comply with the terms of the agreement.

Analysis: Code Section 409A (409A) governs the terms and operation of “non-qualified deferred compensation plans” and imposes restrictions on the reasons for and timing of deferred payments.  Neither the employee nor the employer may accelerate or defer the receipt of deferred compensation (with some exceptions not applicable here).

Failure … Read More »


Forum Selection Clauses and Non-Compete Agreements

Posted on February 25th, by Editor in Audits/Due Diligence, Crisis Management. Comments Off on Forum Selection Clauses and Non-Compete Agreements

Editor’s Note: The following post by Kate Gold, Partner in the Los Angeles office, appears in the latest issue of the California HR Newsletter.  To sign-up to receive the California HR Newsletter click here.

Forum Selection Clauses and Non-Compete Agreements

The Issue: You are a California employer with out-of-state headquarters, and your executive works and lives in California.  Your employment agreement has a one-year post-termination non-compete. Can you enforce it?

The Solution: In general, no, but the answer may depend on whether you have a valid forum selection and choice of law clause that provides for resolution in a state that permits reasonable post-termination non-competes.

Analysis: In general, California employers cannot enforce post-termination non-competes and a party cannot circumvent California restrictions on non-competition with a choice of law provision designating a more non-compete friendly jurisdiction.  However, the Supreme Court’s recent decision in Atlantic Marine Construction Co.,
Inc. v. U.S. … Read More »


Obligations for Employers Before, During and After a Storm

Posted on February 18th, by Editor in Counseling & Compliance Training. Comments Off on Obligations for Employers Before, During and After a Storm

By: William R. Horwitz

As cleanup from the Nor’easter that pummeled the East Coast last week continues, and the prospect of more snow looms, we hope that you and your families, as well as your businesses and employees, are safe and warm and that the lights are on. As this has been one of the more problematic winters in recent memory, we wanted to remind employers of some of their obligations before, during and after a storm.

Temporary Closings

Unless your agreements or policies provide otherwise, you are generally not required to pay non-exempt employees when they are not working. Therefore, if your business is closed and your employees do not report to work, you are not obligated to pay non-exempt employees. However, make sure that these employees are not checking work e-mails, communicating with supervisors about work-related issues or otherwise working from … Read More »


Webinar – 2014 CFO Alliance Sentiment Study Results

Posted on February 12th, by Editor in Counseling & Compliance Training. Comments Off on Webinar – 2014 CFO Alliance Sentiment Study Results

Drinker Biddle partnered with The CFO Alliance to collect survey responses from a broad sample of more than 500 senior financial executives across the United States in order to provide insights into the strategic planning and financial outlook of these executives.

Please join Labor & Employment Group co-chairs Cheryl Orr and Tom Barton, along with several of their partners from across the firm, for a one-hour webinar presentation on the results of The CFO Sentiment Study followed by a live Q&A. Participation and feedback is appreciated, as we will be creating a series of live and online events, discussions, and other materials centered on the top issues and opportunities for business leaders.

Date: Thursday, February 20, 2014
Time: 1:30 p.m. Eastern

Topics include:
•     Human Capital
•     Technology
•     Growth
•     Economic & Political Outlook
•     Financing & Budgeting
•     Risk
•     Trade
•     Government Regulation




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