On May 29th, Tiger Woods was arrested in Florida for a suspicion of driving under the influence of alcohol. Wood’s arraignment charge was scheduled for Wednesday, August 9, 2017 but was then moved to October 25, 2017. Woods was not present at the courthouse and no plea was entered by him. When a defendant enters the first-offender program, the state will drop the DUI charge and the defendant must plead guilty to a lesser charge such as reckless driving. Once Woods enters the program, he must complete DUI school, probation, and there will be a ban on alcohol and drug consumption. The first-offender program does not expunge the defendants record, rather it shows up with no guilty conviction. If the defendant fails to complete the program, he will have a second-degree misdemeanor charge on his record. On May 29th, Woods was found sleeping in his 2015 Mercedes Benz on the side of the road. The vehicle was running and the turn signal was left on. Police reported a tail light not working as well as damage to the rear bumper. There were no signs of an accident or any property damage. When police approached Woods, he was unconscious and not wearing a seatbelt. Police woke the defendant up and stated that he was slurring his words. The defendant was cooperative and completed a field sobriety test. When asked if he had been drinking, he said no. Woods claims that he had a reaction to the medication that he has been taking for his back pain. Police performed a breathalyzer test and Woods registered a 0.000, and he also completed a urine test. Woods made a statement on social media stating that he was receiving professional help to manage his medication for back pain as well as his sleep disorder. Woods also announced that he completed an out-of-state private intensive program.
The LGBTQ was recently hit with a severe blow to their civil rights fight, when the United States Department of Justice reversed a decision that had advanced their protections. In a statement made to the U.S. appeals court, the Trump Administration reversed former President Barack Obama’s decision that federal law bans discrimination against gay employees.
Gay Employees Are No Longer A Protected Class
Issuing a friend of the court brief, the Department of Justice explained that Congress never intended for Title VII of the U.S. Constitution to apply to gay workers. The amendment mentioned in the 2nd U.S. Circuit Court of Appeals briefing refers to a clause that prohibits acts of sexual harassment in the workplace.
The briefing also called into question the authority of the U.S. Equal Employment Opportunity Commission, a federal agency which has been advocating against discrimination and harassment of employees on the basis of sexual orientation. The Justice Department urged the court to stop deferring to the Equal Employment Opportunity Commission in matters related to gender identity and orientation.
It has been noted that this brief was issued only a short time after President Trump issued his ban of transgenders in the military, but Justice Department spokesman Devin O’Malley says the brief was instigated by other concerns. Specifically, Mr. O’Malley cites rulings from 10 high level appeals courts, which back up the claims made by the justice department.
Donald Zarda Initiated A New Discrimination Lawsuit
In writing the brief, the Department of Justice denied the court’s authority in expanding upon laws established by congress.
The statement was issued in support of Altitude Express Inc., a New York based skydiving company facing a civil suit from former employee, Donald Zarda. In the suit, Mr. Zarda claimed that he was fired by the company, after revealing that he was gay to a customer. When the customer complained to management, Donald was fired.
A short time after filing the suit, Mr. Zarda was killed in a skydiving accident.
The Justice Department’s statement says sexual discrimination only applies to gender and not orientation. Citing an example, the brief states that an employer would be guilty of discrimination through the termination of all male employees or all female employees.
According to the statement, discrimination is based on sex, where as an objection to homosexuality is based on personal or religious belief. There is currently no law prohibiting discrimination based on moral or personal objections, stated the U.S. Department of Justice.
Donald Trump took to Twitter again to announce barring all transgender individuals from serving in the military. The tweet stated people who are transgender cannot serve in the military in any capacity. Trump also stated that he came to the decision after consultation with his generals, military experts and legal professionals.
According to Trump, the military’s only focus should be “decisive” and “overwhelming” victory over enemies of the United States. The tweet went on to say that the medical costs and disruption over allowing transgender individuals to serve in the military is too much of a problem. According to FindLaw.com, members of Defense Secretary James Mattis’ staff were not aware of this ruling and were caught by surprise.
The defense department refuses to release statistics on how many transgender Americans currently serve in the military. However, estimates by Rand Corp. show that 2,500 to 7,500 people who are transgender currently serve on active duty and another 1,500 to 4,000 are in the National Guard or the reserves.
Many of Trump’s critics immediately responded to the action, calling it “cruel and arbitrary”, and a ridiculous attempt to humiliate transgender Americans. Members of the LGBTQ community call the decision “absurd” and another overstep by Trump. An organization that represents the LGBTQ community in the military threatened legal action if the Trump administration does not immediately reverse the decision. Outserve-SLDN stated that many transgender Americans currently serving have not caused any problems or issues, and those individuals often consider the military a last resort for gainful employment.
Conservative lawmakers and Trump supporters applauded the decision, calling it the first step in eliminating the need to use the military for social experimentation. Ash Carter, the former secretary of defense under President Obama, ended the ban on transgender individuals serving in the U.S. military on Oct. 1st of last year.
At one time, becoming a lawyer was one of the best careers that anyone could choose. However, many law students today are graduating into a market that is saturated with new graduates. This is concerning for several reasons. First of all, some people are not going to be able to land jobs in their field. In addition, this is going to prevent people from joining the field in the future as wages go down.
Law school costs a lot of money to complete. With some of the changes that are taking place in the market today, many people are struggling to get to a new level. The worst combination is a bad job market with a lot of debt. Here are some of the issues that law students are facing.
One of the biggest issues with going to law school is all of the debt that students take on. There are a lot of students today who are graduating with record levels of debt. The good thing about becoming a lawyer is that the starting salaries are usually really high. This makes the payoff process a lot easier in the future.
The problem is that many students are not getting those jobs that they did in the past. Many students cannot afford to buy a home or start a family. There is an entire generation of people who are now stuck financially because of what is going on in the job market. In the coming years, it is vital for law schools to start addressing these issues.
Finding a Job
It can be difficult to find a job in this field. However, there are several things that you can do today to stand out from other job candidates. In the coming years, the jobs problem is only going to get worse. Students should start working in an internship as soon as they can in order to have success landing a job after graduation. Getting practical experience is one of the best things that anyone can do during this time.
The trends in the legal job field look bleak. A lot of students who are currently in school are looking for other careers to take on. With all of the changes happening today, it is vital for students to continue looking for ways to improve their financial position by landing a great job in their chosen field.
In today’s unpredictable and competitive employment market, one common concern among employees everywhere is severance pay. Although many people believe that professional jobs automatically come with severance pay, this is not always the case. For those who are job hunting or are concerned about being fired from a professional job, it is important to understand how severance pay works and when it is applicable.
Severance Pay And The Law
Not all companies are not required by law to provide severance pay. If an employee leaves a job voluntarily, the Fair Labor Standards Act mandates that the worker must be paid his or her wages through the date of completion. Also, the worker is entitled to be paid for any vacation accrual. A severance sum is not mandated by the FLSA. Employers may offer severance pay if they choose to do so. It may be offered to employees on a certain level or all employees of a company. If severance is paid, it is often paid through an agreement between the employee and the employer or a union.
In the event of a mass layoff, employers are required by the Worker Adjustment and Retraining Notification Act to notify workers 60 days in advance. If the employer does not or cannot provide notice within that period, the employer is required to pay the workers their regular salary and benefits for 60 days. For example, a company that is closing in 30 days and must lay off workers would still have to pay the workers for 30 days beyond the closing date. If a company promises severance pay in its employee handbook or through an employment contract, the company is required to honor its commitment. Employees who receive a severance benefit are usually required to sign a contract from the employer that liberates the employer from any future legal claims or liabilities.
Another common requirement that accompanies severance release forms is an age discrimination release form. Anyone who is over the age of 40 is usually required to sign this form since some people file lawsuits under the Age Discrimination in Employment Act. Employees who are over the age of 40 and are presented with a severance option have 21 days to decide whether or not to accept the offer under federal law. However, employees have 45 days to consider the offer if more than one person is being laid off at the same time and at least two of the workers are over the age of 40. This is because more than one person being laid off at a time is considered a group layoff.
How Severance Is Paid
Most large companies offer severance in the form of one lump payment. In some instances, severance is calculated based on continuing salary for a certain period. When this is the case, severance may be distributed in several payments. A lump sum is the best option to accept if an employer offers multiple choices for payment. When payments are received in multiple increments, some employers provide a larger payment upfront followed by diminishing payments until there is nothing left to pay.
One benefit of receiving multiple payments is continuing health insurance. In some instances, an employer will pay the severed employee’s health coverage until severance pay runs out. Employees can ask about this before accepting a payment structure. Although workers are often allowed under the Consolidated Omnibus Budget Reconciliation Act to continue receiving health benefits from a former employer for up to 18 months, they are usually required to pay the premiums themselves. Many group plans have expensive individual premiums. Some workers who know that they will be laid off may be able to negotiate with an employer to have the company continue paying for health benefits for a certain period.
When calculating severance pay, employers usually base it on the worker’s salary and invested years. For example, many large companies that employ top-level executives offer about three weeks of severance pay for every year of work. This means that an executive who worked for a firm for 10 years may receive a severance package that includes between 25 and 30 weeks of pay. For lower-level employees, severance pay is usually equal to less than two weeks of pay for every year spent at the company. In many instances, severance pay comes with a year number cap. This varies from one company to another and may also vary based on an employee’s position.
Severance pay is taxed. Receiving a lump sum could put a person in a higher tax bracket. Many workers benefit from contacting a tax professional before accepting a payment option when they are presented with more than one choice. When being laid off, workers can also try to recoup reimbursement for travel expenses, sick time or unused vacation time. Additional benefits such as 401(k) contributions and others may be kept by the employee.
About Jeremy Goldstein
Jeremy Goldstein is a partner at Jeremy Goldstein, LLC. His firm serves the greater New York City area. Mr. Goldstein earned a bachelor’s degree in history from Cornell University in 1995. He earned a master’s degree in history from the University of Chicago in 1996. In 1999, he earned his law degree from the New York University School of Law. Jeremy Goldstein volunteers his time as a director at Fountain House in New York. The non-profit organization helps men and women receive treatment for mental health issues.
In the past, Mr. Goldstein served as a partner for 14 years with another firm. He gained valuable experience in executive compensation with a focus on issues related to mergers and acquisitions. Additionally, he has extensive experience in executive compensation in relation to corporate governance. Jeremy Goldstein is also a member of several prestigious associations related to corporate governance and executive compensation.
Jeremy has contributed before on our blog. Read his opinions on stock options for employees: https://thereisnoconsensus.com/jeremy-goldstein-explains-knockout-options-help-employers/
There is an interesting article on the Reuters website about how the Supreme Court of the United States has made an important ruling concerning in what states plaintiffs may file injury lawsuits against corporations. The court made an 8-1 decision to put limits on where lawsuits can be filed, which is good news for companies that want to prevent plaintiffs suing them from picking the most advantageous state. More specifically, the case involved out-of-state plaintiffs suing Bristol-Myers Squibb in California although the alleged injuries by the pharmaceutical company did not all occur there and the company is based elsewhere.
The ruling was good news for the Johnson & Johnson company, which is being sued in Missouri state courts despite the corporation being headquartered in New Jersey. Furthermore, a similar ruling by the Supreme Court on May 30th regarding out-of-state plaintiffs suing Texas-based BNSF Railway Co. will likely make corporations more secure that they won’t be sued in states where they are not based. As always, however, plaintiffs retain the right to bring cases against corporations in whatever state they are located. Therefore, the ruling limits the ability of plaintiffs to “shop around,” but it is still very possible to hold corporations liable in court when they are at fault.
The lone dissenting justice was Sonia Sotomayor. Essentially, she feels that the ruling puts too much burden on people who have suffered at the hands of negligent companies. She appears to believe that, because corporations sell products all over the country and not just in the states where they are based, they should be held accountable wherever their products do harm. In the Bristol-Myers Squibb case, the company actually sold nearly one billion dollars of their drug Plavix – the drug alleged to have done harm – in the State of California, so the suit was brought in that state.
Unpredictability in the work place has become harsh reality for many workers. We now have a gig economy, and it is growing rapidly and changing the nature of the employer-employee relationship. According to a report from the Government Accountability Office, gigs now comprise 40 percent of these nontraditional jobs.
In a report by Entrepreneur.com, the emergence of the gig economy is the result of changes in the work environment. According to a survey from the Pew Research Center, millennials wanted to focus more on satisfying themselves, having more free time and having more control and flexibility over their work schedules. As a consequence, employers cut back on medical coverage, retirement plans and many other benefits from social safety nets.
The recession from 2007 through 2009 brought another reality problem. Employers began to hire more people as independent contractors to save money. These jobs did not offer vacation days, workers’ compensation, paid sick leave, retirement programs or death benefits for anyone killed on the job. As the unemployed scrambled for jobs, these temporary gigs were often the only jobs available.
The Department of Labor regulates employers to make sure they are in compliance with federal and state labor laws. There are minimum worker safety standards established by the Occupational Safety and Health Administration. These regulations protect workers by defining safe workday time limits, creating mandatory rest breaks and obligatory reporting of accidents. Violations of these regulations will subject employers to serious penalties.
Gig employees are not provided with these same safety protections. There are no limits for hours at work and no mandatory rest breaks. The absence of these controls can subject gig workers to exhaustion and fatigue.
Employers do not like to train gig workers because this could be construed as exercising too much control over them, and they could become reclassified as full-time employees entitled to all benefits. This absence of training can lead to an unsafe work environment.
Employers do not get to decide who is an independent contractor and who is a full-time employee. There are laws and court rulings from cases that define the characteristics of a gig worker.
The case of S.G. Borrello & Sons, Inc. v. Department of Industrial Relations established the criteria in 1989 for determining which workers are independent contractors. This case considered who controlled the details of the work, who provided the tools needed for the job, the form of payment and the length of the term of employment. These factors have become the tests applied to gig workers to determine whether the employer is obligated to provide benefits or not.
One of the biggest issues facing students today is student loan debt. A lot of students are going into a career field that they believe will lead to high pay and great benefits. However, a lot of these industries are not growing at all. There are many people who are struggling financially because of this.
At one time, becoming a lawyer was one of the best things that any young person could do. However, a lot of people today are finding that the legal industry is saturated with people who have already graduated from law school. It is vital for students to understand these trends before they spend all of that time and money trying to get a job in this field.
Cost of School
Any additional degree program is going to cost a lot of money. The biggest problem with law school is that it is long and costs a lot of money. Just because a student graduates from law school, this does not mean that they will pass the BAR exam. Not only that, but passing the exam does not guarantee a job in the field.
Over time, students have to look at the cost versus the benefits of getting what they want. There are many people who are excited about the changes that are going on in the industry today, but these changes are not necessarily great for new graduates.
There are a lot of students who are graduating from law school with high levels of student loan debt. This becomes a major financial issue for them later on in life. Not only that, but many graduates end up joining a different field where the pay is not as high. For many graduates, they are stuck with student loan payments without having a high salary. This is not a good place to be in, especially when it comes to buying a home or raising a family.
In the coming years, many people are hoping that the overall cost of college will go down. However, few people actually think that this will be the case. Many students are tired of paying high fees just to get a law degree without having better job prospects.
There are many people who believe that the legal field is going to have a shortage of graduates in the years ahead. It will be interesting to see how the industry responds.
Do you operate a Pennsylvania business? There are a few things that you need to keep in mind regarding your workforce. Although labor laws are constantly evolving, it’s critical that you stay ahead of the curve. Here’s how employment regulations influence your compliance obligations and corporate future.
Critical Laws That Impact Pennsylvanian Companies
Employment law has a broad scope that touches on a vast range of practices. Some of the regulations that bind you may be specific to your industry or business model. For instance, if you employ legal minors, or individuals under the age of 18, then you’ll need to adhere to the Pennsylvania Child Labor Law, or CLL.
Other provisions are more broadly applicable regardless who’s in your workforce. Understand these critical rules:
Minimum Wage and Labor Practices: The Fair Labor Standards Act
This law, also known as the FLSA, lays down the rules for when you need to pay your employees minimum wage. It also covers overtime, your tabulation and recording of work hours, and your duty to post FLSA requirements visibly at your premises.
Although the FLSA governs the minimum wage, it’s important to remember that these federal rules don’t override state laws. For instance, as of June 2017, most Pennsylvanian workers who earned minimum wage received the same $7.25 hourly rate that the FLSA set. Since 2016, however, individuals who worked for the state’s government or contractors that bid on state jobs earned $10.15 when making minimum wage. If you’re unsure whether you need to pay federal or state minimum wage, the general rule is to pick the higher of the two.
The Family and Medical Leave Act
Also known as the FMLA, this federal law ensures that eligible employees are allowed to take leave when it’s related to their family or medical needs. During someone’s FMLA leave, you don’t have to pay them, but you can’t penalize them by firing them from their job or cut back their group health insurance eligibility.
Employees covered by the FMLA may take as many as 12 weeks of unpaid leave per year. Valid reasons for taking leave include when workers
- Need to care for their children, parents or spouses who have serious health problems,
- Are having a new baby or need to care for one who was born less than a year ago,
- Are adopting or foster parenting a new child,
- Can’t perform their job due to their own serious health issues, or
- Have military spouses, offspring or parents who get injured.
The Age Discrimination in Employment Act
Employees are getting older, and employers must afford elderly workers the same rights that they’d grant their younger counterparts. If you fail to do so, you could face discrimination lawsuits or fines.
The Age Discrimination in Employment Act, or ADEA, dates back to 1967. It was originally intended to stop bosses who employ more than 20 people from discriminating against workers above the age of 40. Navigating this law isn’t as simple as determining whether you meet these basic tenets, however. For instance, if you operate a consumer research organization, then you may have a valid reason for restricting certain employment offers based on applicants’ ages or other demographics.
The ADEA applies to government institutions and contractors. As workforces grow progressively older, however, legislators may expand the law to protect more employees.
IRS Worker Classification
Should you withhold income and Social Security taxes from your workers’ paychecks? There’s a big difference between part-timers and independent contractors. Bodies like the IRS apply various rubrics to gauge how much control you exert over your workers and determine whether they should be classified as employees.
It’s critical that you understand these distinctions so that you don’t fall afoul of tax regulations. Also, remember that the federal unemployment taxes, or FUTA, that you must pay the IRS are separate from the sums required by the state’s unemployment contribution law.
Hiring, Harassment and Discrimination: Equal Employment Laws
While the federal Equal Employment Opportunities Commission, or EEOC, may be the first agency you think of when it comes to employment discrimination claims, it’s not the only body with jurisdiction. The Pennsylvania Human Relations Commission, or PHRC, also fields claims, and the state’s Human Relations Act may mean that you’re subject to anti-discrimination guidelines that the EEOC excludes.
The PHRC typically deals with companies that have between 4 and 14 workers, but the EEOC handles enterprises with at least 15. Both prohibit hiring and employment discrimination based on protected classes, like race, religion, sex, national origin, disability and age.
In addition to state-level laws, federal legislation and rules that only impact your industry, you may be subject to statutes imposed by your city, county or township. For instance, in 2017, Philadelphia barred employers who do business in the city from asking about new hires’ wage histories.
Employment law is exceedingly complex, but this isn’t an excuse for falling behind. Many small business owners find it helpful to consult with legal experts about their obligations.
More by Karl Heideck: Career Spotlight: Litigation with Karl Heideck
About Karl Heideck
Karl Heideck is a Philadelphia-based contract attorney who works hard to help businesses do right by their employees. Karl Heideck firmly believes in assisting firms that strive to adhere to the spirit of the law and not just its letter.
Karl Heideck has practiced in various fields of employment and contract law for more than a decade. In addition to coming directly to the aid of companies that would otherwise struggle to master the complex nuances of their regulatory obligations, he routinely contributes to online news sources and blogs by explaining the evolution of Pennsylvanian law and its impact on businesses.
During the time he spent as a Pepper Hamilton LLP project attorney and a Conrad O’Brien associate, Mr. Heideck gained invaluable experience fighting for enterprises and individuals alike. Karl always looks forward to applying his exhaustive knowledge in challenging new cases.
The passing of the Financial CHOICE Act (H.R. 10) on June 8, 2017, along House party lines aims to replace and repeal several clauses of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The Financial CHOICE Act is a big reform for financial regulation which will contain possible amendments to section 36(b) of the 1940 Act that will raise the burden of proof and heighten the standards of pleading for plaintiffs in situations of litigation fee that are excessive. It was passed 233-186 along the party divide.
Investment advisers face a fiduciary duty imposed by section 36(b) instead of the compensation they receive for the advisory services they provide to funds which give the shareholders of the funds a private action right to enforce the duty against all the affiliates and their advisers who receive the compensations from the funds. By a preponderance of the available evidence, the burden of proof will be on the plaintiffs who will be required to show that the fee they pay for advice is excessive. In other words, they will need to give evidence that the services the defendant rendered and the fee charged are so disproportionate that they do not bear any relationship, and that the negotiations could not take place at an arm’s length.
Therefore, the Financial CHOICE Act will impose a requirement that under Section 36(b) any complaint brought should state all the peculiar facts that establish a breach of fiduciary duty, and to prove that if any such alleged facts are based on existing beliefs and information, the complainant shall use all means to state the peculiarities on which the facts and opinions are based or on which the opinion are formed. Apart from the raised or stricter standards of pleading that the complainants will have to face, the plaintiffs will also be confronted by heightened burden of proof imposed by the Act from a state of legal “preponderance of the evidence” to a legally acceptable state of “convincing and unequivocal evidence.”
The new rules will not make the playing field any simpler for all the parties involved, and in the event of a process of litigation, it is clear that the cases will be long-drawn and complicated. Under the Financial Choice Act, the shareholder of a fund will have the burden to prove that there was a breach of fiduciary duty by convincing and clear evidence.
The travel ban, or immigration pause as the lawyers are calling it, has been held up in court once again. As this is being weighed, Donald Trump visited the Supreme Court this last week to attend the appointment of his newly-appointed justice, Neil Gorsuch.
Donald and Melania Trump attended, but did not speak at, the event honoring the appointment of Gorsuch to the nation’s highest court. Justice John Roberts offered Trump favorable words in his opening comments.
Gorsuch has been the subject of controversy for some time, since the only reason he was able to be appointed was that the Republican-led Senate refused to consider Obama’s pick for justice, Merrick Garland, for most of last year.
As the 5-4 conservative majority is now restored, things may be looking up for Trump’s travel ban which is slated to be weighed by the justices on its constitutionality. The court is also looking at a request to allow the ban to go into effect preemptively until litigation can be thoroughly carried out. It’s possible that Gorsuch may be the linchpin in these proceedings in favor of the Trump administration.
Federal judges in Hawaii and Maryland have blocked the travel ban, calling it unconstitutional and clearly a religious ban, despite the rhetoric of the Trump administration. The appeals process has now sent that up the pipeline to the Supreme Court and its newly-appointed justice.
While justices are supposed to be apolitical and judge solely on the legality of a matter, the fact of the matter is the political and judicial worlds are far more entangled than many may think. A justice newly appointed by Trump may also be more likely to assist in pushing through a Trump agenda, but there’s no way of knowing for sure until litigation is completed.
The Trump administration currently has a lot of legal battles to fight. Trump is also under investigation by a special committee for obstruction of justice in his recent firing of James Comey.
In recent years, numerous corporations have decided to stop providing employees with stock options. Some firms did so to save money, but the reasons are usually more complex. Three major problems frequently persuade companies to curtail these benefits:
- The stock value may drop significantly and make it impossible for employees to exercise their options. Nonetheless, businesses still need to report the associated expenses, and stockholders face the risk of option overhang.
- Many employees have become wary of this compensation method. They know that economic downturns often render options worthless. These benefits may seem to resemble casino tokens more than cash.
- Options result in considerable accounting burdens. The relevant costs may eclipse the financial advantages of these derivatives. Staff members don’t always consider this benefit as valuable as the higher salaries that an employer could pay if it was eliminated.
Nevertheless, this type of compensation can still be preferable to additional wages, equities or better insurance coverage. Why? It’s relatively simple for staff members to understand stock options. They provide something of equivalent value to all employees.
Furthermore, options only boost personal earnings if a corporation’s share value rises. This encourages people to prioritize the company’s success. The staff may work harder to satisfy existing customers, attract desirable clients or develop innovative services.
Certain Internal Revenue Service rules make it considerably more difficult to supply employees with equities. This is especially true when companies develop compensation packages for top executives. Businesses may face greater tax burdens if they provide shares rather than options.
If a firm wants to continue awarding options to employees, it can gain the above-mentioned benefits and avoid excessive costs by adopting the right strategy. It must take steps to minimize overhang as well as initial and ongoing expenses.
The best solution is to embrace a type of barrier option known as a “knockout.” These stock options have the same time limits and vesting requirements as their conventional counterparts. However, employees lose them if the share value falls under a specific amount.
A staff member might receive an option that has a five-year term and allows her to buy stock at the price of $150 per unit. If it’s a knockout option, it would probably expire when the company’s share value drops to less than $75.
It wouldn’t make sense to eliminate these benefits merely because the price plunges for a few hours or days. Employers can avoid this problem by only canceling them when the share value remains low for at least one week.
If a firm’s stock is comparatively volatile, the knockout mechanism will probably reduce initial accounting costs. This holds true because each option remains valid for a shorter period of time.
When corporations supply knockout option benefits, non-employee investors don’t face overhang threats from options that no one can actually exercise. This means that existing stockholders have fewer worries about shrinking ownership shares.
Knockout clauses often result in lower executive compensation figures on yearly disclosure documents. This causes a company’s annual proxy to reflect earnings more accurately. It also looks better to shareholders.
This solution gives employees a strong incentive to prevent a firm’s stock value from dropping below the forfeiture threshold. Staff members know that they can earn more when the share price soars, but they’ll completely lose this benefit if it plummets.
Knockout options don’t solve every problem, but they banish many of the biggest obstacles associated with stock-based compensation. Nonetheless, it’s crucial for company officials to communicate with auditors about the ramifications of supplying these options to employees.
Businesses may benefit from waiting more than six months to provide new options after the existing derivatives expire. Otherwise, the replacements might have a negative impact on the quarterly financial statement; accountants must treat the costs as repricing expenses.
When corporations need legal advice regarding employee benefits, they often turn to attorney Jeremy Goldstein. He has over 15 years of experience as a business lawyer. Goldstein independently established a law firm in New York after working as a partner at a similar organization.
He has played important roles in major transactions that involved top companies like Verizon, Chevron, AT&T, Duke Energy, Bank One and Merck. Goldstein serves on the boards of a prestigious law journal and a nonprofit known as Fountain House.
The Financial Services Committee in the Republican-controlled House of Representatives laid the groundwork for a full-scale roll back of Obama’s Dodd-Frank. The House made its move on June 1st when it approved a bill to repeal significant parts of Dodd-Frank that put restrictions on Wall Street’s freedom of movement.
Originally, the Dodd-Frank Wall Street Reform and Consumer Protection Act put major regulatory controls of Wall Street’s financial maneuvers in the hands of government regulatory oversight. Dodd-Frank’s replacement bill, known as the CHOICE Act, was put forward by Texas Representative and House Chairman of the Financial Services Committee, Jeb Hensarling, on June 1st.
The vote was close at 34 approving to 26 disapproving the measure to repeal and replace Obama’s Wall Street regulations. Everyone on the Financial Services Committee voted on the bill and, unsurprising among a divided Congress, not one democrat voted with the Republican majority to support the regulatory overhaul.
Debates raged into the night for three days and republicans unrelentingly blocked amendments from House Financial Services Committee members from affixing amendments to the CHOICE Act. The CHOICE Act is undeniably a Republican creation, and republicans were loathe to allow democrats to insert amendments that would have safeguarded key components of Obama’s Dodd-Frank. The vote on June 1st went entirely down party lines.
Republicans have argued that Dodd-Frank has choked growth since its inception. Although the claim is difficult to prove, republicans also asset that Dodd-Frank has hamstrung the banks’ ability to extended credit and limiting choices across the board. Hence, the name: the CHOICE Act. Republicans are hoping to rectify the problems they see riddling the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The CHOICE Act would sidestep the problem of overleveraged banks by allowing banks that had enough liquidity and cash on hand to avoid the most onerous regulations enshrined in Dodd-Frank. Dodd-Frnak also demanded stress tests for the banks to be undertaken quite frequently whereas the CHOICE Act limits stress tests to every two years. Supporters of the CHOICE Act are delighted; critics of the CHOICE Act feel the economy could move more quickly and the systemic risk expand quicker than a stress test every two years could detect.
Democrats are worried that repealing most of Dodd-Frank’s biting regulations at once could deregulate the financial markets too quickly and have unforeseen negative effects on the economy. Republicans counter that the CHOICE Act will create growth.
In an interesting turn of events a number of states and cities blighted by the recent opioid epidemic sweeping the country have started filing lawsuits against select pharmaceutical companies. Individual counties in states hardest hit by the opioid epidemic have also decided to file lawsuits against pharmaceutical companies like Purdue Pharma LP.
Legal experts claim that these lawsuits might have an uphill battle in the courts since all of the drugs in question are regulated by the Food and Drug Administration. This makes it much tougher for a state to allege that the addictive potential of these drug companies was downplayed or pushed aside by the pharmaceutical companies behind the opioid medication.
The most recent state to join the spate of lawsuits against pharmaceutical giants like Teva Pharmaceutical Industries Ltd. and Johnson and Johnson’s is Ohio.
Ohio in particular and other states more broadly are arguing that states have been losing revenue by filing unnecessary prescriptions. States are also seeking compensation for the costs associated with these medications as well as state-funded addiction treatment centers that received funds associated with the rising opioid epidemic.
Surprisingly, this legal battle between the states and five large pharmaceutical companies has a recent legal precedent. In 1998 over 45 states received more than $200 billion in compensation when the courts ruled that major tobacco companies downplayed the addictive potential of cigarettes in their packaging and advertisements.
The same sort of allegations are being made today by states, cities, and counties across the United States that feel their residents and state budget’s have been adversely affected by the claims that pharmaceutical companies have been making. Many states, including Mississippi, feel that patients weren’t informed of all the risks before filling their prescriptions.
Unfortunately, for plaintiffs like the state of Mississippi these lawsuits might be exceedingly difficult to win in court. The reason is twofold. First, plaintiff’s attorneys are rationally worried about the fact that one or all five of these pharmaceutical companies could be protected by the fact that these opioid medications had FDA approval before making it to market.
The second reason that pharmaceutical companies like Johnson and Johnson’s stand on fairly solid legal ground is that the warning labels on these medications clearly state the addictive potential of the drugs in question. A judge in Orange County California, furthermore, stopped a case due to fears that pending lawsuits would stymie long-term opioid treatment.
Law schools from around the country are starting to accept Graduate Record Exam (GRE) scores in lieu of traditional Law School Admissions Test (LSAT) scores. The reason is that many admissions committees feel that the LSAT requires a large time and financial investment to prepare for. The GRE is also less specialized but perhaps just as predictive of first-year success in law school.
The University of Arizona and, more recently, Harvard University have gotten on board with the plan to transition to the GRE for admissions purposes. Northwestern University in Illinois might be the next big-name law school to do so. Individual law schools as well as the American Bar Association’s Section of Legal Education and Admissions are taking a hard look at correlational studied before coming broader decisions that could affect the admissions criterion for all ABA-approved law schools in the United States.
Many legal experts concede that it may be a few short years before more law schools start accepting the GRE. It could be only a decade before every law school in the United States does so. Right now Northwestern is conducted a landmark study in partnership with the Educational Testing Service (ETS) in order to determine whether the GRE is as good a predictor of first-year GPA as the LSAT. If so, more law schools may consider taking on the GRE for admissions purposes.
Nearly three months ago Harvard said that it would transition over to the GRE. In statements, Harvard representatives and admissions personnel said that broadening diversity and eliminating barriers for low-income and underprivileged applicants were serious considerations swaying their decision in favor of allowing the GRE to influence application success.
Harvard undertook its own study with the ABA’s Section of Legal Applications and Admissions to find out whether the GRE or traditional LSAT proved a better predictor of grades in students’ first years. The study found that the GRE and LSAT were equally valid instruments for sussing out who makes the cut after the first year at law school. This is great news for students looking for more diverse entrance exams as well as the Educational Testing Service.
The hope is that by allowing the GRE to be used as an entrance exam more students of all backgrounds will apply to law school and remedy the problem of lower law school admissions across the board. Dozens more law schools may accept GRE scores.