Further Analysis Of Dakota Access Pipeline’s Environmental Impact Ordered

The Dakota Access Pipeline has been a major source of debate in the political and environmental spheres as of late. Now, a U.S. federal judge had ordered that debate to continue.

U.S. District Judge James Boasberg in Washington determined that the U.S. Army Corps of Engineers did not analyze the possibility of a catastrophic oil spill to satisfactory levels. Such an oil spill could have negative effects on the livelihood of the Standing Rock Sioux tribe, he claims. The judge found that federal permits issued for the pipeline violated the law by not thoroughly completing this investigation.

As of now, the pipeline has not been stalled again, but pending the results of an investigation, it could find itself dead in the water again. The Corps will be required to resume their investigation and will need to reconsider certain aspects of its past investigation.

People on both sides of the issue are disturbed by this outcome. Those against the pipeline are upset that the pipeline hasn’t been definitively stalled to allow the investigation to run its course. Those in support of the pipeline are worried that the findings in the Corps investigation could persuade the court to take further action to dismantle the pipeline once and for all, killing their considerable investment.

The Corps themselves believe they will be able to persuade the court to allow construction to continue while they address the discrepancies in their analysis. They believe that the errors found can be addressed quickly and will not require much time or effort to warrant a halt to construction.

Donald Trump famously pushed the pipeline through with an executive order shortly after he was sworn into office. However, that rush he placed upon the Corps has now been found to be unlawful and may not only endanger the pipeline but come back to bite him politically as well.


President Trump Adds Lawyer From Washington To His Legal Team

The president has a new lawyer on his legal team now. He chose to add a veteran lawyer named John Dowd to his team. Mr. Dowd was added to represent the president in the recent allegations about the possible collusion in Russia with the Trump campaign. This investigation also includes the criminal probe which is being lead by special counsel Mueller.

Lawyer John Dowd has represented many white-collar criminal cases and will be in partner with other lawyers in Trump’s team which includes a defense lawyer from New York named Marc Kasowitz. Dowd is known for representing United State’s Senator John McCain during an investigation on congressional ethics charges in a bank scandal in the late 1980s to early 1990s. Mr. McCain was cleared on all charges in the matter and owed it to the hard work of Dowd.

The investigation including the President states that Russia denies any interference and that the White House denies to have had any collusion with Moscow in the situation. A special counsel is currently looking into the matter to find out whether Trump is trying to obstruct the investigation. Mueller is turning his investigation around to find if there are any possible ties between the government in Russia and President Trump’s campaign. There are allegations stating that some U.S. officials were meddling in the election in 2016.

James Comey, the former FBI Director, has testified earlier in the month that the president had asked him to stop the bureau’s investigation that is ongoing of Michael Flynn, the former national security adviser. Both the House Intelligence Committees and the Senate are performing their own investigations about the possible ties between the government in Russia and president Trump’s campaign. According to Reuters.com, the legal team for Trump are also expecting a new lawyer to be added for fighting these allegations on the president.

Suicide by text – Guilty!

Michelle Carter faces 20 years in prison after a Massachusetts judge found her responsible for the suicide death of her boyfriend, Conrad Roy III. Conrad killed himself in 2014 by Carbon Monoxide poisoning.

In presenting his rationale for the manslaughter conviction Judge Lawrence Moniz called Ms. Carter’s actions “reckless” with a “wanton” disregard. Ms. Carter opted for a trial by judge and rejected her right to a jury trial.

The case stems from a situation where Mr. Roy, a severely depressed young man, had told his girlfriend and confidant, Ms. Carter, that he wanted to die. He told her he was going to kill himself but wasn’t sure how he should do it. After research by himself and Ms. Carter it was decided he would kill himself by placing a generator in his vehicle and seal off any fresh air from the carbon monoxide.

Some say the guilty verdict in this suicide by text message is a “slippery slope” against free speech, assisted suicide, and that it muddles the water regarding criminal liability versus personal responsibility. Little focus was placed on earlier text messages where Ms. Carter initially suggested Mr. Roy get help and possibly go into a “mental hospital”.

“But the mental hospital would help you. I know you don’t think it would but I’m telling you, if you give them a chance, they can save your life,” she texted on July 19. 2014.

Roy, 18, committed suicide in 2014. The Massachusetts District Attorney held fast that had Ms. Carter contacted someone who could actually help, Mr. Roy would not have been successful. Their claim was Ms. Carter helped to instigate the suicide when, among other things, sent a text to Mr. Roy “ordering” him to get back into the vehicle and go through with it. She went as far as to text that his parents would “get over it”.

Now, 20 years old, Ms. Carter’s defense team presented expert testimony from Dr. Peter Breggin wherein he stated she was “involuntarily intoxicated” because of the anti-depressant she was taking. The expert explained it is an SSRI pharmaceutical Celexa and caused her to have “erratic” behaviors. The DA countered with its own expert who simply said there is no such thing as “involuntary intoxication” cause by Celexa.

The full accounts of the texts conversations can be read here




A Request from ABA to The Supreme Court to Insist on Funding Sufficiency for Investigations After a Conviction

In an amicus brief that was filed Friday by the ABA, the legal organization demands that the U.S Supreme Court must not admit the decision by the 5th Circuit Court of Appeals based in New Orleans that imposes stiffer customary conditions for investigating post-conviction claims. The PDF brief indicated the intention of Avestas Manuel Carlos to seek funds from the court for hiring a legal professional he thought should have been contracted by the first attorneys he engaged in the Avestas v. Davis hearing. When the Federal law establishes that there is a reasonable necessity for a defendant to be represented, then it permits the solicitation of funding.

A case that came to the limelight was in 2016 when the 5th Circuit set a precedent for individuals like Avestas who demonstrated a reasonable need for representation but could not meet the high cost or standards for legal representation without recourse to funding by the court for the development of the case. But according to the amicus brief by the ABA, the decision by the tribunal was “restrictive and circular and, therefore, it supported the argument. According to the amicus brief, the rule of “substantial need” requires the establishment of a viable claim on the merits of the case by the counsel before the circuit can permit the funding necessary for the investigation of the merits.

The brief noted that the attorneys should have carried out an adequate and independent verification of the facts to uphold Avestas’ argument that his initial counsel was ineffective and so did not meet the requirement of effective assistance. The views are supported by the Criminal Justice Standards and Death Penalty Guidelines by ABA. If the original attorney was ineffective, the brief highly recommends the need for further investigations because the required information might be contained in the records of the prior proceedings by the court. Failure to fund the experts or investigators, according to ABA Death Penalty Representation Project, often leads to ineffective assistance.

And the brief claims that are a problem because in the case like that of Avestas, the ruling by the 5th Circuit sets up a Catch-22 situation for the defendants because they cannot hire an investigator before furnishing the court with the same facts that the investigator would be expected to unearth. The standards are much higher than what the Federal Statutes prescribes. The brief concludes that such results prevent the attorneys from acting in consistence with the professional standards.

Cosby Case Called a Mistrial

Over the past few months, one of the most followed criminal cases in the world has been the case against Bill Cosby. Cosby, who is one of the most successful actors and comedians of all time, was charged with assaulting several women over the past twenty years. After several weeks of deliberations, and over a year of case preparation, the jury finally finished their discussions and announced a verdict (https://www.nytimes.com/2017/06/17/arts/television/bill-cosby-trial-day-11.html?_r=0).

While many people were expecting that the jury would be able to come to a conclusion, it appears that the 12 person jury has ended in a deadlock and was not able to come up with a conclusion. After the jury spent 50 hours discussing the case, the 12 people ended up declaring a mistrial.

The result of the case was a surprise to many people, but the lack of a decision was expected by others. While there were several different women that came forth, the lack of physical evidence made it hard for people to convict. It is believed that this is the main reason why some jurors were not willing to vote guilty during the deliberations.

While Cosby is now considered a free man, it is not yet clear whether his legal troubles are behind him. The prosecuting attorneys have stated that they will likely pursue another case against him, which is possible given the fact that it was a mistrial and that he was not proven not guilty. However, while the prosecutors may want to pursue another case, there is a chance that they will not be given the opportunity to do so by the state given the amount of resources that go into high-profile criminal cases.

At this point, the criminal legal process is still up in the air, but Cosby could still face some civil charges and convictions. Even though there was a mistrial in the criminal court, he could still be found guilty in the civil court system. While this would not result in a criminal penalty, it could result in a very severe financial penalty that he will be required to pay to the plaintiffs in any civil court trial.


Michigan Takes a Step Towards Allowed Concealed Carry Without a License

The Michigan House of Representatives recently passed a bill that removes permitting and licensing requirements for concealed carry in Michigan. The legislation now moves to the Senate. If it’s successful there it heads to Governor Snyder for consideration.

The bill doesn’t change the law that prohibits felons from owning or possessing a firearm. However, in addition to removing the permitting requirement, the bill also reduces penalties for failing to have identification and for failing to disclose the weapon to a law enforcement officer. There are a few other notable provisions in the bill including a repeal of the current law that prohibits security guards from carrying concealed except while they’re performing their duties. The law also removes firearms from the list of included weapons when a law or regulation prohibits possession of dangerous weapons.

Michigan law currently allows residents to openly carry without training or a permit. Some people say that requiring a permit for concealed carry but not open carry is unfair, and that it only creates costs and bureaucracy. Others say that regulations are justified because of ongoing struggles with gun violence and because training requirements improve gun use and safety. The vote fell largely on party lines with Republicans voting for the measure while Democrats opposed it.

Currently, a person who wants to concealed carry in Michigan must apply for a permit. The applicant must file the application in the county where they live. There are fees to pay, and a person must submit their fingerprints as part of the application process. They must complete a training course that teaches them how to use and care for their weapon.

In addition, an applicant for a concealed carry permit in Michigan may not be the restrained party in a personal protection order or have been found not guilty of a crime by reason of insanity. There are other requirements that prohibit people with certain criminal convictions from receiving a permit. There’s also a residency requirement for a successful application.

There’s no indication as to whether Governor Snyder would approve the bills. In 2012, Snyder vetoed legislation to allow concealed carry in gun-free zones like schools. Snyder vetoed that bill in the wake of the Sandy Hook shooting that took the lives of twenty students and six adults.

Source: Detroit Free Press: http://www.freep.com/story/news/2017/06/07/no-permit-training-needed-concealed-carry-guns-passed-house/378659001/

Supreme Court Rules for Veteran in Family Law Pension Dispute

The U.S. Supreme Court came down unanimously on May 15, 2017 in favor of a U.S. veteran. His ex-wife claimed that he owed her reimbursement for his waived retirement pay that the court awarded to her in the divorce. Justice Breyer authored the opinion in favor of U.S. Air Force veteran John Howell. The justices ruled that Howell doesn’t have to reimburse his ex-wife for waived pension pay despite the divorce judgment calling for the same.

John and Sandra Howell divorced more than twenty-five years ago. The judgment called for John to pay half of his retirement pay to Sandra. Since that time, John elected to waive portions of the retirement pay. For the waiver, he received disability pay instead. While a veteran pays taxes on retirement pay, they don’t pay taxes on disability pay. Because of the waiver, John’s disability pay was $250 per month less than his pension pay would have been.

Even though the divorce judgment calls for John to reimburse Sandra for the difference of $125 per month, the U.S. Supreme Court ruled that the provision of the divorce judgment is unenforceable. John doesn’t have to reimburse Sandra anything even though the waiver is his choice. Sandra is simply out the money.

The lower state courts ruled in succession in the former wife’s favor. They focused on making the ex-wife whole for what she lost because of the ex-husband’s disability election. The U.S. Supreme Court overturned the state rulings citing the federal Uniformed Services Former Spouses’ Protection Act (USFSPA). They said that the USFSPA allows a court to split disposable retired pay except any portion waived for disability benefits. They cited the prior case Mansell v. Mansell which concluded that the state courts can’t divide veteran disability benefits.

The U.S. Supreme Court ruled that states just don’t have the authority to divide disability benefits even if the result is that an ex-spouse doesn’t get what they expected. They also ruled that requiring reimbursement of the amount from one spouse to another isn’t a lawful substitute, either. Even though the court admits that the ruling might create a difficulty for former military spouses, they say that state courts always have the option to adjust spousal support.

Sources: http://www.scotusblog.com/2017/05/opinion-analysis-unanimous-court-rules-veteran-family-law-case/


Plaintiffs Continue to Join Larry Nassar Lawsuit

Plaintiffs continue to come out of the woodwork to join a lawsuit against former USA Gymnastics and Michigan State University employee Larry Nassar. Four more Plaintiffs have requested to join the lawsuit that accuses Nassar of ongoing, systemic, sexual abuse over a period of decades. Plaintiff filed a request with the court to allow them to amend the complaint in order to add the new plaintiffs to the case.

Although Nassar headlines the lawsuit, there are many people and organizations on the defensive including Michigan State University, USA Gymnastics, and Twistars Gymnastics Club which produced 2012 Olympian Jordyn Wieber. Most of the plaintiffs identify themselves as Jane Doe. In addition to Nassar’s abuse, the lawsuit alleges that the other accused organizations failed to take steps to protect the abuse victims and failed to properly respond to allegations about the alleged abuse. The lawsuit calls MSU deliberately indifferent to the allegations against Nassar.

Nassar faces criminal charges in the State of Michigan addition to the civil suit against him. The criminal charges allege sexual abuse as well as possession of child pornography. A preliminary examination bound Nassar over to the Michigan Circuit Court for trial on the criminal allegations.

While Nassar defends the charges against him, witnesses are doing their best to run from participation in the case. One of those witnesses running is former USA Gymnastics President Steve Penny. He got the court to postpone his deposition in the matter so that he could attend the Indianapolis 500 and network for job hunting purposes. Attorneys for the plaintiffs shot back that a party isn’t a good reason to skip a court-ordered deposition. Penny resigned as president of USA Gymnastics amid growing pressure from the gymnastics community and threats from the U.S. Olympic Committee to withdraw funding from the sport’s national governing body. Penny collected a golden parachute of approximately $1 million from USA Gymnastics.

Famed Olympic gymnastics coach Don Peters also wants the court to quash his subpoena for deposition in the case. Attorneys for the plaintiffs in the case hope that the deposition will provide insight on the matters relating to the allegations against the defendants as well as information about USA Gymnastics’ financial practices. Attorneys for Peters say that the deposition in the Nassar case is an abuse of discovery and an improper attempt to gain discovery for another case.




Attorney for banned gymnastics coach Don Peters seeks to quash subpoena

Anacapa Law Group Inc Finds Justice for Polluted Water Ways in California

MATTCO Manufacturing is an independently owned company that specializes in offering oilfield services. The manufacturing company was established in 1974 and has been a sole active provider of a plethora of products generated from custom tailored components. The products seek to complete the OEM solutions for pumps as well as draw works equipment companies. The company specializes in the primary production of three products namely: MATTCO, TTE, and Bear. The products originate from the United States of America. Useful as the products may be, the reports channeled to the court stated that this company has contributed to more environmental damage.


On 7th June 2017, an environmental group took the streets with the aim of suing MATTCO Forge Inc. The lawsuit stated that the company was violating the federal law. The community of California against toxics filed a major complaint against MATTCO Forge Inc through the district court of California. The lawsuit indicated that MATTCO Forge Inc was discharging storm water and channeling it to the waterways of Los Angeles. According to the statement released by the complainant, the environment pollution was beyond control, and the waterways were damaged beyond explanation. The plaintiff stated that MATTCO continuously discharges pollutants as well as contaminated water from the manufacturing facility. In turn, the discharge redirects into the waterways.


While pursuing justice, the plaintiff stated that it was important to summon the defendant to comply with the terms of compensation, monitoring as well as reporting requirements. The compensation strategies also included the defendant being ordered to pay up to $ 37,000 penalty per day. The payment was meant to be made from March 21, 2012, through November 2, 2015. The defendant, MATTCO, was also ordered to restore the original state of the water. This is because the company played a primary role in contributing to the damages. Apart from the two settlement schemes, the company was ordered to settle the attorney fees. Through the services of Jesse Colorado from Anacapa Law Group Inc, the state of California received compensation for polluted waterways.

Anacapa Law Group Inc

Anacapa Law Group is a law firm in California. The company has been of excellent service at seeking justice for the people of California. With a team of professional lawyers like Jesse Colorado, a lawyer specializing in environmental justice, Anacapa Law Group is dedicated to improving the California justice system by initiating justice. Since its establishment, the law firm has won several lawsuits geared towards improving the lens of justice in the society.

Source: http://ecologycenter.org/directory/directory-entries/california-communities-against-toxics-ccat/

Utah Signs Lowest Drunk Driving Limit in the United States

Americans know Utah for its beautiful mountains and its famed Mormon Tabernacle Choir, and now it’s famous for having the toughest drunk driving laws in the United States. On March 24, 2017, Utah Governor Gary Herbert signed legislation that lowers Utah’s drunk driving legal limit to .05. The state is the first in the country to move the legal limit down to .05 from the .08 limit that exists currently in the rest of the country. The new law doesn’t take effect immediately but instead begins on December 31, 2018.

Tourist and hospitality groups oppose the measure, worried that tourists may take their dollars elsewhere because of the change. Tourism and commerce groups say that they expect a decline in revenue as the new measures may prompt people to avoid alcohol completely. Herbert says that the law isn’t about drinking but rather road safety. Herbert says that the law is simply good public policy. He believes the law is going to save lives.

Legislators expect more fine tuning before the law goes into effect. Among the topics for discussion are what the penalties should be when a person has a blood alcohol level of at least a .05 but lower than a .08. Some say reduced penalties are appropriate in a case like that. Commerce groups want to see the state completely delay implementation of the law until other states follow suit. Both sides say now that the law is official they’re interested to work together to tweak the law’s finer points.

The National Transportation Safety Board has advocated for lowering legal limits for several years. They say that the evidence shows that a person’s ability to drive becomes impaired by alcohol long before they reach .08. They say that by the time a person’s blood alcohol content reaches a .08, their risk of a fatal crash has already doubled.

In the rest of the United States, the legal limit remains .08. However, commercial drivers in most states face a lower drunk driving limit. For these drivers, stiffer penalties for drunk driving and a lower legal limit are already the norm.

Governor Herbert dismisses those who call the measure religiously motivated. He points to Rome as another location that uses a legal limit lower than .08. Herbert says that Rome doesn’t have a large Mormon population, and their legal limit is similar to Utah’s new legal limit.

Sources: http://www.washingtontimes.com/news/2017/mar/24/utah-governor-signs-bill-lowering-blood-alcohol-li/


Massachusetts Mulls Changes to State Marijuana Laws

As it stands right now in Massachusetts, you can smoke it, but you can’t buy it. Although voters approved a 2016 bill that decriminalizes possession of marijuana for recreational purposes, it’s still very much illegal to purchase marijuana from someone else. Lawmakers struggle to amend the law while marijuana advocates worry about straying too far from the original intent of the voters. In addition to possessing marijuana, Massachusetts residents can grow marijuana for their own use. They can also smoke it.

The state is preparing for a big change as licensed marijuana retailers can soon manufacture and sell marijuana in the state. Some say this system of retail sales only creates taxation and hurts people who grow their own marijuana. The retailers can’t start selling until 2018.

Lawmakers are thinking about raising the legal age for marijuana use to twenty five. This would be a significant change from the current legal age of twenty one. Lawmakers also say that higher taxes on marijuana sales are more appropriate than what the law currently calls for. They say that other states tax marijuana at far higher rates than Massachusetts. The law voters passed in Massachusetts taxes marijuana at less than four percent, while the State of Washington taxes marijuana at a rate of thirty-seven percent. Lawmakers who support the changes say that higher taxes could fund social service programs such as job programs for teens or substance abuse treatment.

Opponents of the tax increases say that pushing the taxes upwards can nudge consumers towards other options or substances. They say that it’s only going to lead to a black market or send consumers to other states for purchases. They say that Maine’s rate is ten percent, and Massachusetts shouldn’t make its own rate too much higher, or the state won’t be competitive. Proponents counter that lowering the household plant limit that currently sits at twelve plants can offset some of these concerns and encourage commercial purchases. They also say that they have no intentions to completely change the intent of the voters.

Lawmakers expect to finalize proposals in the next few months. There are a number of ideas on the table including establishing a legal limit for driving while marijuana is active in the driver’s system. They also say that marijuana-laced candy and other edibles need regulation. Lawmakers also want to look at giving local authorities more control over locations and rules for marijuana retail locations.





Advocates protest possible changes in marijuana sales law

Trump’s Legal Team goes after James Comey

The Trump legal team has said that it has filed a complaint about James Comey, the former FBI director. The legal team led by his personal lawyer Marc Kasowitz said that this will be done through the department of justice office and will be addressed to the inspector general. Trump’s legal team are accusing the former FBI director of leaking a conversation with the president of the United States. He is also accused of leaking important memos regarding these conversations. This information was provided by a source close to the president’s legal team. This complaint will not only be sent to the department of justice, but it will also be sent to the Senate Judiciary Committee. Kasowitz said that the draft sent to the Senate committee would consist of other issues other than leaking conversations.

This comes after the president of the United States accused Comey of being a leaker and giving false statements about the president. Trump legal team had accused Comey of handing his memos to a close friend with the aim of circulating them widely. However, Comey did not deny these allegations and said that he had shared the memos. He said that he felt compelled to reveal the memos to the public and this is why he asked a friend to share the memos. The said friend then shared them with a reporter. However, Comey said that he refused to share the memos because of various reasons that he could not disclose.

Legal experts say that the former FBI director did not commit crime through the act of revealing the memos. Legal experts say that it would only have been a crime if the reports were classified which was not the case. However, legal experts also say that he violated norms that had existed for a long period and thus acted improperly. Mr. Trump’s legal team say that Comey had leaked the documents earlier as New York Times had referenced the memos a day earlier. They accuse him of revealing thees documents as a retaliatory move to the fallout with the president. However, it has also been proved by independent legal experts that Trump’s legal team was not honest and gave an inaccurate chronology.

Comey was threatened by a tweet by the president who said that there might be some recordings of the proceedings cautioning Comey to be selective about what he says. The memos that Comey shared were leaked to the media by a Columbia Law Professor.

Eric C. Conn Disappears Before Disability Fraud Sentence

The locals called him Mr. Social Security. He drove a Rolls Royce and sat on the United States Social Security Advisory Board. His televisions commercials were almost legendary in Pikeville, Kentucky.

Today, he’s nowhere to be found. Law enforcement is looking for Eric C. Conn, the once-hailed Pikeville attorney. In March, he pleaded guilty to charges relating to a Social Security fraud scheme that cost taxpayers $500 million.

Conn awaited his upcoming sentence on bond but had to wear an electronic monitoring device. As of June 3, 2017, law enforcement has no idea where Conn is. He removed his electronic device and disappeared.

The charges against Conn include stealing from Social Security and bribing a judge to approve disability claims for his clients. He faces twelve years in prison if police ever catch up with him and possibly new charges for running from justice. As part of the plea he agreed to pay $5.7 million to the U.S. government and another $46 million directly to Social Security. He also owes another $12 million and $19 million in damages and penalties because of two Social Security employees who tried to blow the whistle.

Conn’s con used a doctor who agreed to create bad medical reports for his clients. Then, the judge signed off on the fraudulent applications for a cut of the action. The judge and doctor face charges, too. Suffice it to say that Conn’s legal practice, which he began in 1993, is over.

State’s attorney Ned Pillersdorf says it’s not surprising that Conn fled. He expressed surprise that the court allowed him bond in the first place. He even joked about a betting pool as to when Conn would depart.

A coworker of Conn’s reported that Conn said he would head to Cuba or Ecuador rather than go to prison. He had a history of world traveling that the state’s attorney believed made him a flight risk. Conn also moved money to offshore accounts before taking off. U.S. attorneys believe that Conn has the money to hide for a long time.

Conn’s attorneys successfully secured his bond by convincing the court that Conn would have fled when charges were first filed if he was going to flee at all. Conn bragged in his advertising he doesn’t back down from a fight. Today, he’s on the FBI’s Most Wanted list for white-collar crime.

Sources: http://www.nbcnews.com/news/us-news/ghost-ship-warehouse-fire-defendant-near-mental-breakdown-lawyer-says-n770551


Jeremy Goldstein Explains How Knockout Options Help Employers

In recent years, numerous corporations have decided to stop providing employees with stock options. Some firms did so simply to save money, but usually the reasons behind the decisions of most companies are more complex. Three major problems frequently persuade companies to curtail these benefits:

  1. The value of the company’s stock 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.
  2. Many employees have become wary of this compensation method. They know that economic downturns often render stock options worthless and that during those times such benefits may seem to resemble casino tokens more than cash.
  3. Stock options can result in considerable accounting burdens, making the relevant costs more expensive than the financial advantages. Employees often don’t consider stock option benefits as valuable as higher salaries that an employer could pay instead.

The Advantages of Stock Options

Nevertheless, this type of compensation can still be preferable to additional wages, equities, or better insurance coverage. Why? Because it is relatively simple for staff members to understand stock options. They provide something of equivalent value to all employees.

Stock options only boost personal earnings if a corporation’s share value rises. This encourages employees to prioritize the company’s success at work. People may work harder to satisfy existing customers, attract desirable clients, or develop innovative services when they know their personal investment is on the line.

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 equities, but not if they provide stock options to the employees.

A Solution to Limiting the Negatives of Providing Options to Employees

If a firm wants to continue awarding options to employees, it can gain the above-mentioned benefits and avoid excessive costs at the same time by adopting the right strategy. It must take steps to minimize overhang as well as the 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 usual; however, employees lose them if the share value falls under a specific amount.

For example, a staff member might receive an option that has a five-year term that allows them to buy stock at the price of $150 per unit. If it’s a knockout option, it that option can expire when the company’s share value drops to less than $75.

But 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 options when the share value remains low for an extended period of time such as 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.

Considerations Regarding Knockout Options

Knockout options don’t solve every problem, but they do 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.

Jeremy Goldstein

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 board of a prestigious law journal and a nonprofit known as Fountain House.



Learn more:

Federal Lawsuit Pending as Crude Oil Flows from Dakota Access Pipeline

The Standing Rock Sioux tribe is North Dakota has been protesting the Dakota Access Pipeline for months. The tribe has reservations and water sources lying downstream from the pipeline and fear that leakage could endanger their way of life.

The lawsuit that the Sioux Native American tribe filed in federal court is still pending. The tribe is asking for a federal judge to step in and shut down future extraction from the Dakota Access Pipeline, but so far the lawsuit is still pending.

The extraction of crude oil and transportation through the pipeline has been delayed over the last few months. The most contentious area of the Dakota Access Pipeline for the protesters has been the closing stretch of the pipeline that lied near the Missouri River. More than 700 total protesters have been arrested over the course of the many months that the protests raged.

Native Americans and environmentalist groups have squared off against a variety of oil partners looking to move the crude oil from Stanley, North Dakota to Patoka, Illinois. Energy Transfer Partners, Sunoco Logistics Partners, Enbridge, Phillips 66, and Marathon Petroleum are all partners in the Dakota Access Pipeline. Construction on the pipeline started in 2016, and extraction and transportation of the crude oil just started.

The Dakota Access Pipeline’s viability was helped along by President Trump. Overturning a call made by the Obama administration, President Trump decided to speed up the approval process for contentious sections of the pipeline in order to bring the Dakota Access Pipeline project to fulfillment.

Native Americans from the Standing Rock Sioux tribe still feel as though their water sources and sacred grounds could be endangered if the pipeline starts to leak. Although some leaks have already been reported, leaks just far have been minor and the Standing Rock Sioux tribe’s water sources are not known to be imperiled.

The federal lawsuit calling for a shut down of extraction and transportation of the crude oil is still pending in federal court. In the meantime, a federal judge in March of this year denied a motion for preliminary injunction that would have delayed construction on the final stretch of the Dakota Access Pipeline.

One of the oil partners associated with the pipeline – Energy Transfer Partners – found that the pipeline is more environmentally conscious that sending the same crude oil by train or truck. The federal lawsuit is still pending.