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In Lovely v. Prestige Travel Ltd., 2013 ABQB 467, the Alberta Court of Queen’s Bench ordered an employer to pay an executive level employee one year’s base salary, after it terminated his employment one year into a two-year,...more
A board’s decision as to whether, when and how to terminate the employment of a CEO and hire a successor is among the most critical decisions facing the board of any company — large or small, public or private, established or...more
Firing an employee in the United States can be a challenge. Group firings—reductions in-force — can be an even bigger challenge. And from the point of view of a multinational headquartered in the United States, overseas...more
It is standard practice that employment agreements condition payment of severance benefits or other separation compensation on the employee executing a general release of claims against the employer. However, unless...more
Severance agreements and employment contracts with release of claims provisions may violate 409A of the Internal Revenue Code. Bad release provisions may be fixed, penalty-free, before December 31, 2012.
The Treasury Department and the IRS have provided favorable transition relief for correcting arrangements that impermissibly condition the payment of nonqualified deferred compensation on a service provider's completion of...more
As the end of the year approaches, important transition relief from penalties and excise taxes imposed by Section 409A of the Internal Revenue Code (the Code) is about to expire. If an employer has an employment agreement or...more
By December 31, 2012, all deferred compensation arrangements in which payment is contingent on employee action, such as execution of a release of claims, must either include payment-timing restrictions that comport to IRS...more
Employers with employment agreements, severance policies, and other non-qualified deferred compensation agreements that contain language conditioning any payment on employee action, such as the execution of a release of...more
Employment, change in control, and severance agreements, as well as severance and deferred compensation plans, often condition payment upon the execution of a release or a noncompete or other employment-related condition. Any...more
Many executives have employment agreements that provide for specified payments in the event of termination. In instances where employees do not have employment agreements, employers often seek to provide terminating...more
Background - Section 409A of the Internal Revenue Code (Section 409A) regulates the payment of non-qualified deferred compensation. If a plan or agreement is not otherwise exempt from Section 409A and does not comply with its...more
Severance and other deferred compensation payments that are contingent on the execution of a release can in some circumstances result in a violation of Section 409A of the Internal Revenue Code. Section 409A governs the...more
December 31, 2012, is the deadline for correcting certain errors in the written provisions of nonqualified deferred compensation arrangements that provide payments that are contingent on the recipient’s execution of a release...more
Many employment agreements, especially those for high-level executives, provide severance pay upon a change in control or a termination without cause, but only if the employee signs a release of claims. The IRS has noted that...more
Non-qualified deferred compensation arrangements that are not exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), should be reviewed to ensure compliance with Section 409A’s rules governing...more
Employers should review plans and agreements subject to Internal Revenue Section Code 409A before the end of 2012. That’s when transitional relief afforded by the Internal Revenue Service expires for deferred compensation...more
Deferred compensation arrangements under which payments subject to Section 409A are contingent on a release must be brought into compliance with documentation requirements by December 31.
The December 31, 2012,...more
Agreements that provide for payments upon termination of employment, such as employment agreements, retention agreements, severance agreements and change in control agreements, often condition payment upon the return of an...more
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