Non Qualified Deferred Compensation Arrangements Under Section 409A

imagesON0V86EZA plan or arrangement containing non qualified deferred compensation features may have to comply with the requirements of Section 409A of the Internal Revenue Code. Non qualified deferred compensation features can be present in any plan or arrangement which provides payment for services subsequent to the year in which the services are performed. A contract providing, for example, that an employee will be paid on December 31, 2017 for performing services for his or her employer in 2016 could be subject to Section 409A. Non qualified deferred compensation features can be in bonus plans, employment contracts, plans and arrangements for the payment of retirement benefits, phantom stock and stock appreciation plans, discounted stock options, separation and retention plans, post retirement fringe benefits, certain types of split dollar life insurance arrangements, top hat plans, Section 457(f) plans, change of control agreements and similar plans and arrangements. (more…)

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Justice Scalia’s Passing Grants Unexpected Reprieve to Beleaguered Lending Regulation

images1UOJVI04Did the Federal Reserve Board overstep its authority when it defined someone who guarantees the debt of another as an “applicant” for credit? It’s an issue seemingly about as sexy as watching white paint dry. Still, of all the cases on the U.S. Supreme Court’s docket during the 2015–2016 term, which was so defined by the unexpected death of Justice Antonin Scalia in February, the one that stood out most to me was Hawkins v. Community Bank of Raymore, a case that boiled down to exactly that question. That’s because Hawkins touched on so much more than what an “applicant” is or is not.

What Is Reg. B, and Why Does It Matter?

Hawkins originated in Missouri and concerned validity of Regulation B (“Reg. B”), a federal lending regulation under the Equal Credit Opportunity Act (“ECOA”) intended to guard against marital discrimination in credit transactions. Reg. B protects applicants for credit who meet a lender’s creditworthiness requirements individually from being forced to procure their spouse’s guaranty on the debt, and it arguably protects the guarantors themselves as well. In other words, if an obligor can show the only reason she was required to obtain a personal guaranty from her spouse was because she had a spouse, she likely has a defense under Reg. B. (more…)

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There is a New Federal Law Protecting Your Company’s Sensitive Information!

images36RAPLVDOn May 11, 2016, a new federal law protecting trade secrets (the “Defend Trade Secrets Act”) went into effect. Prior to the law going into effect, remedies for trade secret theft were governed by the laws of the various states, which laws often provided for a lack of uniformity in enforcing trade secret protections. The new federal law has many facets to it, but the major change brought about by the law is that now, companies that have been the victim of trade secret theft have the option of suing under the federal statute, which allows for federal court jurisdiction and should provide for more uniformity in trade secret protection. (more…)

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Brownfields Can Mean Green

images7WDUIHPLIt’s an election season once again and jobs are in the forefront. There are real opportunities in those Brownfields to create jobs, particularly in areas which are disadvantaged. For example, “the Missouri Brownfields program awards various tax credits to businesses that remediate properties and create a specified number of jobs. In 2006 a study was performed to determine the investment value of 50 redeveloped sites. The study concluded that the total investment on the property was $2.2 billion. Approximately, 11,053 full-time jobs were created. Nearly 160 thousand tons of contaminated materials were removed, and 686 acres were successfully developed. Equally important, twenty-three historical buildings were returned to use.” Schmittgens, Eugene P. (2014) The Politics of Environmental Regulations: What Happened to Market Based Regulations? (Master’s Thesis) pp. 38-39. (I guess it’s OK to cite my own research) (more…)

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Should Your Closely-Held Corporation Have an Advisory Board?

boardA closely-held corporation can benefit from having an outside director with special expertise (e.g., strategy, marketing, HR, technology, finance and international business). However, potential outside directors are often reluctant to take on the role of a director of a closely-held corporation because of fiduciary obligations and other potential liabilities (e.g., environmental, employment discrimination, unpaid wages, unpaid taxes and regulatory liability).

A corporation can derive many of the benefits of an outside director, while avoiding many of the problems, by appointing an advisory board. An entrepreneur with a closely-held business may also be reluctant to dilute authority with outside directors, but may be comfortable with an advisory board which renders advice but has management authority or responsibility. (more…)

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Layaway Does Not Last Forever in Illinois

LayawaySuppose you go to your local hardware store, and order bathroom tile for a “weekend” project. Suppose you don’t pick it up within the time required because you are not ready install it. Then suppose you finally get to the point where you need the tile, but it is a year later. In Illinois, at least, if you order an item from your local hardware store but don’t pick it up within the store’s guidelines, you can’t go back later and claim you are entitled to the product and seek damages if they don’t give it to you.

In a recent opinion, Longo Realty v. Menard, Inc., No. 14M3430, the Appellate Court of Illinois, First District, held that a delay in picking up an “ordered” product did not entitle the consumer to purchase the product at the original price or claim damages because the store sold its inventory, and did not set aside and keep the product for the consumer in the event that he would possibly come back later and pick it up. (more…)

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Giving It a Proper Burial: Dissolving LLCs and Corporations in Missouri

dissolve-corporationWhen it comes to corporations, LLCs, and other entities, people tend to focus on their birth rather than their death, with most available literature being on the pros and cons of different types of entities and how to go about creating one. But for reasons similar to why the birth of LLCs and corporations is a regular, ongoing need for many of our clients, so too is the death of these entities.

Of course, a classic example would be when a business ceases operations and is liquidated. There are plenty of more routine reasons why this might happen though. For example, an entity might be created for the specific purpose of holding one piece of real estate that is being developed or renovated. Once the work is done and the developer sells the real estate for a profit, what happens to the entity? Often, the entity, having served its purpose, is put through the dissolution process. (more…)

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What Do I Need to Protect My Invention, a Copyright, a Trademark or a Patent?

PatentI often speak with owners of small businesses or start ups that want to protect their new product or ideas from being copied by competitors. Some tell me they would like to copyright their new product or idea. Some tell me they need a trademark for their new product or idea. And some say they need a patent for their new product or idea. So, which is it?

Intellectual property law, or copyright, trademark and patent law is a subject that usually doesn’t come up in the day-to-day conversation of entrepreneurs, so it is understandable that they are unsure of whether they need a copyright, a trademark or a patent to protect their new product or idea. The following provides some basic information on the three types of intellectual property and what they protect. (more…)

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Major Changes Coming to Management and Overtime

Group of businessman carrying briefcase run around a clock 3d illustration

Timeline

On March 14, 2016, the U.S. Department of Labor (DOL) submitted its final overtime rule to the Office of Management and Budget (OMB) for review. Review by the OMB is the final step before publication of the final rule and generally takes between four and six weeks. This means that employers may well see the rules come into effect before mid-May. Indeed, many believe that this is likely the DOL’s strategy, as publication of the Final Rule after May 16, 2016?would put it subject to the Congressional Review Act under the next presidential administration, giving Congress and the next administration the opportunity to nullify the rule.

Changes in Overtime Laws

Currently, the Fair Labor Standards Act (FLSA) requires all employees in the United States to be paid at least the federal minimum wage for all hours worked. In addition, these employees must receive overtime pay equal time one-half their regular rate of pay for all hours worked over 40 hours in a workweek. However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive employees, among others. (more…)

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Are You Carrying an “Eavesdropping Device” in Your Pocket?

CellphoneIn a recent episode of the CBS television drama “The Good Wife”, characters used devices such as smartphones, to surreptitiously record conversations with others. While the storyline did not include these people facing liability for their actions, this depiction of events caused me to think back to Don Kelly’s previous blog post about the everyday liability traps posed by the Illinois Eavesdropping Statute!”

By way of reminder, the Illinois Eavesdropping Statute is an Illinois criminal law, but it can still trigger civil liability for violations. As a result, individuals and businesses are at risk of incurring liability under the statute for noncompliance based upon everyday activities. In this post, I will focus on what constitutes an “eavesdropping device” under the law.

According to the Illinois Eavesdropping Statute, an “eavesdropping device” is defined as follows:

“an eavesdropping device is any device capable of being used to hear or record oral conversation or intercept, or transcribe electronic communications whether such conversation or electronic communication is concluded in person, by telephone, or by any other means; provided, however, that this definition shall not include devices used for the restoration of the deaf or hard of hearing to normal or partial hearing.” (more…)

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