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The Federal Arbitration Act (FAA) enforces certain arbitration agreements involving federal law, including some employment disputes and claims against employers under the Employee Retirement Income Security Act of 1974 (ERISA). But is an arbitration agreement that prohibits an individual from seeking relief provided by federal statute still enforceable? The U.S. 7th Circuit Court of Appeals […]
The U.S. Department of Labor (DOL) has reached an agreement with the owner of a Manhattan laser surgery center to pay $5 million to its Employee Stock Ownership Plan (ESOP) to resolve violations of the Employee Retirement Income Security Act of 1974 (ERISA).
Effective January 1, 2017, the Internal Revenue Service (IRS) is providing an exemption from a user fee for some small-employer benefit plans seeking a determination letter about their qualified status.
The U.S. Department of Labor (DOL) is suing the fiduciaries of a Vermont employee stock ownership plan (ESOP) for violations of the Employee Retirement Income Security Act (ERISA), alleging that First Bankers Trust Services, Inc.’s 2011 purchase of a company on behalf of the ESOP from its two previous owners caused the plan to suffer […]
A privately held commercial bank in San Francisco, California was ordered by a U.S. district court in a fiduciary-breach judgment to pay more than $860,000 to participants in its former employee stock ownership plan (ESOP).
The U.S. Department of Labor (DOL) has filed a lawsuit against the fiduciaries of a Virginia-based employee stock ownership plan (ESOP), alleging the defendants failed to protect the assets of the plan as it purchased nearly $21 million in company shares from the president of Sentry Equipment Erectors Inc., who was also a trustee of […]
By Upendra Chivukula and Veny W. Musum Today, almost 50% of Americans own zero capital wealth. With the already manifest discontent all over the country, this fact is an ominous recipe for even wider, much more serious future levels of unrest. However, there is a solution. Shared employee ownership via Employee Stock Ownership Plans (ESOPs) […]
In recent years, many employers have begun offering employees stock ownership in the company either in lieu of bonuses, or as deferred compensation—often called Employee Stock Ownership Plans (ESOPs).
A new threat facing employers is an increase in complex and costly litigation over the handling of employee benefit plans. The potential liability can be substantial, as Occidental Petroleum recently discovered when it agreed to pay $25 million, plus another $3.5 million in attorneys’ fees and expenses, to settle such a dispute. The class action […]