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SEC Hosts Compensation Disclosure Roundtable in Advance of Potential Rule Changes

"[T]opics covered during the roundtable include: [1] Alignment of compensation disclosure with compensation decision-making ... [2] Perquisites ... [3] Pay-for-performance ... [4] CEO pay ratio ... [5] Clawback rules ... [6] XBRL ... [7] Say-on-pay."

Maryland Clarifies Overlapping Leave Obligations for Employers

"The [Maryland Parental Leave Act (MPLA)] was intended to apply to smaller employers not covered by the FMLA ... [T]here have been occasions of overlap, where both laws apply to companies that change in size.... SB 785 ... amends the definition of 'employer' under the MPLA to exclude those covered by the FMLA in the current year, effectively exempting FMLA-covered employers from Maryland's parental leave requirements."

Eleventh Circuit Rules Third Party Claims Unnecessary to Trigger Employee Benefits Liability Coverage

"In this instance, the court properly applied bedrock principles of policy interpretation to come to the right result -- the insuring agreement could be triggered without a third-party claim, particularly here where the 401(k) plan's qualified status was in jeopardy, which in turn made North American 'legally obligated' to make the corrective payments." [North American On-Site, LLC v. Zurich American Ins. Co., No. 22-12495 (11th Cir. Oct. 28, 2024)]

SCOTUS Will Decide Whether ADA Allows Former Employees to Sue Over Post-Employment Benefits

"[SCOTUS is] now poised to resolve the circuit split over whether a former employee loses her right to sue over post-employment benefits that she accrued during her employment. A ruling in favor of Stanley may affect how employers administer post-employment policies and benefits. Changes to post-employment benefits plans that disproportionately affect disabled former employees may be susceptible to challenge." [Stanley v. City of Sanford, Florida, No. 22-10002 (11th Cir. Oct. 11, 2023; cert. pet granted No. 23-997, Jun. 24, 2024)]

Class Action Alleging Violations of ERISA's ESG Investing Rules Survives Motion to Dismiss

"The court's decision sets a low bar for plaintiffs alleging ERISA claims based on alleged ESG investments in at least two ways ... [1] [T]he court accepts as sufficient plaintiff's allegations that some analyses have found that ESG investments underperform other investments.... [2] [W]hat constitutes an 'ESG fund' apparently can be based on public statements made by investment managers, regardless of whether those statements resulted in actions with respect to any funds at issue or whether any actions actually caused investment underperformance." [Spence v. American Airlines, Inc., No. 23-0552 (N.D. Tex. February 21, 2024) ]

California Mandates New Leave for Reproductive Loss as of January 1

"California Senate Bill 848 ... builds on California's 2023 bereavement leave law, which provided five days of unpaid bereavement leave to eligible employees following the death of a covered family member. This new reproductive loss law applies to all employers with five or more employees."

Significant Paid Sick Leave Increases for California Employers

"The new law increases the annual accrual to 40 hours (five days), with an accrual cap of 80 hours.... California employers can also take this opportunity to confirm that their policies comply with the handful of California municipalities whose sick leave laws are still more generous than the State's paid sick leave law (including Los Angeles, San Francisco, San Diego, Emeryville, Berkeley, Santa Monica, and West Hollywood)."

District Court Upholds New ERISA Rules on ESG Investing

"The decision ... upholds the [DOL's] interpretations under ERISA that plan fiduciaries may consider ESG factors when evaluating the risk-weighted returns of investment options, but should not give extra weight to ESG factors in choosing investments. The decision thus affirms the [DOL's] long-standing focus on risk-weighted financial returns as the touchstone for compliance with ERISA fiduciary duties." [Utah v. Walsh, No. 23-0016 (N.D. Tex. Sep. 21, 2023)]

Clawback Policy To-Do List

"[1] Board must approve compliant policy (whether new or amended), and may need to approve revisions to other executive agreements before December 1, 2023. [2] Analyze existing compensation arrangements and policies and amend as needed. [3] Develop an enforcement process and disclosure controls procedures."

First Gag Clause Attestations Due December 31, 2023: What Group Health Plan Sponsors Need to Know

"Plan sponsors and carriers of fully insured plans are both required to submit a [Gag Clause Prohibition Compliance Attestation (GCPCA)]. [FAQs Part 57] provide that if the insurance carrier submits the GCPCA on behalf of the plan, the Departments will consider the plan (and insurer) compliant. Sponsors of fully insured plans, however, should confirm that the carrier will be submitting the GCPCA on the plan's behalf."