Compliance Stuff

Conducting a reduction in force (RIF) is one of the most challenging and sensitive actions a company can take. They are inherently emotional, exhausting and distressing. They can also create significant legal and employee relations risks, even when conducted with the best of intentions. To mitigate potential litigation exposure and business disruption, it’s critically important to carefully plan and execute against that plan. Below are some best practices to keep in mind when conducting a RIF. Note that this article focuses on requirements for US employees. If your company is laying off employees in other countries, consult with local counsel early in the process. Employment laws vary widely across jurisdictions, and you may encounter a very different – and potentially more stringent – set of requirements for layoffs outside the US. Consider and document the business rationale First, consider whether job eliminations are truly necessary. For example, if financial considerations are dri...

Government investigations can be costly. A simple subpoena for documents could entail collecting hundreds of thousands of documents from your email servers and personal devices, hiring attorneys to review and produce documents, and sitting for hours of interviews with government investigators. And if that investigation uncovers evidence of violations, the consequences could include significant penalties for a company and its principals. Private companies are not immune from these risks. The anti-fraud provisions of federal securities laws apply to private companies, and the US Securities and Exchange Commission (SEC) has not shied away from pursuing private companies (as well as their officers and directors) for alleged fraud. The US Department of Justice (DOJ) also closely scrutinizes startups and their founders. And because of the relatively long statute of limitations for securities fraud (five years for SEC civil enforcement and six years for DOJ criminal prosecution), statements m...

Thinking about where to incorporate your company? While Delaware has long been the go-to choice for startups formed as corporations in the US, we’ve observed that recent changes in the legal landscape and statements by public figures have led founders to take a look at other states – especially Nevada and Texas. Each state offers its own approach to corporate governance, director and  officer  liability, stockholder rights, and how business disputes are resolved, and the best choice depends on your company’s specific needs and priorities. The chart below highlights some of the key differences in corporate law among Delaware, Nevada and Texas to help you better understand what’s at stake when choosing your company’s legal home. Keep in mind, this chart only covers certain legal differences, but practical factors also matter and are worth considering with your legal counsel. For example, your current or prospective investors may prefer or just be more familiar with a certain s...

Federal contractors may face a variety of workforce compliance challenges during the current US federal government shutdown. These challenges include understanding and meeting obligations under federal and state wage and hour laws, the federal Worker Adjustment and Retraining Notification (WARN) Act and state counterparts, as well as addressing issues related to employee benefits, unemployment benefits and union matters. Below are key considerations to help contractors manage these challenges during the shutdown. Wage and hour considerations A furlough temporarily stops employees from working, with the expectation that they will return to work later. This approach allows contractors to reduce labor costs in the short term without terminating employees. When furloughing employees, contractors must comply with federal and state wage and hour laws. For nonexempt employees, employers are only required to pay for hours actually worked. However, exempt employees must receive their full sa...