I-9 Update
By Jaclyn Granet and Frida Glucoft
July 31, 2017
Onboarding a new employee is a time-consuming process that requires diligent review of employment authorization materials. One major element of onboarding is the completion of the Form I-9, intended to document verification of the identity and employment authorization of each new employee. Form I-9 has seen many modifications and revisions over the years, including a significant update in 2013. The Department of Homeland Security (“DHS”), through the United States Citizenship and Immigration Service (“USCIS”), released a new edition of the Form I-9 on July 17, 2017. This newest version of the form may be used immediately. However, USCIS has authorized a grace period during which either the new version of the Form or the last version may be used. Following the end of the grace period, on September 18, 2017, all U.S. employers are required to use the new Form I-9 for all new hires. Employers should only complete the new Form I-9 for new hires and current employees requiring reverification. Given the significance of the Form I-9, it is important for all employers to familiarize themselves with the new features of the Form and the mandatory time frame for its usage. Continue reading “I-9 Update”
IRS Gives Surviving Spouses a Second (or Third) Bite at the Portability Apple
“Portability” is the ability of a surviving spouse to use not only his or her own estate tax exemption, but also some or all of the exemption of the first spouse to die, as long as the first spouse died in 2011 or later. With the estate tax exemption for 2017 at $5,490,000, this can allow estates of nearly $11,000,000 to escape estate tax. While a full discussion of portability is beyond the scope of this post, suffice it to say that portability can save the day in one or more of these situations: if proper estate planning has not been done, if life insurance, IRAs or retirement plans left to the surviving spouse constitute a very large portion of a couple’s assets, or if a couple’s assets of any type are worth near the value of one exemption but less than both (e.g., $4,500,000 to $10,500,000).
The catch is that if the deceased spouse’s assets are worth less than his or her exemption amount, the deceased spouse’s executor has to file a federal estate tax return (Form 706) for the deceased spouse to “claim” the deceased spouse’s unused exemption and thus invoke “portability.” This is the direct opposite of the normal rule that if a decedent’s estate is worth less than the estate tax exemption amount (after taking lifetime gifts into account), no estate tax return filing is necessary. But if the deceased spouse’s executor does not file a timely estate tax return for the deceased spouse (nine months after the date of death, or an additional six months thereafter if a request for an extension was properly filed by the nine month deadline), the ability to use portability is permanently lost. Continue reading “IRS Gives Surviving Spouses a Second (or Third) Bite at the Portability Apple”
Changes From the SEC: Confidentiality is Key
By Blake Baron
In a recent effort to foster increased public offering activity, the U.S. Securities and Exchange Commission (SEC) announced on June 29, 2017 that it will permit all companies to submit voluntary draft registration statements relating to initial public offerings (IPOs), certain follow-on offerings and national securities exchange listings for non-public review. This process will be available for nearly all offerings made in the first year after a company has entered the public reporting system. This benefit will take effect on July 10, 2017.
So, why is this an important change? Continue reading “Changes From the SEC: Confidentiality is Key”
California State Board of Equalization Gutted
The Taxpayer Transparency and Fairness Act of 2017
Established by the California Constitution in 1879, the California State Board of Equalization (the “BOE”) has been the agency charged with administering most of the taxes imposed by California. In addition, the BOE was the tribunal whose function was to decide taxpayer appeals of decisions by the California Franchise Tax Board (the “FTB”) concerning income tax matters. All of this is about to change with the passage of AB 102. AB 102, which is named the “Taxpayer Transparency and Fairness Act of 2017” (the “Act”), was signed into law by Governor Brown on June 27th. The Act effectively cuts the legs out from underneath the BOE.
Background
In March of this year, the California Department of Finance issued a derisive report asserting that the BOE misallocated tax revenues, used BOE employees to assist elected BOE members with political activities, and attempted to improperly affect BOE audits. In response, and at the urging of the Governor, the Act was passed by the California Legislature. Continue reading “California State Board of Equalization Gutted”
If You SEC Something, Say Something
Just about every survey of General Counsels reveals the same #1 culprit of sleepless nights….. a cybersecurity hack. If you run a business in today’s global environment, it is hard to escape the fundamental reality that it is more than likely a matter of when, not if, you will face a cyber threat. And depending on the nature of your business, that threat can have a wide range of implications. If you are a public company, there is an additional issue to consider… what do you have to disclose to your investors and shareholders?
Being prepared for a hack with a comprehensive written information security plan and an equally robust incident response plan is just one component to be considered if you are a public company. You must also have a plan to meet your reporting and disclosure obligations to a variety of governmental bodies. While measuring your response needs in the wake of a hack, and determining if there are state, federal or international laws and regulations that require reporting, you must also pay close attention to possible disclosure obligations in your SEC filings. Specifically, if you have tripped a disclosure to a state attorney general or your company’s customers, then it is possible you may also have a disclosure obligation to your shareholders. Continue reading “If You SEC Something, Say Something”
Three Tiers for California
By Daniel Hayes and Aaron Wais Last week, California’s tied-house law – the Alcoholic Beverages Control Act (Bus. & Prof. Code §§ 23000, et seq.) – withstood a hard-fought First Amendment challenge. In Retail Digital Network v. Prieto, the Ninth Circuit Court of Appeals was asked to decide whether Business and Professions Code § 25503(h) – which prevents manufacturers and wholesalers from paying money or giving … Continue reading Three Tiers for California
Trump’s Cuba Course Clarified
“Trump cracks down on Cuba” or variations on that phrase have peppered the general press since Friday, when the President announced his policy towards Cuba. When you read what was actually written, you come away with a more tempered reaction. Yes, there will be changes, and the most critical one is yet to come, but we focus here on what was actually written.
First, the format is not an Executive Order but rather a June 16, 2017 “National Security Presidential Memorandum on Strengthening the Policy of the United States Towards Cuba” accompanied by a Fact Sheet. The memo can be found here, and the Fact Sheet here. So, nothing changes right away.
Taken together, there are two points that could impact international traders. Continue reading “Trump’s Cuba Course Clarified”
Supreme Limits: Kokesh v. SEC Imposes a 5-Year Limit on Disgorgement Claims
By John Durrant
On June 5, 2017, the U.S. Supreme Court unanimously ruled that claims by the Securities and Exchange Commission seeking disgorgement must be commenced within five years of accrual. The ruling, which resolved a circuit split, represents a very important curtailment of the SEC’s enforcement authority. The SEC had previously argued that there was effectively no limitations period that applied to disgorgement and accordingly sought to disgorge purportedly ill-gotten gains going back, in some cases, decades. Justice Sotomayor’s lucid opinion categorically rejected the SEC’s position. Potentially more disconcerting for the SEC, language in the decision suggests the Court may look at further limitations on the judicially created disgorgement remedy in the future.
The sole question posed in Kokesh v. SEC, case number 16-529, 581 U.S. ___ (2017), was whether 28 U.S.C. § 2462 applied to claims by the SEC for disgorgement. Section 2462 sets forth a 5-year statute of limitations for “an action, suit or proceeding for the enforcement of any civil fine, penalty or forfeiture” brought by the Government. The SEC argued that its claims for disgorgement did not fit this definition – that a disgorging defendant was merely giving up that to which he or she was not entitled and that disgorgement was an “equitable remedy” not a “penalty.” The Court rejected this argument, holding that disgorgement “bears all the hallmarks of a penalty” (i.e., a Government-imposed “punishment”) in two regards: (i) it seeks to redress a wrong to the public (not an individual); and (ii) it seeks to punish wrongdoers and deter similar wrongdoing by others. Continue reading “Supreme Limits: Kokesh v. SEC Imposes a 5-Year Limit on Disgorgement Claims”
DFEH Issues New Workplace Harassment Guidance
Since April 1, 2016, California employers subject to the Fair Employment and Housing Act (“FEHA”) have been required to comply with a number of amendments to the FEHA regulations that were adopted by the California Fair Employment and Housing Council (“FEHC”). FEHA imposes an affirmative duty on employers to “take all reasonable steps to prevent discrimination and harassment from occurring.” To effectuate that duty, the amended FEHA regulations expressly require employers to develop a written harassment, discrimination and retaliation prevention policy. More detailed information regarding the 2016 FEHC may be found here.
To aid employers in complying with their obligations under the FEHA and the 2016 FEHC amendments, the California Department of Fair Employment and Housing (“DFEH”) recently released a “Workplace Harassment Guide for California Employers,” which provides recommended practices for preventing and addressing workplace harassment. The publication is intended to help employers develop effective anti-harassment programs, investigate reports of harassment, and understand what remedial measures they might pursue. In short, the Guide discusses the following:
- What is included in an effective anti-harassment program;
- The basic steps required to conduct a fair investigation;
- Confidentiality of investigations;
- Timing of investigations;
- Recommended practices for conducting workplace investigations, including impartiality, investigator qualifications and training, type of questioning, making credibility determinations, burden of proof, legal conclusions, and documentation;
- Special issues, such as what to do if the target of harassment asks an employer not to do anything, investigating anonymous complaints, and retaliation; and
- Implementing effective remedial measures.
The Workplace Harassment Guide for California Employers is available here. Continue reading “DFEH Issues New Workplace Harassment Guidance”
Dissecting the TC Heartland Ruling – What Does This Mean for Patent Owners?
In an 8-0 decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, No. 16-341, the U.S. Supreme Court placed tighter limits on where a patent owner may file a suit for patent infringement by holding that “a domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statute.” The Court’s decision reverses Federal Circuit precedent that allowed a patent owner to file suit anywhere a defendant made sales.
In TC Heartland LLC, Kraft Foods Group Brands LLC (“Kraft Foods”) brought a patent infringement suit against flavored drink mix maker TC Heartland LLC (“TC Heartland”) in the U.S. District Court for the District of Delaware. TC Heartland, organized under Indiana law and headquartered in Indiana, moved to transfer venue to the U.S. District Court for the Southern District of Indiana, arguing that under the patent venue statute, 28 U.S.C. § 1400(b), it did not “resid[e]” in Delaware and had no “regular and established place of business” in Delaware. TC Heartland based its arguments on the Supreme Court’s decision in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 226 (1957), where the Court concluded that for purposes of § 1400(b) a domestic corporation “resides” only in its State of incorporation.
Continue reading “Dissecting the TC Heartland Ruling – What Does This Mean for Patent Owners?”
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