McDermott Will & Schulte, a global law firm

Compensation and benefits programs help you attract and retain top talent – but they are subject to significant regulatory risk and shareholder scrutiny. Our employee benefits lawyers partner with you to design, implement, and administer compensation and benefits programs that protect your interests across the employee lifecycle – from hiring to separation.

We support your business by structuring and managing programs that drive performance, control costs, and enable long-term growth. We advise you on all aspects of employee benefits and executive compensation, from plan design, administration, and compliance to workforce transitions, complex transactions, audits, investigations, and litigation.

As you manage your global workforce and expand into new markets, we advise you on international employee benefits, executive compensation, and cross-border employment matters. Our lawyers help you navigate complex regulatory frameworks across the US and Europe, including:

• Employee Retirement Income Security Act (ERISA)
• Internal Revenue Code (IRC)
• Affordable Care Act (ACA)
• Worker Adjustment and Retraining Notification (WARN) Act
• US securities and disclosure requirements
• Other applicable US federal, state, and local laws
• European labor laws, including works council and consultation requirements

When matters come under regulatory scrutiny or give rise to disputes, we represent you in labor and employment litigation, as well as in arbitrations and mediations before federal and state trial and appellate courts, US administrative agencies, and international counterparts in Europe and Asia.

In the event of an audit or regulatory inquiry, our lawyers advocate for you before the Department of the Treasury, the Internal Revenue Service, the Department of Labor, and the National Labor Relations Board on employment, compensation, and benefits matters.

Your compensation and benefits programs play a critical role in the growth and performance of your business. We partner with you to develop and manage employee benefits and executive compensation programs that protect your talent investment, reduce risk, and support your business goals.

Every employment decision shapes how your workforce performs – impacting your culture, reputation, and revenue. Our employment lawyers help your business move forward by managing risk across the employee life cycle – from hiring and onboarding to performance management, retention, and separation.

We go beyond reactive advice by partnering with you to anticipate risk. By taking the time to understand your business and your industry, we stay attuned to emerging workplace trends. Our employment lawyers help you address issues early, reducing the likelihood of disputes or regulatory scrutiny that can be costly and disruptive to your operations.

We partner with you to develop workplace policies that limit legal exposure and strengthen culture, help you comply with ever-evolving laws and regulations around the world, and negotiate contracts designed to protect your interests and align incentives across your organization.

To support global workforces, our employment lawyers work together seamlessly from offices worldwide, providing coordinated, cross-border guidance. We advise on issues across the full spectrum of employment law – from day-to-day advice and policy development to C-suite and board advisory, as well as bet-the-company litigation.

When high-stakes disputes arise, we assemble teams with the specific experience required to litigate the claims at issue – including highly specialized and complex matters. This approach has contributed to our strong track record in labor and employment litigation.

Our employment practice supports your organization at every stage of growth. We provide guidance that is grounded in how your business operates, partnering with you to mitigate workforce risk so you can drive your business forward.

Employee stock ownership plans (ESOPs)—at inception, termination and on an on-going basis—require expertise in a wide range of legal specialties. Our ESOP lawyers are an inter-disciplinary team from across the country with access to a deep bench of more than 1,000 firm lawyers experienced in corporate law, corporate finance, environmental law, securities regulation, lending, litigation, labor and employment law, real estate, estate planning, tax planning, and related areas. We address all aspects of ESOP transactions and on-going ESOP administrative compliance, as well as required fiduciary analysis and review. Our group has been engaged to provide counsel in some of the largest ESOP transactions that have occurred in the last decade, and continues to provide guidance for a wide variety of clients on a full range of situations and across multiple industries.

We represent individual trustees, institutional trustees, ESOP companies, lenders, selling shareholders and companies buying and selling legacy ESOPs in corporate transactions. We have seen it all. At the core of our ESOP Group is a team of lawyers who decided early in their careers to dedicate themselves to ESOP law and have taken the time and effort to maintain a practice that is well-versed in the evolving requirements presented by an ESOP. Our lawyers have represented many of the leading lending institutions in the United States in both large and small ESOP loans. Our firm also serves as regular counsel on a continuing basis to most of the leading independent fiduciaries for ESOPs, including institutional and individual ESOP trustees. Our lawyers have played important roles in the development of ESOP companies through transactional and on-going Employee Retirement Income Security Act of 1974 (ERISA) advisory services. Our lawyers have also played integral roles in the development of ESOP law and legal precedent through participation in Department of Labor and Department of Treasury rulemaking and ERISA litigation.

The breadth and depth of our ESOP practice allows us to deliver comprehensive legal services in a cost-effective manner. We have developed the necessary documents and a wealth of research on the more esoteric issues affecting ESOPs. By drawing on these resources, we are able keep costs to a minimum, allowing for an efficient planning opportunity to the benefit of our clients.

Strong businesses require strong leadership. To help organizations recruit, hire and retain key leadership and senior managers, our firm provides high-quality, client-tailored advice on all aspects of executive compensation, including benefits, tax, securities, labor, and litigation issues. Our executive compensation team draws on experienced lawyers from our benefits, corporate, tax, private client, and other departments to provide seamless, coordinated advice that meets the demands of today’s global workforce.

We understand the needs of employers and industry groups, and take into account the political, economic and social issues that drive legislators and regulators who develop and enforce executive compensation policy. Our clients include Fortune 500 companies, public companies of all sizes and privately held entities within the banking, financial services, health, technology, manufacturing, pharmaceutical, utilities, insurance, and other industries. Our group includes former Internal Revenue Service officials who participated in many of the rulings and developed a number of regulations that affect executive compensation. Members of our practice also hold key leadership positions within national and state bar associations.

We work with clients to develop executive compensation strategies that attract, retain and reward key executives while also protecting the best interests of shareholders. In light of increasing public scrutiny and the changing legal environment, corporate governance issues are an important consideration when establishing internal processes and structures. We provide effective guidance on change-in-control protection, compensation committee governance, executive employment agreements, equity compensation and stock options, incentive compensation, non-qualified deferred compensation, public disclosures, Section 16 reporting and split-dollar life insurance.

Employment Agreements

Our executive compensation lawyers regularly negotiate and draft employment agreements that meet the needs of employers and executives. We draw on our deep knowledge of industry best practices and standards, and have broad experience representing public companies and privately held businesses in the financial services, utilities, health care, technology and manufacturing sectors. We help clients address complex legal and business considerations relating to executive non-competition restrictions, confidentiality provisions, dispute resolution procedures and liquidated damage clauses, as well as severance and deferred compensation obligations that may represent significant financial commitments in the context of business acquisitions, mergers, divestitures and changes in control.

Equity Compensation

We regularly assist public, privately held and limited liability companies and other clients in designing equity compensation arrangements that meet key incentive and retention goals. We coordinate solutions to a range of tax, securities and accounting considerations, including qualifying for incentive stock options and Section 162(m) deduction rules for named executive officers, registering equity investments for public companies, securing exemptions for private companies, and ensuring accurate compensation expense reporting. Our experience includes all forms of stock options, restricted stock, stock appreciation rights, phantom stock, deferred issuance stock awards, stock purchase programs, use of equity derivatives and conversion of equity compensation into deferred compensation. We also advise clients regarding use of equity compensation for estate planning, clawback provisions for non-competes, and divorce decrees.

Multinational Executives

To help employers address the complicated challenges that arise when providing benefits to executives in different countries, our executive compensation team provides full-spectrum guidance on international and domestic tax, employment, labor and privacy laws. We work with clients to harmonize compliance between existing practices in the executive’s home country and foreign laws that are at times inconsistent with domestic requirements. Our lawyers negotiate and establish special arrangements for retirement benefits, social security coverage (totalization agreements), equity compensation and other benefits, and counsel multinational companies on issues involving stock option grants, approvals for deferred compensation, employment agreements involving multiple jurisdictions, and foreign tax deductions under Section 404A.

Non-Qualified Deferred Compensation

We help clients structure and establish a range of non-qualified deferred compensation plans that help executives accumulate meaningful retirement benefits beyond those allowed under more restrictive, traditional tax-qualified profit sharing and pension plans. We address risks such as changes in control, help clients ensure compliance with ERISA and constructive receipt rules, expanded coverage for employees, and emerging tax regulations, and influence the development of legislation, including recent proposals to restrict executive access to deferred compensation funds and the means by which a company may fund payment for future plan benefits. Our lawyers also advise tax-exempt clients on Section 457 limits and other federal tax rules that apply to exempt organizations.

SEC Compliance

We help clients ensure compliance with the full range of Securities and Exchange Commission rules that affect executive compensation, perquisite and personal benefits arrangements, including required disclosures and reports (such as Form 10-K and Form 8-K reports and registration, proxy and information statements), related-person transactions and corporate governance requirements. We work with clients to identify and establish disclosure teams, help educate team members, executives, directors and officers on disclosure requirements and timeframes, conduct inventories of perquisites and compensation, evaluate board independence, and review and modify committee charter amendments, policies for stock option and other equity grants, and related processes.

Split-Dollar Life Insurance

Public companies, privately held businesses and tax-exempt organizations that provide split-dollar life insurance to their executives must ensure compliance with a number of Internal Revenue Service rules and related federal and state legislation. Together with experienced lawyers from the firm’s tax, insurance and estate-planning practices, our employee benefits lawyers provide sophisticated split-dollar planning to a number of publicly held and other clients. We help clients evaluate alternatives for premium payments and to personal loan prohibitions, offer diagnostic reviews of corporate split-dollar programs, including group-carve out arrangements, SERP-swaps and “equity” split-dollar life insurance arrangements, and help identify new opportunities as regulatory requirements and financial markets evolve.

As healthcare costs continue to rise and more Americans rely on employer-sponsored health plans for coverage, offering market-leading health and welfare benefit plans can help you recruit and retain top talent—giving you a competitive edge. Welfare plans of all stripes have been the subject of complex—and often opaque—regulation and increasing government scrutiny, which can raise your costs, expand overhead and escalate compliance risks.

Our experienced team provides practical advice and innovative solutions to address these challenges and optimize your benefit plans and strategy. With a deep understanding of the market, applicable laws and regulations and employers’ day-to-day business needs, we help you tackle a full range of issues including:

• Advising on emerging issues and laws and collaborating to find strategic solutions
• Designing and implementing new health and welfare benefit plans
• Conducting audits of existing plans
• Ensuring compliance with reporting obligations and notice requirements
• Negotiating service provider agreements
• Counseling digital health and healthcare companies on developing health plan products and services
• Drafting summary plan descriptions and participant communications
• Updating health and welfare plans as needed with the release of new federal and state guidance
• Counseling on Health Insurance Portability and Accountability Act (HIPAA) compliance for group health plans
• Advising on compliance for non-Employee Retirement Income Security Act (ERISA) church plans
• Winding down retiree medical plans and Voluntary Employees’ Beneficiary Association (VEBA) trusts
• Representing companies before government and regulatory agencies to negotiate favorable outcomes

We partner closely with your HR and benefits department and in-house legal team to recommend cost-effective methods for enhancing benefits and to apply systems to ensure ongoing compliance with guidance from the Internal Revenue Service (IRS), Department of Labor (DOL), Health and Human Services (HHS) and other federal and state regulatory bodies.

Our work with employers (including many Fortune 100 companies) and across industries gives you insights on best practices for mitigating risk, avoiding litigation and handling benefits issues such as mental health parity compliance, reproductive health and prescription drug reporting, among others. We recommend practical options, share how other companies are confronting challenges and outline the risks of each approach to give you the information you need to make critical business decisions. Then we guide you through each step of the process.

When needed, we team up with top-ranked colleagues in our Health, Employment and Transactions practices to address these issues holistically. We are also equipped to support you if litigation becomes unavoidable.

Our nationally recognized health and welfare benefit lawyers concentrate exclusively on health and welfare benefit plan compliance issues. This focus gives us the capacity to provide you with consistent, reliable content on breaking news affecting welfare plan benefits, programs and arrangements of interest to employers, fiduciary committees and others. We are also routinely invited to speak at bar, industry, and trade events.

Affordable Care Act (ACA)

We help you understand, navigate and comply with the ACA. From employer shared responsibility requirements and employer reporting to plan coverage and notice obligations, we advise you on the resulting opportunities and challenges and guide you through benefit design strategies.

Health Insurance Portability and Accountability Act (HIPAA), cybersecurity, and other privacy laws

We help you understand and comply with the complex set of limitations and rules governing the use of an individual’s protected health information under HIPAA for your group health plans. As part of our industry-leading best practices, we conduct privacy audits, develop customized compliance plans, draft administrative policies and procedures for privacy and security, deliver training sessions and educational materials, and draft a range of contracts and consent and authorization forms for use with plan participants and business associates.

In addition to HIPAA compliance, health and welfare plans often sit at the intersection of multiple data privacy and cybersecurity laws, at both the state and federal level. Working with our Global Privacy & Cybersecurity team, we identify key issues affecting your plans and work with you to reach actionable solutions and mitigate risk.

On-site clinics

Our team helps you navigate the establishment of on-site employee clinics; the development of wellness, prevention and disease management programs and telehealth initiatives; direct contracting between employers and providers to create accountable care; medical home and shared savings strategies; and, implementation of account-based plans such as health reimbursement arrangements and health savings accounts.

Digital health and healthcare companies

We frequently guide digital health and healthcare companies through providing offerings to employers, health plans and insurers. Collaborating closely with our world-class Health practice, we provide comprehensive solutions for designing and expanding health and wellness products and services.

Retiree medical benefits

We advise private and public companies, nonprofits and other clients on the design and administration of retiree medical benefit plans. That includes strategies for reducing or eliminating post-retirement benefit obligations and maximizing tax advantages, such as the funding of those arrangements. We are also experienced in establishing novel benefit delivery models for retiree medical benefits, such as private exchanges, account-based plans and employer group waiver plans (EGWPs) that enable employers to continue to provide benefits to former employees while maximizing and leveraging other payors in the system.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Elements of the employer-employee relationship can last long after the termination of an employment situation. This is particularly true of group health benefits, in which employees, their spouses, domestic partners and dependents may continue to have access to employer-sponsored health plans for a period following an employee’s voluntary or involuntary separation from the company through COBRA and similar state laws. We advise clients on their responsibilities under COBRA and state law and help resolve disputes involving qualifying events, COBRA eligibility, and coverage periods and elections.

Captive insurance

A captive insurance company is one that provides insurance to, and is controlled by, its owners: essentially a self-insuring vehicle against losses emanating from the parent company. Many benefits flow from this arrangement, including reduction and stabilization of premiums, direct access to reinsurance markets, tax benefits and improved risk management. Although employers may self-insure certain employee benefit risks such as retiree medical benefits, employers may also fully insure such risks through the purchase of commercial insurance. We regularly advise on a wide range of innovative captive insurance structures, tax, coverage, reinsurance and related matters, including the use of a captive insurance company to fund benefits. This includes fiduciary issues, prohibited transactions and other ERISA Title I matters, along with other issues.

Group captive arrangements

Group captive arrangements offer a novel and effective way to manage reinsurance risk. These arrangements can provide significant healthcare cost savings under the right circumstances, and they are increasingly being enabled by targeted state insurance laws. Our lawyers have experience in establishing and advising single and multi-state group captive arrangements of all sizes and structures.

As employee benefits legislation and regulation grow in complexity and the global workforce becomes more interconnected, the demands placed on employers and employee benefit plan administrators are increasing in intensity. Plan sponsors and fiduciaries must continually reexamine and redesign employee benefit programs in light of the latest government guidance, case law and emerging industry best practices, domestically and internationally.

The Legal 500 has named our employee benefits and executive compensation team and individual lawyers among the top providers in the country, and US News-Best Lawyers honored us as the first-ever “Law Firm of the Year” in Employee Benefits in 2011-2012. Chambers USA has also named us “Law Firm of the Year” in Employee Benefits, and has singled out many of our lawyers for individual recognition.

As pioneers in the field of employee benefits and executive compensation, our lawyers have advised clients on virtually every form of benefit plan created. Rather than offering adjunct or add-on counsel in this area, we are focused on employee benefits issues above all else. We provide ongoing employee benefits counsel to more than 60 Fortune 500 companies and one-fifth of Fortune 100 companies. We also advise service providers for employee benefit plans maintained by other employers, including trustees, recordkeepers and insurers. Our broad client base allows us to help clients recognize new trends in the field and quickly identify and address potential legal hurdles.

Our lawyers handle the full range of issues that affect 401(k) plans, profit sharing plans, employee stock ownership plans (ESOPs), pension plans (including cash balance and other hybrid pension plans), non-qualified deferred compensation and executive compensation plans, health and welfare benefit plans, employment agreements and fringe benefit plans. To help minimize potential risks, we regularly conduct compliance reviews in various areas, such as tax qualification, COBRA compliance and fiduciary compliance matters. We also provide privacy and data security advice to help ensure that plan compliance obligations are met when regulated personal data is made accessible to plan service providers.

ESOPs

We wrote the law, we changed the law, we wrote the book. Our group is the largest and most-skilled ESOP practice in the United States, with coverage in all legal disciplines necessary to effectuate a successful ESOP transaction: corporate, tax, employee benefits, securities, labor, litigation and antitrust. Our experience emanates from having drafted most of the ESOP provisions in the original ERISA legislation, along with lobbying for the far-reaching changes enacted in the Tax Reform Act of 1984. We have obtained precedent-setting IRS and Department of Labor rulings and exemptions and been involved in landmark ESOP litigation matters. We provide ongoing counsel to the leading independent fiduciaries, public and private company sponsors, business owners, union and employee groups, and also advise lending institutions on the development of innovative financing techniques for utilizing the ESOP structure more fully.

Nonprofit Entities

Tax-exempt organizations face strict requirements and increased regulatory scrutiny with regard to executive compensation, taxable and non-taxable fringe benefits, and qualified and non-qualified retirement and welfare plans. We advise clients on issues the IRS is likely to consider in audits and inquiries, including board review of compensation, board members’ degree of independence, proper reporting of compensation and benefits on Form 990, and options for establishing the “rebuttable presumption of reasonableness” under the intermediate sanctions rules. We also identify and address key questions that should be considered before IRS contact occurs, including preparation and assembly of appropriate documentation to disclose, the valuing and reporting of deferred compensation arrangements, and information that is protected from disclosure by the attorney-client privilege.

Retirement Plans

We work with a broad range of multinational and domestic employers in designing, amending, spinning off, merging, administering and terminating 401(k) plans, ESOPs, cash balance and other defined benefit plans, and other qualified retirement plans. We regularly represent clients before the IRS, DOL and the PBGC on retirement plan matters, including determination letter requests, correction of plan defects, private letter rulings, advisory opinions and prohibited transaction exemptions. We help our clients negotiate service provider agreements, counsel plan sponsors on fiduciary and committee governance best practices, draft plan amendments and employee communications, and advise buyers and sellers in transactions involving retirement plans. We have extensive experience with cutting-edge issues such as de-risking techniques for defined benefit plans, ERISA requirements for employer securities in qualified plans, and sophisticated plan investment strategies.