Foley Hoag LLP

SUMMARY

We know that the recent financial crisis and related economic downturn unfortunately are causing many employers to consider ways to reduce operational expenses, including through workforce restructuring and layoffs. We offer a few preliminary considerations: any such reduction-in-force (RIF) must be carefully planned and executed both to minimize exposure to liability under various employment laws and to mitigate negative effects on employee morale and operations. The following are some issues for employers to consider as they grapple with whether and how to implement a layoff.

Questions Include:

• Is a Layoff Necessary?
• Voluntary or Involuntary Program?
• Develop Uniform Selection Criteria
• Conduct a Layoff Analysis
• Is Advance Notice Required
• Severance and ERISA
• Asking for a Release
• Don't Forget Immigration Implications
• Don't Lose Sight of Termination Basics

SUMMARY

Chapter 151B, the Massachusetts anti-discrimination statute, does not apply to small employers, meaning those with fewer than six employees. However, last Friday, the Massachusetts Supreme Judicial Court (“SJC”) held that an employee may nonetheless sue a small employer for discrimination under the Massachusetts Equal Rights Act. The decision has potential ramifications for all employers -- large or small -- because it suggests that a plaintiff has a claim for discrimination under the Massachusetts Equal Rights Act whenever Chapter 151B does not apply, such as discrimination claims brought by non-employees.

SUMMARY

Foley Hoag LLP’s interdisciplinary team counsels and protects the interests of its clients facing new realities, challenges and risks framed by today’s tumultuous economic and market conditions. By maintaining an active and engaged dialogue with our clients during this period of economic distress, our lawyers are better able to adapt to the changing legal needs of clients affected in the short term. More importantly, our immersion in their businesses and industries enables our lawyers to provide sound, strategic counsel to protect our clients’ interests in the longer term. The Economic Crisis Team delivers forward-thinking advice, focusing on long-standing core, integrated strengths of the firm.

Topics include:

• Financial investigations, enforcement proceedings and litigation
• Federal and state securities regulation
• Deal-making, corporate finance and investment restructuring
• Bankruptcy, corporate reorganization and financial disputes

SUMMARY

Section 409A is an extremely broad law that covers many arrangements not generally considered deferred compensation, such as stock options, bonus plans, and severance and change in control agreements. In general, 409A governs any arrangement where an employee or consultant has a vested right to compensation in one year that will be paid in a later year, unless the arrangement fits into one of the exemptions to 409A. Arrangements subject to 409A must comply with strict rules as to the time and form of payment, and it is very difficult to make changes to an arrangement once it is in place. Any deferred compensation arrangement that does not comply with 409A will subject the employee or consultant to income tax liability at the time that the right to payment vests (even if there is no right to receive payment at that time), together with a 20% penalty tax on the deferred amount. (continues)

SUMMARY

The Supreme Judicial Court (SJC) recently provided important guidance for determining whether a Massachusetts organization is properly classified as a nonprofit entity for exemption from local property tax.

SUMMARY

Three recent Massachusetts Supreme Judicial Court (“SJC”) decisions have clarified two areas of uncertainty relative to the Massachusetts Comprehensive Permit Statute, Mass. Gen. Laws Chapter 40B. The SJC has provided much-needed guidance as to (1) when municipalities can challenge Subsidized Housing Inventory (SHI) calculations, and (2) when developers are entitled to challenge comprehensive permit conditions. These decisions are of importance to anyone involved in the development, financing, or permitting of affordable housing projects in Massachusetts.

In two related cases decided on May 27, 2008, the SJC ruled that a municipality must exhaust its administrative remedies before bringing a court action contesting the Department of Housing and Community Development (DHCD)’s calculation of the municipality’s SHI. In the third case, decided on June 10, 2008, the SJC ruled that developers cannot successfully challenge conditions attached by local zoning boards to comprehensive permits unless they can demonstrate that those conditions render the proposed project uneconomic.

SUMMARY

Established in December 1980 by the partners of law firm Foley Hoag, The Foley Hoag Foundation is a private foundation that seeks to combat racism, especially among youth, in the City of Boston. The Foundation awards grants to organizations working to improve the racial climate in Boston by addressing issues of diversity and racism. Grantee organizations achieve their goals through a variety of means, including arts and cultural activities, youth leadership and recreational programs. Other grantees provide advocacy assistance, enabling individuals to confront racism through legal or political action. Some grantee organizations work to prepare young children to live in the reality of a multicultural society, others engage teens, and a few target a primarily adult constituency.

The Foley Hoag Foundation was the first—and remains the only— foundation to focus exclusively on the improvement of race relations in Boston. The trustees are fortunate to have the unqualified endorsement of Foley Hoag, which has provided an enormous amount of financial, administrative and moral support.

SUMMARY

Until now, most small tax-exempt organizations, defined as those with gross receipts of $25,000 or less per year, have not been required to file an annual information return with the Internal Revenue Service (the “IRS”). 

However, small tax-exempt organizations must now file an annual electronic information return – the Form 990-N, also known as the e-Postcard. This requirement covers all tax periods beginning after December 31, 2006. The e-Postcard must be filed no later than the 15th day of the 5th month following the end of the organization’s tax year. For example, an organization whose tax year ends December 31 must submit the e-Postcard by the following May 15.

SUMMARY

The I.R.S. recently issued its annual cost-of-living adjustments applicable in 2008 to qualified retirement (pension, profit-sharing, § 401(k), money purchase and stock bonus) plans.

SUMMARY

The directors of a not-for-profit corporation are bound by two general types of legal duties:

A duty of care

The duty to perform their responsibilities in good faith, in a manner reasonably believed to be in the best interest of the corporation, and with such care as an ordinarily prudent person would be in similar circumstances; and

A duty of loyalty

The duty to keep the interests of the corporation paramount above personal interests when acting for or on behalf of the corporation.

The following Ten Commandments provide examples of some of the actions a board of directors should take to act in accordance with its legal duties... (continues)

SUMMARY

This guide is intended to provide foreign businesspeople with an introduction to the basic kinds of laws and regulations that affect the conduct of business in the United States, and particularly in the Commonwealth of Massachusetts. The level of detail is varied, reflecting the nature of the legal areas discussed. For example, environmental law and taxation are subjects of detailed and technical regulation, while labor relations are governed as much by custom and practice as by direct regulation.

SUMMARY

Governor Romney recently signed a new law that subjects nonprofit corporations for the first time to Massachusetts tax on their unrelated business income. Until now, nonprofit corporations exempt from federal income tax under section 501 of the Internal Revenue Code enjoyed blanket exemption from the Massachusetts corporation excise, even for income subject to the federal unrelated business income tax.

SUMMARY

The 2002 Sarbanes-Oxley legislation adopted a series of provisions intended to help protect against the corporate governance abuses of the turn of the century, as exemplified by Enron and WorldCom. Those provisions include: (a) Section 201 – Auditor Independence requirements; (b) Section 301 – Audit Committee qualifications; (c) Section 302 – CEO/CFO Certified Quarterly Reports; (d) Section 404 – Management Assessment of Internal Controls; and (e) Section 406 – Code of Ethics for Senior Financial Officers.

SUMMARY

Last Friday, President George W. Bush signed into law the American Jobs Creation Act of 2004. The centerpiece of the legislation is the repeal of the extraterritorial income exclusion tax incentive for U.S. exporters. The extraterritorial income exclusion was the most recent U.S. tax incentive to be declared an illegal export subsidy by the World Trade Organization at the urging of the Western European governments.