In the Monthly Legal Update for the Greater Merrimack Valley Human Resource Association, NELGPC discussed recent IRS SECURE 2.0 guidance as well as recent state and federal court decisions impacting employers which reinforce the importance of careful drafting. In United States Secretary of Labor v. Sypris Solutions 401(k) Merged Retirement Savings Plan, No. 3:17-cv-784 (W.D. Ky. 2018), the USDOL entered into a consent order and judgment with Sypris Solutions Inc. regarding the misuse of the plan’s forfeiture account; the employer’s allocation of the forfeiture account violated plan provisions although such use could have been permissible under ERISA with proper plan language. The federal court in Massachusetts also recently found in favor of the employer when an employee whistleblower failed to cooperate in the investigation of allegations under the False Claims Act. In another decision, the First Circuit, rejecting the “default rule” for earning a commission, upheld an employer Commission Plan which expressly provided for “adjustments” and “contingencies” before the commission became “due and payable” although the commission was reduced to zero on one occasion and by more than half on another. A Massachusetts Superior Court also upheld “choice of law” provisions in an offer letter which allowed an employer to avoid some of the stricter provisions of the Massachusetts Wage-Hour laws in favor of another state’s laws.
All of these recent decisions warrant careful review of the language used by employers in their plan documents, offer letters, contracts, handbooks and commission plans. Our Labor, Employment and Benefits attorneys are ready to assist employers in drafting, reviewing and revising employment related documents to optimize both compliance and best practices, including for multi-state employers.
