LEGAL
A recent SEC report reminds regulated companies to implement measures to anticipate and investigate whistleblower complaints promptly and effectively.
The SEC’s 2015 Annual Report on the Dodd-Frank Whistleblower Program highlights that the SEC:
The 2015 report suggests that, in fiscal year 2016, the SEC will continue to:
The contours of the Dodd-Frank Act’s anti-retaliation provisions are unsettled. Several recent decisions have broadly interpreted the scope of their protections, including applying them to internal reports, although others decline to do so (for example, compare the Second Circuit’s Berman v. Neo@Ogilvy, LLC decision with the Eastern District of Virginia’s Puffenbarger v. Engility Corp. decision).
In light of the 2015 report and recent caselaw, and to best protect against whistleblower claims, in-house counsel should ensure that their companies’ compliance programs:
For more information on the whistleblower protections available to employees, see Practice Note, Whistleblower Protections Under Sarbanes-Oxley and the Dodd-Frank Act.
Public companies should evaluate their policies on limiting outside board memberships in light of upcoming changes to ISS’s and Glass Lewis’s proxy voting guidelines.
Under their revised guidelines announced in November 2015, both ISS and Glass Lewis will recommend against any director who sits on more than six public company boards in 2016, with that cap to be lowered to five boards beginning in 2017. ISS and Glass Lewis will also recommend against any director who is the CEO (for Glass Lewis, any executive officer) of a public company while sitting on more than two other public company boards, with Glass Lewis lowering its cap to just one other board in 2017.
While ISS’s and Glass Lewis’s current guidelines on director overboarding will not be tightened until 2017, in-house counsel should act now to:
Reducing overboarding can also assist in improving board diversity and refreshment over time. These issues have attracted significant investor interest and media attention in recent years.
For more information on the latest proxy voting guidelines of ISS and Glass Lewis, see Legal Update, ISS Releases 2016 Proxy Voting Guideline Updates and Legal Update, Glass Lewis Releases 2016 Proxy Guidelines.
Employers should be aware of delays and extensions involving two key provisions under the Affordable Care Act (ACA).
The Consolidated Appropriations Act of 2016, enacted in December 2015, included a two-year delay in the effective date of the ACA’s 40% excise tax on high-cost health coverage (a revenue provision known as the Cadillac Plan Tax). The excise tax, which applies to coverage that exceeds certain annual dollar limits, will now take effect for tax years beginning in 2020.
Also in December 2015, the IRS announced extensions of the early 2016 due dates for ACA information reporting, including statements provided to individuals. The extensions apply to ACA reporting requirements added to the Internal Revenue Code that require:
Specifically, the extensions delay the deadlines for several new forms and statements, including 2015 Forms 1095-B, 1095-C, 1094-B, and 1094-C. The extended deadlines:
Employers and other reporting entities that fail to meet the extended due dates are subject to penalties. Although the extensions offer employers additional time to collect the information required for the forms and to test systems and procedures for 2015 reporting, employers should not be lulled into thinking they have significant additional time to comply.
For more information on these ACA requirements, see Practice Notes, Cadillac Plan Excise Tax Under the ACA and ACA Information Reporting: Forms 1095-C and 1094-C (Overview).
This look at the major issues on the horizon for corporate counsel comes from Practical Law – an online legal know-how service. View all the looming issues now compliments of Practical Law The Journal, which covers the latest transactional and compliance topics that impact your practice. To gain access to more related know-how resources, please visit www.us.practicallaw.com.