On January 29, 2020, the House of Representatives passed the Comprehensive CREDIT Act of 2020 (the “Act”), which would change federal laws pertaining to consumer reporting agencies and credit checks in a number of ways. Significantly for employers, the Act includes an amendment (originally H.R. 3614 – “Restricting Credit Checks for Employment Decisions Act”) to the Fair Credit Reporting Act (“FCRA”), which would restrict the use of credit information for most employment decisions.

Currently, the FCRA does not expressly prohibit employers from using credit checks when making employment decisions. The Act would amend Section 604 of the FCRA by precluding employers from requesting a consumer report bearing on the creditworthiness, credit standing, or credit capacity of an individual for employment purposes, except in limited circumstances where:

  • the employer is required to obtain the report by federal, state, or local law or regulation;
  • the information contained in the report is being used with respect to a national security investigation; or
  • the report is necessary for a background check or related investigation of financial information that is required by federal, state, or local law or regulation.

Under the Act, if an employer intends to invoke one of these exceptions, the employer must disclose to the candidate the reason as well as a citation to the applicable law.

Note that this amendment of the FCRA would not impact other aspects of obtaining consumer reports for employment purposes, so employers would still be able to conduct background checks (subject to state and local restrictions).

The final vote of 221-189 on the Act largely split along party lines. Republican House members expressed concern about H.R. 3614 in committee review of the original bill, noting that the legislation could have unintended and undesirable consequences—particularly in the financial services industry.  Members observed that an employee’s “financial history is particularly important in the financial services industry, where employees routinely have access to vast amounts of personal and financial information.”

As of last year, 11 states – including California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington – and the District of Columbia have enacted laws that restrict the use of credit reports in employment decisions. Cities such as Philadelphia, New York City and Chicago have also passed laws regarding the use of credit checks in employment settings. While state and local laws differ in some respects, many do include narrow exceptions allowing credit checks for banks and financial institutions, positions with access to specified personal information, and positions that involve access to assets above a certain threshold, or that have signatory authority.

The Act now heads to the Senate, where it seems unlikely to pass in its current form, given the partisan divide regarding various provisions contained within the 197-page bill.  We will continue to monitor the legislation.

Predictable lifetime income is often of paramount concern to retirees.  Yet, as employer-sponsored retirement plans have moved away from the traditional pension plan model, participants in defined contribution plans may be faced with managing their own account balances and plan distributions, which may not lead to a steady stream of lifetime income in retirement.  The Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”), signed into law on December 20, 2019, may aid in securing retirements.   Employers who sponsor defined contribution retirement plans, such as 401(k) plans, now have: (1) new participant disclosure obligations; (2) the ability to adopt certain portability design features related to lifetime income investment options; and (3) guidelines to encourage inclusion of lifetime income investment options in plan investment line-ups.

Lifetime Income Disclosures

For participant statements furnished more than one year after the last applicable guidance (including interim final regulations, model disclosures or assumptions) issued by the Department of Labor, employers must include in at least one participant benefit statement issued during any 12-month period a lifetime income disclosure.  This disclosure will be required regardless of whether the employer’s plan includes a lifetime income or annuity distribution option.  The purpose of the disclosure will be to set forth the lifetime income stream equivalent of the participant’s total account balance under the plan (i.e., to provide an estimate of what the participant could receive from the plan if their benefits were paid in the form of a qualified joint and survivor annuity (assuming a spouse of equal age to that of the participant) or single life annuity).    Requirements for model disclosures will include (a) provisions that the lifetime income stream is only an illustration, (b) an explanation that actual payments pursuant to a lifetime income stream purchased with the account balance will depend on numerous factors, and (c) an explanation of the assumptions used in the illustration.  When guidance is issued, plan sponsors will need to determine if these disclosures necessitate additional communications to plan participants, especially if an annuity is not actually an option for a plan distribution.  It remains to be seen whether this disclosure obligation will be useful to participants, and whether it will become a factor which leads to the proliferation of available lifetime income distribution options.

Portability of Lifetime Income Options

The removal and replacement of a lifetime income investment as a plan option can lead to the imposition of fees associated with the discontinuation.   At the same time, prior to the SECURE Act, participants in defined contribution plans could request an in-service plan distribution only in limited circumstances if the plan so allowed—thereby preventing a participant from avoiding fees or preserving the otherwise discontinued investment through a distribution or rollover.   Effective for plan years beginning after 2019, the SECURE Act addresses these issues by providing  for certain allowances where a lifetime income investment ceases to be an option under a qualified defined contribution plan, a 403(b) plan or governmental 457(b) plan.  In such cases (except as otherwise provided in the SECURE Act guidance), the plan may allow certain qualified distributions to another employer retirement plan or individual retirement account, or may allow distributions of a lifetime income investment in the form of a qualified plan distribution annuity contract, if made within a 90-day period ending the date that the investment is no longer authorized to be held as an investment option under the plan.  This flexibility should not only allow participants invested in such de-selected options to avoid certain fees, but should also assist plan fiduciaries responsible for deciding whether to remove or replace lifetime income options.

Fiduciary Safe Harbor for Selection of Lifetime Income Provider

Plan fiduciaries must prudently select and monitor plan investment options.  Though existing regulations provide a safe harbor with respect to selection of an annuity provider and a contract for benefits distributions from a defined contribution plan, there remains uncertainty among plan fiduciaries regarding their potential liability in connection with selecting a lifetime income provider such as an insurance company.  The SECURE Act specifies optional measures that a plan fiduciary may take in selecting an insurer in order to fulfill its prudence requirements vis à vis assessing the insurer’s ability to satisfy its obligations under the contract.  While the new guidance is not definitive in that it neither establishes minimum requirements nor provides the exclusive means for satisfying requirements, it identifies prudent measures that include: engaging in an objective, thorough search for potential insurers, evaluating the financial capacity of the insurers and the costs of the contract, and concluding that at the time of the selection the insurer is financially capable of meeting its obligations and that the costs are reasonable.  This diligence will require determining that the insurer: is licensed; at the time of selection (and for each of the preceding seven years) operated under a certificate of authority from its state Insurance Commissioner that was not revoked or suspended; has filed audited financial statements and undergoes requisite exams, maintains applicable reserves, and is not operating under an order of supervision, rehabilitation or liquidation.  Plan fiduciaries are not required to select the contract with the lowest cost.   The protections do not extend to the terms of the underlying insurance contract, which still requires a separate fiduciary analysis.

Plan sponsors and fiduciaries should monitor the issuance of further guidance concerning the required disclosures, so that timely measures can be taken to ensure compliance.  In addition, if plan sponsors and fiduciaries have not already considered offering lifetime income options through a defined contribution plan, the new guidance presents an opportunity to weigh the pros and cons.

Our colleague Janene Marasciullo, a Member of the Firm at Epstein Becker Green, has a November 2019 post on the Trade Secrets & Employee Mobility blog that will be of interest to many of our readers in the financial services industry: “Enforcing Non-Solicitation Agreements Against Financial Professionals: A Court Finds Financial Professionals Have a Duty to Notify Clients About a Change of Employment.”

Following is an excerpt:

A recent decision in Edward D. Jones & Co., LP v. John Kerr (S.D.In. 19-cv-03810 Nov. 14, 2019), illustrates the unique challenges that broker-dealers may face when enforcing post-employment covenants that prohibit former registered representatives (“RRs”) from soliciting clients. Edward Jones sued Kerr, a former RR, to enforce an employment contract that required him to return confidential information upon termination and prohibited him from “directly or indirectly” soliciting any Edward Jones’ client for a period of one year.  Although Kerr did not challenge the validity of the confidentiality and non-solicitation provisions, the court denied Edward Jones’ request for a temporary restraining order (“TRO”) because it found that RRs who change firms have a duty to notify clients of material changes to their accounts, which includes changes of employment.  The Kerr opinion provides a useful primer for financial firms seeking to enforce post-employment restrictive covenants. …

Read the full post here.

Fiduciaries of employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) that appoint investment managers (“Appointing Fiduciaries”) will be interested in the opinion of the U.S. District Court for the Western District of Pennsylvania in Scalia v. WPN Corporation, et al (“WPN”) regarding their duty to monitor investment fiduciaries.  Given the potential risk related to a breach this fiduciary duty, the WPN opinion is likely to be an important one for Appointing Fiduciaries.

In WPN, the Department of Labor alleged that the Retirement Committee for two plans sponsored by Wheeling Corrugating Company and its affiliates (the “Retirement Committee”) breached its fiduciary duty by failing to monitor the investment fiduciary appointed to manage plan assets (the “Investment Manager”) and failing to remove the Investment Manager when it did not follow instructions from the Retirement Committee to diversify plan investments.  The Retirement Committee took the position that it fulfilled its duty to monitor by implementing a routine monitoring procedure, adhering to it, reviewing reports from an investment adviser, identifying the actions of the Investment Manager that were not consistent with Retirement Committee directions, and taking corrective action with the assistance of counsel.  The court agreed with the Retirement Committee and granted its motion for summary judgment.

In its opinion, the WPN court provided the following guidance for assessing the extent to which an Appointing Fiduciary has a duty to monitor and, if so, for determining whether the Appointing Fiduciary has fulfilled that duty:

  • No Liability If No Notice. The obligation of an Appointing Fiduciary to take action is not triggered until the Appointing Fiduciary has notice of a possible breach on account of a particular action by, or outcome due to, an investment fiduciary.  In determining whether an Appointing Fiduciary has such notice, the focus is on the extent to which the Appointing Fiduciary, at a given point in time, reasonably could have predicted the action or outcome that followed.  An Appointing Fiduciary is not required to know of an action or outcome before it occurs.

With respect to the Retirement Committee, the court noted that the DOL admitted that a breach by the Investment Manager occurred before monitoring by the Retirement Committee could begin.

  • Quarterly Monitoring with Corrective Action. After implementing proper monitoring procedures, an Appointing Fiduciary has a duty to review and evaluate the information reported through such procedures and take corrective action as required.  The DOL has stated that an Appointing Fiduciary will satisfy this duty if the Appointing Fiduciary adopts and adheres to routine monitoring procedures sufficient to alert the Appointing Fiduciary to deficiencies in performance that could require corrective action.  In its discussion of this duty, the WPN court indicated that at least one court has found quarterly monitoring to be sufficient and noted that the Retirement Committee received quarterly reports from its investment adviser on the plans’ investments.

With respect to the Retirement Committee, the WPN court explained that immediately after learning that the Investment Manager had not diversified plan investments, the Retirement Committee, together with its ERISA attorney, began to develop a strategy to resolve the situation while retaining as much of the value of the assets as possible.  The assets were ultimately sold and the Investment Manager terminated.

  • No Duty to Review All Decisions of an Investment Fiduciary. An Appointing Fiduciary’s duty to monitor is not a duty to review every decision made by an investment fiduciary. The courts have maintained this position even during a financial crisis.

Take-Aways For Appointing Fiduciaries

The guidance from the WPN court is essentially a roadmap that can assist an Appointing Fiduciary in satisfying its duty to monitor the investment fiduciaries that it has appointed.  The WPN court found that the Retirement Committee generally followed this roadmap because, even though the Retirement Committee did not have sufficient notice to prevent the Investment Manager’s failure to diversity plan assets, the Retirement Committee implemented action as soon as practicable after evaluating the available information regarding the actions of the Investment Manager.  Therefore, an Appointing Fiduciary that follows this roadmap should be able to mitigate the risk of failing to fulfill its duty to monitor.

On September 6, 2019, the U.S. District Court for the Northern District of California preliminarily approved a settlement in Harvey v. Morgan Stanley Smith Barney LLC.  The significance of the result is two-fold.  First, substantively, it is a reminder to financial services firms of potential liability under California labor law when advisors are required to pay for business expenses.  Second, procedurally, the court’s approval of the settlement is edifying on the subject of parallel class actions.

In the Harvey case, plaintiffs challenged Morgan Stanley Smith Barney’s (“MSSB”) Alternative Flexible Grid expense program on the grounds that it violated California labor law by failing to reimburse their reasonable and necessary business expenses.

Although the program allowed brokers to annually deduct money from pretax earnings to cover certain support staff, marketing and other costs, plaintiffs argued they were entitled to direct reimbursement of all of their expenses, rather than a tax-advantaged payroll deduction.

The settlement established a fund of more than $10 million for the class, which included at least 2,800 professionals.

Plaintiffs in another class action, Chen v. Morgan Stanley Smith Barney LLC, which involves similar claims and is pending in state court in California, had objected to the settlement on the grounds that it was a so-called “reverse auction,” which would allow MSSB to sidestep a lawsuit in state court.  As the court observed, “[a] reverse auction is said to occur when ‘the defendant in a series of class actions picks the most ineffectual class lawyers to negotiate a settlement with in the hope that the district court will approve a weak settlement that will preclude other claims against the defendant.’”

In rejecting the Chen plaintiffs’ characterization of the settlement, the court noted that “simply discussing settlement with the plaintiffs in parallel proceedings is insufficient to establish that an impermissible ‘reverse auction’ has occurred because it ‘would lead to the conclusion that no settlement could ever occur in the circumstances of parallel or multiple class actions—none of the competing cases could settle without being accused by another of participating in a collusive reverse auction.’”  The court added that the requisite “showing of impropriety” was absent here, opining that a reverse auction did not occur for several reasons, including:

  1. Plaintiffs’ counsel was not “ineffectual,” insofar as they had extensive experience in employment and consumer litigation and served as class counsel in over 80 certified class actions, including several against brokerage houses.
  2. There was “meaningful discovery” before the settlement.
  3. The parties engaged in “arm’s-length mediation.”
  4. The settlement amount—6.6% of the total liabilities alleged in the complaint—compared favorably to other recent settlements reached on behalf of financial advisors in California.
  5. The relief to the class would be “faster and more certain” than it would be in the related state court case.

The court’s analysis offers guideposts to financial services employers and other parties aiming to ensure approval of settlements where multiple class actions are concerned.

On August 20, 2019, the Securities and Exchange Commission (“SEC”) charged Mosaic Capital, LLC, formerly known as AOC Securities, LLC (“AOC”), and its CEO with failing to adequately supervise an employee who engaged in securities fraud.  Pursuant to the SEC Orders, AOC and its CEO were ordered to pay penalties of $250,000 and $40,000, respectively.  The SEC’s actions serve as a reminder to broker-dealers—and members of firm management—of the potential for liability based on the actions of a self-dealing employee, and the need to guard against such activities.

The employee was a registered broker associated with AOC from May 2015 until he pleaded guilty to a host of criminal counts, including securities fraud, in April 2017.  The employee was charged with engaging in a fraudulent scheme, whereby he provided inflated price quotes on mortgage-backed securities to a New York-based investment advisor. In exchange, the advisor promised to send securities trades to AOC.  While AOC and its CEO did not admit to knowing about this fraudulent scheme (an element not required for supervisor liability) the SEC ultimately determined that they “failed to establish policies or procedures reasonably designed to prevent and detect [the employee’s] misconduct.”

Section 15(b) of the Securities and Exchange Act of 1934, as amended, makes broker-dealers and individuals associated with broker-dealers liable for failing to reasonably supervise an individual who violates federal securities laws.  However, under the same Section, broker-dealers and supervisors can avoid liability if: (1) the broker-dealer has established procedures that would “reasonably be expected to prevent and detect” violations of the securities laws by an individual; and (2) the individual’s supervisor “has reasonably discharged the duties and obligations” pursuant to those procedures.

Determining who is a “supervisor” under Section 15(b) is a fact-intensive exercise, but ultimately depends on whether the person in question has the requisite degree of responsibility or authority to affect the conduct of the employee alleged to have violated federal securities laws.  In a September 30, 2013 guidance document, the SEC’s Division of Trading and Markets provided the following non-exhaustive list of factors to consider in determining supervisory status:

  • Has the person clearly been given, or otherwise assumed, supervisory authority or responsibility for particular business activities or situations?
  • Do the firm’s policies and procedures, or other documents, identify the person as responsible for supervising, or for overseeing, one or more business persons or activities?
  • Did the person have the power to affect another’s conduct? Did the person, for example, have the ability to hire, reward or punish that person?
  • Did the person otherwise have authority and responsibility such that he or she could have prevented the violation from continuing, even if he or she did not have the power to fire, demote or reduce the pay of the person in question?
  • Did the person know that he or she was responsible for the actions of another, and that he or she could have taken effective action to fulfill that responsibility?
  • Should the person nonetheless reasonably have known in light of all the facts and circumstances that he or she had the authority or responsibility within the administrative structure to exercise control to prevent the underlying violation?

When considered a “supervisor,” an individual must reasonably supervise employees with an eye towards preventing federal securities violations.  The SEC’s sanctions against AOC and its CEO highlight the wisdom in establishing robust, written policies and procedures for detecting and preventing federal securities violations, including unmistakable delegations of supervisory authority and practices designed to ensure that supervisors are fulfilling their duties under those policies and procedures.

Broker-dealers (“BDs”) should be aware that, on June 5, 2019, the SEC adopted “Regulation Best Interest” (“Reg BI”), which requires BDs and their registered representatives (“RRs”) to “act in the best interest of the retail customer,” when “making a recommendation” regarding “a securities transaction or investment strategy.”  In addition, the SEC’s new rules require BDs to deliver Form CRS relationship summaries (“Form CRS”) to retail customers.  BDs will need to be in compliance with Reg BI and Form CRS, which were accompanied by more than 1,000 pages of explanation, by June 30, 2020.   On August 7, 2019, FINRA issued Notice 19-26, which informed BDs and RRs of the need to comply, but offered no guidance on compliance.  This post summarizes some of the key aspects of Reg BI and Form CRS.

The Obligations Required by Reg BI

Reg BI does not impose a general fiduciary duty.  Rather, Reg BI requires BDs and RRs to comply with four obligations: (i) a disclosure obligation; (ii) a care obligation; (iii) a conflict of interest obligation; and (iv) a compliance obligation.  Reg BI’s obligations of care and compliance resemble obligations already set forth in FINRA Rules 2111 and 3110, respectively.   In contrast, Reg BI’s disclosure and conflict management obligations create new duties, and require BDs to update their written supervisory procedures, internal and external procedures, and certain compensation practices.

The Obligation of Care Largely Mirrors FINRA’s “Suitability” Rule

Reg BI’s obligation of care closely resembles the suitability standard of FINRA Rule 2111.  Under Reg BI, BDs and their RRs must have a reasonable basis to believe that a recommendation:  (1) would be in the best interest of at least some retail customers (Rule 2111’s reasonable basis suitability test); (2) is in the specific customer’s best interest (Rule 2111’s customer-specific suitability test); and, (3) if the recommendation involves a series of transactions, the transactions should not be excessive or place the BD’s financial interests ahead of the customer’s interests (Rule 2111’s quantitative suitability rest).

In addition, Reg BI expressly requires BDs and RRs to consider “the costs associated with the recommendation,” and to refrain from placing their own financial interests ahead of the customer.  Although Reg BI does not require a BD to recommend the lowest cost option, the SEC “elevated” cost consideration to the text of Reg BI to emphasize that the cost of a product, transaction, or account type (asset-based fees versus transaction-based fees) is “always relevant” to—though not always dispositive of—whether a recommendation is in the customer’s best interest.  Thus, to ensure compliance, BDs should train their RRs to: (1) evaluate and discuss the costs of both products and account types with retail clients at the time of a recommendation, and (2) document those discussions.  These discussions will be critical to satisfying not only the care obligation, but, as explained below, the disclosure obligation as well.  BDs also should confirm that their written supervisory policies reflect these procedures.

New Burdens Associated with the Obligation of Disclosure and Form CRS

Reg BI expressly requires BDs and RRs to make “full and fair” written disclosures at the time of any recommendation, concerning (i) the material fees and costs associated with the transaction, holdings, and accounts; (ii) the type and scope of services; (iii) any limitation on services offered; and (v) any conflict of interest.  Although account-opening documents and confirmations may contain some of these disclosures, Reg BI requires disclosures that are more detailed than those required by current law.   For example, Reg BI requires firms to disclose: (1) whether they are acting as a BD, a registered investment advisor (“RIA”), or a dual registrant; (2) the duty of care to which the firm is held, including whether the firm will make recommendations or engage in ongoing account monitoring; (3) the variance in fees associated with brokerage accounts and advisory accounts; (4) the existence of any conflicts of interest; and (5) any disciplinary and legal history.  These disclosures are largely intended to ensure that retail customers understand whether they are working with a BD, who must act in their interest, or an RIA, who must act as a fiduciary.  The disclosures are also designed to assist customers in determining whether they should choose a brokerage account, where fees are charged for transactions, or an advisory account, where fees are based on a percentage of assets.  The SEC’s explanatory comments about the disclosure obligation endorsed restrictions regarding the use of the titles “advisor” and “adviser” and stated it would “presume” that BDs who are not also registered as RIAs violate the disclosure obligation when they refer to themselves or their RRs as  “advisors” or “advisers.”

Firms will make many, but not all, of these disclosures via the new Form CRS.  The SEC has published templates of Forms CRS for BDs, RIAs, and dual registrants, which include language that firms must include in their Form CRS disclosures.  Notably, Form CRS requires firms to compare the fees associated with transaction-based brokerage accounts with the fees associated with fee-based advisory accounts.  Form CRS also requires the BD to state that it has “a legal or disciplinary history” if either the BD or any of its RRs has made disclosures concerning criminal proceedings, regulatory proceedings, judicial proceedings, or unsatisfied judgments on their Forms BD, U-4 or U-5, or if an RR has reported a customer complaint or a specified termination on a Form U-4 or Form U-5.   Finally, all firms must include “conversation starters” on Form CRS to help investors ask questions that will assist them in choosing between firms and between brokerage and advisory accounts.

BDs must submit their initial Form CRS to FINRA via the Central Registration Depository (“CRD”) no later than June 30, 2020, and must update the Form CRS within 30 days if there are any “material changes.”  BDs must begin to deliver Form CS to their retail customers once the Form CRS becomes effective, and must post the form on their websites, if they have one, in a readily accessible format.   BDs will be required to deliver the Form CRS to new customers at the earliest of: making a recommendation, opening an account, or executing a transaction.

BDs should begin preparing their Form CRS and additional disclosures early, in light of the scope of these obligations.  This will ensure the timely completion of Form CRS and any additional disclosure documents and updates to written supervisory procedures, and afford time for BDs to provide training to RRs about how to respond to customer questions concerning the Form CRS.  In addition, BDs that are not dually registered as RIAs should evaluate the risks of referring to themselves and their RRs as “advisors” or “advisers” in their communications with the public and with customers.  Finally, BDs may consider whether to support RRs in seeking expungements of inaccurate or meritless information regarding customer complaints.

The New Burdens Associated with the Conflict of Interest Obligation

Regulation BI also requires BDs to “establish, maintain, and enforce policies” designed to:  (1) identify and disclose conflicts of interest, and (2) eliminate conflicts that cannot be ameliorated by disclosure.

The SEC has opined that BDs and RRs act under a remediable conflict of interest when:  (1) selling proprietary products; (2) offering a limited range of products; and (3) offering products with substantial variations in compensation to the BD and RR.  Reg BI permits firms to remediate these conflicts with appropriate disclosures—which are in addition to the disclosures included in Form CRS.

However, the SEC has concluded that sales contests, quotas, and bonuses based on the sale of specific securities within a limited time period undermine one’s ability to make recommendations that serve the customer’s best interest, and thus, the conflicts created by such practices cannot be remediated by disclosure.  Therefore, Reg BI requires BDs to eliminate these compensation practices.  Note, however, that Reg BI does not require BDs to eliminate compensation tied to total production or asset accumulation.

In sum, BDs should review their product offerings to identify any conflicts that must be disclosed, and to develop procedures for disclosure and documentation thereof.  Further, despite the June 2020 deadline for compliance, firms should consider eliminating sales contests and quotas as soon as possible, particularly to avoid state-level regulatory action and customer-generated litigation.

The Compliance Obligation

Finally, Reg BI requires firms to establish and enforce written policies “designed to achieve compliance with” Reg BI.  The SEC adopted a flexible approach, which, like FINRA Rule 3110, allows firms to adopt procedures that reflect the firm’s scope, size, and business lines.  The SEC has suggested that a reasonable compliance program would include: “controls; remediation of non-compliance; training; and periodic review and testing.”   In addition, the SEC amended SEA Rules 17a-3 and 17a-4 to require BDs to keep records concerning recommendations and the delivery of Form CRS to customers for a period of six years.

* * *

In conclusion, though Reg BI’s obligations of care and supervision are familiar, its disclosure and conflict management obligations are largely new—and extensive.   Therefore, firms should begin the process of conforming to Reg BI, as outlined herein, post haste.

For many, the topic of workplace violence may, understandably, exclusively invoke thoughts of the types of mass shootings and other employee-on-employee violence that commands the most extensive media coverage.  Financial services employers, though, like employers in other significantly public-facing industries, must address a broader array of concerns—ranging from threating behavior by clients, to domestic abuse spilling over into the workplace.  The legal framework that has, substantially in the past decade, come into being around issues of workplace violence in some respects provides employers with important tools for addressing workplace violence, but, in other respects, can complicate employers’ efforts to maintain a safe workplace.

In a recent video webinar, Elizabeth K. McManus and Edward M. Yennock, members of Epstein Becker & Green’s Financial Industry Service Team, discussed measures that employers may take to prevent workplace violence and to address threats before they materialize into a crisis, as well as some of the challenges—both legislative and practical—that employers face in dealing with these issues.  Topics explored include, among others: creating an effective workplace violence policy, recognizing and reporting potential threats, navigating the risks and regulations associated with mental illness and domestic violence, complicating factors such as the so-called “parking lot” gun laws, and the ability of employers to obtain workplace protection orders in a number of jurisdictions.

The following is a clip from the webinar:

Our Employee Benefits and Executive Compensation practice now offers on-demand “crash courses” on diverse topics. You can access these courses on your own schedule. Keep up to date with the latest trends in benefits and compensation, or obtain an overview of an important topic addressing your programs.

In each compact, 15-minute installment, a member of our team will guide you through a topic. This on-demand series should be of interest to all employers that sponsor benefits and compensation programs.

In our newest installmentTzvia Feiertag, Member of the Firm in the Employee Benefits and Executive Compensation practice, in the Newark office, presents “HIPAA Privacy and Security Rule Compliance.”

While employers themselves are not directly regulated by the Privacy and Security Rules of the Health Insurance Portability and Accountability Act (“HIPAA”), most employers that sponsor group health plans have ongoing compliance obligations. This crash course offers a brief overview of who and what is covered by these rules, why employers should care about HIPAA compliance, and five tips to maintain compliance.

Click here to request complimentary access to the webinar recording and presentation slides.

In the financial services industry, investigations by the government or self-regulatory organizations are commonplace, and because they inevitably involve employee conduct (or misconduct), there is frequently an internal employment-related investigatory component. With potential financial liability and reputational harm ever-present, the strength of a company’s investigatory process is critical.

In a recent video webinar, John F. Fullerton III, co-leader of Epstein Becker & Green’s Financial Industry Service Team, spoke about when materials related to an internal investigation can and cannot be shared with a third party – such as a forensic accounting firm – while still maintaining the attorney-client privilege in connection with the investigation.