Employee Benefits and Executive Compensation

Paul R. O'Rourke

Baker Donelson's Employee Benefits and Executive Compensation practice pre-dates the enactment of the Employee Retirement Income Security Act of 1974 (ERISA). Our experience and depth in the field have attracted many leading local, regional and national clients, involving single-person or single-entity arrangements as well as controlled group, multiple-employer and multiemployer (Taft Hartley) plans. The sponsors of these plans include taxable and pass-through entities, as well as plans of governmental, church and other tax-exempt employers. We offer a fully integrated practice that includes both counseling and litigation of ERISA and non-ERISA claims in all state and federal trial and appellate courts.

We currently advise several hundred plan sponsors in various industries, including manufacturing and distribution, financial institutions, technology, health care, hospitals and medical service providers and educational institutions. Our lawyers are familiar with issues unique to collectively bargained funds, multi-employer plans and welfare arrangements and fully insured plans.

Employee Benefits

Our employee benefits attorneys are experienced in dealing with the issues that arise under the Internal Revenue Code, ERISA, ADEA, ADA, FMLA, HIPAA, USERRA and COBRA. They work closely with clients and their professional advisors in designing, drafting and administering the entire spectrum of employee benefits plans. These include, for example:

  • Tax Qualified Retirement Plans, such as pension plans, 401(k) plans and ESOPS
  • Welfare Benefit Plans, such as life, disability, accident, health and flexible compensation (cafeteria) plans
  • Supplemental Executive Retirement Plans and all types of deferred compensation arrangements, including stock options, group insurance and split dollar insurance.

We maintain IRS-approved volume submitter plans. These pre-approved plans allow for economical implementation and maintenance of various types of retirement plans by our clients. We also custom design and obtain approval of individually designed retirement plans for those clients who need more flexibility.

Our Employee Benefits lawyers work closely with other Baker Donelson practice groups, including Labor & Employment, Health Care and Taxation. They provide an in-house resource for administrative services agreements, stop-loss insurance policies for self-insured group medical plans and negotiation of labor agreements.

Our lawyers have held leadership positions in national and regional professional organizations. They are regularly engaged to speak before professional groups and have published extensively on employee benefits subjects for the American Bar Association Tax Section Employee Benefits Committee; the American Bar Association Real Property, Probate and Trust Law Section; the Southern Employee Benefits Conference and the American College of Employee Benefits Counsel, among others.

Executive Compensation

Our Executive Compensation attorneys regularly advise on the planning, development and implementation of simple and complex executive compensation programs for publicly and privately held companies. We address issues including severance pay arrangements, tax, employee benefits, ERISA, corporate securities, stock-based compensation, employment law, retirement, deferred compensation and bonus arrangements.

Litigation, Administrative Proceedings & Alternative Dispute Resolution

Our litigation attorneys are experienced in ERISA and non-ERISA benefit claims. We routinely represent both claim and plan administrators in the defense of claims in state and federal courts as well as administrative agencies, including the Internal Revenue Service, Department of Labor and the Pension Benefit Guaranty Corporation. We also represent clients with claims against service providers to the plans or their fiduciaries. We regularly assist our clients in responding to agency inquiries regarding compliance, audits or investigations, reporting and documentation problems, fiduciary duties and prohibited transaction provisions.

Our group is skilled at effectively handling large class actions and complex lawsuits. We maintain an active appellate practice at every level in state and federal courts and regularly assess an action for alternative dispute resolution options.

Representative Matters

  • ESOP& ERISA Class Action: In an interpleader lawsuit involving complex ERISA and federal tax issues, we successfully represented a class of approximately 30,000 current and former HealthTrust employees with claims to certain disputed assets from a terminated ESOP maintained in the form of HCA stock. An opposing class of approximately 50,000 former HealthTrust employees also asserted entitlement to the disputed assets. At issue was whether the employer's 1991 amendments to its ESOP plan documents violated either ERISA or the Internal Revenue Code. The federal district court agreed with our position that the employer's 1991 amendments to the ESOP were lawful and that the employee class represented by our attorneys was entitled to the disputed assets. Ultimately, the class members who were represented by the Firm were awarded 70% of the disputed assets in the form of HCA stock valued at approximately $170 million.
  • Governmental Plans: We represent a number of federal and other governmental clients at various levels, in matters ranging from the routine to very unusual and complex. Our attorneys helped a federal agency obtain IRS approval for the termination and subsequent reestablishment of its retirement plan, as well as approval for related distribution, consent and taxation matters.
  • Bank ESOPs: The Firm has significant representation of banks with ESOPs. In 2002, we obtained new IRS-favorable determination letters for 80 bank ESOPs in addition to approvals for non-bank plans.
  • ERISA Class Action: Successfully defended major dental insurer in class action brought in federal district court.
  • Represented the corporate plan sponsor in establishing an Employee Stock Ownership Plan which purchased $37 million worth of company stock from the family who owned the company, including negotiating the terms of the purchase agreement, bank loan agreements and obtaining tax deferral for the selling shareholders under section 1042 of the Internal Revenue Code.
  • Represented an Employee Stock Ownership Plan Trustee in a suit brought by plan participants for breach of fiduciary duty and other claims and disposed of the matter by summary judgment without a trial.
  • Represented major insurance companies in defending ERISA claims for life, health and disability benefits.
  • Represented and advised a major public company throughout the process of selecting a new vendor for its 401(k) plan recordkeeping and investments, and drafted, installed and obtained tax exempt qualification for the plan.
  • Drafted and implemented a non-tax qualified executive deferred compensation plan for several hundred executives of a major public company.
  • Drafted a new group health plan with multiple benefit options for a major public company with over 10,000 employees nationwide, providing advice and consulting regarding HIPAA, COBRA and ERISA issues.
  • Provided advice to a major public company regarding ERISA and employee benefit issues in connection with the acquisition of a new operating unit.