Ending a more than 15-year-long legal battle, the Fifth Circuit on May 24, 2019, unanimously affirmed the dismissal of a proposed class action against subsidiaries of UBS AG, alleging violations of U.S. securities laws for their role as a broker of Enron’s employee stock option plan and for failure to disclose material information about Enron’s “financial manipulations.” Lampkin et al. v. UBS PaineWebber Inc. et al., No. 17-20608 (5th Cir. May 24, 2019).
Continue Reading Fifth Circuit Affirms Enron Broker Not Liable to Employee Stock Option Holders for False or Withheld Information

On July 31, 2019, Governor J.B. Pritzker signed a law prohibiting Illinois employers from asking job applicants or their previous employers about salary history.

The law amends the Equal Pay Act of 2003, which made it illegal to discriminatorily pay employees on the basis of sex or race. The impetus behind the new salary history amendment is an effort to close the gender wage gap. According to a news release from the governor’s office, women in Illinois earn 79% of what men earn.
Continue Reading Salary History Off-Limits Under New Illinois Equal Pay Law

In In re Lehman Bros. Holdings Inc. 855 F.3d 459 (2d Cir. 2017), the United States Court of Appeals for the Second Circuit affirmed a district court order subordinating the claims of former Lehman Bros. (“Lehman”) employees for undelivered equity-based compensation to those of the defunct bank’s general creditors. The Court determined the compensation benefits were securities that had been purchased by the former employees when they agreed to receive them in exchange for their labor and the asserted damages arose from those purchases, requiring the claims’ subordination under the Bankruptcy Code. The decision is important to employees and employers weighing the value of hybrid compensation packages and creditors seeking to safeguard their priority position among bankruptcy claimants.  
Continue Reading Second Circuit Holds that Contingent Equity-Based Compensation of Former Lehman Employees are Subordinate to Creditor Claims