A Victory for a Levin Ginsburg Client in the Seventh Circuit Court of Appeals

Court Of Appeals 7th Circuit - YouTube

In a victory for Levin Ginsburg’s client Nano Gas Technologies, Inc., the United States Court of Appeals for the Seventh Circuit reversed the district court’s interpretation of an arbitration award, holding that the defendant could not “wait until he dies” to pay a portion of a damage award. In Nano Gas Technologies, Inc. v. Roe, Case Nos. 21-1809; 1822 (7th Cir., Apr. 25, 2022) the Seventh Circuit ruled that the district court had misinterpreted an arbitration award in concluding that the defendant could satisfy a $500,000 judgment “in such manner as Roe chooses.” In refusing to allow Nano Gas to immediately enforce the underlying arbitration award, the district court interpreted the arbitrator’s “in such manner as [defendant] chooses” language as allowing the defendant to choose when to satisfy the arbitration award, if ever, including by whatever assets he had left at the time of his death. Nano Gas appealed from the district court’s judgment.

Agreeing with Nano Gas, the Appellate Court concluded that, although Mr. Roe “invited ambiguity” through an alternative reading of “in such manner as Roe chooses,” his reading was unreasonable. The Appellate Court recognized that Roe could not “refuse to turn over his only identifiable asset, choose hypothetical forms of payment that may never come to fruition, or require Nano Gas to wait until he dies.” The court agreed with Nano Gas that both the language of the arbitrator’s opinion and common sense resolved this issue. Finally, recognizing that although in certain cases district courts may send a case back to the arbitrator to clarify an award, the Seventh Circuit rejected that procedure in this case because the award’s language compelled only one conclusion.

The panel reversed the district court’s findings regarding Roe’s discretion to satisfy the $500,000 award and remanded to allow Nano Gas to resume enforcing the entire judgment without delay. Levin Ginsburg Shareholder and Chair of Litigation Department, Howard L. Teplinsky, authored the appellate briefs and argued the case on appeal.

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Recruiting Top Talent and Retaining Key Employees

Key Person Insurance | Protect your Business from Key Employee Loss

As we approach the new year and reflect on the radical changes occurring over the last 18 months, recruiting top talent and retaining key employees remains a significant challenge for many businesses. For that reason, many business owners are exploring additional tools and options to attract new talent and keep key employees.

One of these tools is a phantom equity plan. A phantom equity plan offers a business significant flexibility while at the same time giving an employee something of value that is intrinsically tied to the growth of the business. Phantom equity plans provide an employee some, but not all, of the benefits of being an equity holder without the complexity, additional documentation, and voting rights typically associated with equity ownership. These benefits may include: (1) receiving distributions or dividends when such benefits are paid to equity holders, (2) payments upon a sale of the company, or (3) payments upon retirement or separation of employment.

In exchange for providing an employee these added benefits, businesses realize several advantages. First, an employee feels rewarded when they are offered phantom equity, while at the same time creatively aligning an employee’s financial goals with the business’s success. Second, the terms of a phantom equity plan can be carefully crafted to ensure an employee continues working for a business before earning any financial benefit from a phantom equity plan. Finally, businesses can require that an employee execute updated non-compete and non-solicitation covenants that will be more defensible because the employee is receiving a significant added value (e.g., potential payments under the phantom equity plan) in exchange for signing the restrictive covenants.

While these programs are “simpler” by nature, businesses must still prepare these plans and administer them in compliance with the IRS code and other applicable statutes and regulations. The attorneys at Levin Ginsburg can help design, implement, and prepare a phantom equity plan that is a good fit for your business to allow you to recruit top talent and retain key employees. For additional help navigating these issues, feel free to contact Walker R. Lawrence, a partner in the employment law practice at Levin Ginsburg, at wlawrence@lgattorneys.com, or (312) 368-0110.

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City of Chicago Fast Tracks $15/Hour Minimum Wage Ordinance

On November 26, 2019 the Chicago City Council amended its Minimum Wage Ordinance to accelerate its $15/hour minimum wage hike four years ahead of schedule. Instead of tying the increases to CPI in 2020, the amendment will increase the minimum wage to $14/ hour on July 1, 2020 and to $15/hour July 1, 2021.

The update also increases the minimum wage for tipped workers to $8.40 an hour on July 1, 2020 and requires that it be set to 60% of the City of Chicago minimum wage going forward. On July 1, 2021 it will increase to $9 per hour. Employers can still use a tip credit to make up the difference, but employers will be required to true up any payments if the tip credit is not enough to cover for all hours worked, including overtime pay.

These changes will not immediately impact small businesses with less than 20 employees. Small businesses will only be required to increase the minimum wage to $13.50/hour on July 1, 2020 and $0.50 per year until it reaches $15 per hour in 2023. Employers will less than four employees are not covered by the minimum wage ordinance.

Finally, the City of Chicago’s changes will also eliminate the youth minimum wage exemption by 2025 and will increase the youth minimum wage to $10 per hour on July 1, 2020 until it reaches $15 per hour by 2024.

A breakdown of the relevant wage rates is below:

These changes are in addition to the update to the Illinois Minimum Wage Law that was enacted early this year in February. We provided a comprehensive updated on those changes in April, and you can read more about that here. Please contact us if you need any assistance complying with the Illinois or Federal Minimum wage and overtime laws at 312-368-0100 or Walker R. Lawrence at wlawrence@lgattorneys.com

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