News & Analysis as of

Duty of Loyalty

Foley & Lardner LLP

Delaware Law on Fiduciary Duties and Stockholder Agreements

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Delaware corporate law is renowned for its balance between flexibility in business arrangements and the fundamental principles of fiduciary accountability. One of the areas where this balance is most evident is in the...more

Verrill

Spence v. American Airlines: A Texas Court’s View of the Duty of Loyalty under ERISA

Verrill on

Since we last discussed environmental, social, and corporate governance (“ESG”) developments in the context of ERISA retirement plans, ESG litigation has taken a rather unexpected turn. Although the plan lineup in Spence v....more

Fisher Phillips

Washington Supreme Court Significantly Limits Moonlighting Restrictions for Low Wage Employees: Your 4-Step Plan for Compliance

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In a first-of-its-kind decision, the Washington Supreme Court took aim at the ability of employers to prevent low wage employees in the state from “moonlighting” or otherwise supplementing their income during their...more

Ary Rosenbaum - The Rosenbaum Law Firm P.C.

American Airlines gets split decision loss in ESG lawsuit

A Texas federal district court ruled that American Airlines breached its fiduciary duty of loyalty, but not its fiduciary duty of prudence, in allowing its $26 billion 401(k) plan to be influenced by environmental, social,...more

Dorsey & Whitney LLP

Washington Employers Must Be Careful about Which Employees are Required to Enter into Non-Compete Agreements

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On January 23, 2025, the Washington Supreme Court held employers who pay their employees less than twice the minimum wage cannot prohibit them from working second jobs, subject to a few, limited exceptions. Employers who...more

Fenwick & West LLP

Judge Finds American Airlines Breached its Fiduciary Duty of Loyalty by Allowing Investment Manager to Prioritize ESG Goals with...

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On January 10, 2025, the U.S. District Court for the Northern District of Texas found that American Airlines and its employee benefit committee (EBC) breached their fiduciary duty of loyalty under the Employee Retirement...more

Proskauer - Employee Benefits & Executive...

401(k) Plan Fiduciaries Breached ERISA’s Duty of Loyalty By Allowing ESG Interests To Influence Management Of The Plan

Last week, Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas, issued the first-of-its-kind ruling on the merits pertaining to environmental, social, and corporate governance (“ESG”) investing...more

Miller Canfield

American Airlines Breaches Fiduciary Duty of Loyalty with BlackRock ESG Funds in 401(k) Plans

Miller Canfield on

Whether, and the extent to which, a plan fiduciary can consider nonpecuniary environmental, social and governance (“ESG”) objectives in selecting plan investments has been a hot-button issue for many years, with the view on...more

Ropes & Gray LLP

Practical Takeaways from Spence v. American Airlines, Inc. for ERISA Plan Fiduciaries

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On January 10, 2025, Judge Reed O’Connor of the Northern District of Texas issued a much-anticipated ruling in Spence v. American Airlines, Inc., which marks the first time that a federal judge has written an on-the-merits...more

Mintz

Federal Court Rules ESG-Guided Investing of 401(k) Plan Is a Breach of Fiduciary Duty

Mintz on

Following a bench trial, Judge O'Connor (N.D. Tex.) held that “that Defendants breached their fiduciary duty by failing to loyally act solely in the retirement plan's best financial interests by allowing their corporate...more

Mintz

Massachusetts Supreme Judicial Court Upholds Trustee’s Adjustment from Principal to Income

Mintz on

Trustees have many duties, including the duty of loyalty, the duty to invest prudently, and the duty of impartiality to all beneficiaries. Trustees must also effectuate the wishes of the trust’s settlor. These duties often...more

Orrick, Herrington & Sutcliffe LLP

OLNS#12 – Advisory Boards in German Start-ups

In substantially all of the major world markets, we have dedicated technology lawyers who support young German technology companies on their growth trajectory through all stages. As one of the top tech law firms in the world,...more

Orrick, Herrington & Sutcliffe LLP

OLNS#12 - Beiräte in deutschen Start-ups

Mit unseren auf Technologietransaktionen spezialisierten Teams in allen wichtigen globalen Märkten begleiten wir zahlreiche deutsche Technologieunternehmen auf ihrem Wachstumspfad. Als eine der führenden Tech-Kanzleien...more

Holland & Knight LLP

Supreme Court Urged to Resolve Split on ERISA Standing Requirements in Excessive Fee Cases

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Chavez v. Plan Benefit Services, Inc., 108 F.4th 297 (5th Cir. 2024), began when three employees of a single employer sued the service providers of their health and welfare benefit plan for allegedly charging excessive fees...more

Snell & Wilmer

SEC Division of Examinations Priorities for 2025: Examinations Will Prioritize New Rules for Form PF and Regulation S-P, Fiduciary...

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On October 21, 2024, the Division of Examinations (the “Division”) of the U.S. Securities and Exchange Commission (the “SEC”) issued its annual examination priorities for fiscal year 2025. As with its 2024 examination...more

Thomas Fox - Compliance Evangelist

TD Bank, Part 7-Caremark Claims-Officers

Next, I explore the TD Bank AML/BSA enforcement action by looking at the expansion of the Caremark Doctrine. In the McDonald’s case, the Delaware Court of Chancery took the Caremark Doctrine further by applying the Duty of...more

Mintz - Bankruptcy & Restructuring Viewpoints

Early- and Growth-Stage Companies in Distress: What Directors Need to Know about their Fiduciary Duties

Most high-growth companies find themselves in a race against the clock, trying to use whatever capital they may have to achieve milestones prior to hitting their cash-out date. When markets are tight, as they have been over...more

Holland & Knight LLP

Arkansas Court Declines to Dismiss Challenge to ESOP Releveraging Transaction

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The U.S. District Court for the Western District of Arkansas issued its written decision in Shipp v. Central States Manufacturing, Inc. on July 5, 2024, declining to dismiss the case against Central States Manufacturing Inc....more

Charles E. Rounds, Jr. - Suffolk University...

The trustee has brought a reformation action to reorder the equitable property rights of the trust’s beneficiaries: Spotting the...

Section 415 of the Uniform Trust Code provides that even in the absence of ambiguity the court may reform the terms of a trust to conform the terms to the settlor’s intention if it is proved by clear and convincing evidence...more

Ius Laboris

Can a Hidden Workplace Affair Lead to Dismissal?

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In a recent judgment, France’s Court of Cassation approved the dismissal of a senior executive who had maintained a hidden romantic relationship for more than four years with another employee....more

SEC Compliance Consultants, Inc. (SEC³)

What Advisers Need to Know Now About Giving Rollover Advice after September 23, 2024

This article was originally published on Kitces.com, on May 15, 2024, and is available at at DoL’s Retirement Security Rule & PTE 2020-02 Amendment: What Advisers Need to Know Now about Giving Rollover Advice After September...more

DarrowEverett LLP

Adverse Possession in a Closely Held Company? ‘Stash’ This One Away

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Imagine for a moment that you’re a shareholder in a closely held corporation. In most jurisdictions, that status as a shareholder obligates you to a heightened fiduciary duty to your fellow shareholders. Now imagine that your...more

The Volkov Law Group

Checking In on Caremark Cases in Delaware

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Over the last ten years, we have seen a marked shift from the Delaware Chancery Court chipping away at corporate board member liability claims.  In a number of seminal cases involving Boeing airplane crashes (In re the Boeing...more

Pillsbury Winthrop Shaw Pittman LLP

DOL Expands Investment Advice Subject to Fiduciary Liability

Following previous failed attempts to expand the fiduciary liability of financial services providers, the DOL released a new rule that broadens the definition of “fiduciary” under ERISA. The new rule is expected to face...more

Charles E. Rounds, Jr. - Suffolk University...

Trustee’s Duty To Defend Trust Property From Third-Party Claims Versus Trustee’s Duty To Defend Trust’s Very Existence, As Well...

A longstanding and critical incident of a trustee’s fiduciary duty of loyalty is the duty to vigorously defend the trust’s very existence, as well as all its material provisions (hereinafter “existence defense”), unless it...more

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