Gibbons Law Alert

Gibbons Law Alert Blog

Real Estate and Pass-Through Provisions of the New Tax Act

Posted in Transactional Real Estate and Leasing

On December 29, 2017

The new Tax Act was signed into law on December 22, 2017. Holders and developers of commercial real estate will be impacted by certain provisions of the new Tax Act, such as its treatment of real property depreciation deductions, 1031 like-kind exchanges, and pass-through rates. We direct you to our recent Legislative Tax Alert for a more detailed overview of certain relevant provisions of the new Tax Act. If you have questions or concerns about how the new Tax Act will impact you or your business, please contact Russell B. Bershad, a Director in the Gibbons Real Property Department, or Peter J. Ulrich, a Director in the Gibbons Corporate Department.

Key Business Provisions in the Tax Reform Law

by Peter J. Ulrich

Posted in Federal Legislation

On December 29, 2017

On December 22, 2017, President Donald Trump signed into law H.R. 1 (the “Tax Act”), that enacted sweeping changes to the United States tax code. Below are some of the key sections of the Tax Act impacting businesses. These provisions are effective January 1, 2018, unless otherwise noted. Corporate Tax Rate and Alternative Minimum Tax (“AMT”) Currently, corporations are taxed at rates that range up to 35% and are additionally subject to the AMT. Corporations do not benefit from lower long-term capital gain rates. The Tax Act lowers the corporate tax rate to a flat 21% and eliminates the corporate AMT, both effective beginning in 2018 and on a permanent basis. In connection with the corporate rate cut, the Section 199 domestic manufacturing deduction is repealed going forward. The dividends received deduction is reduced from 80% to 65% and 70% to 50%, depending on ownership percentage. Increased Cost Recovery (Bonus Depreciation) Currently, taxpayers can immediately write off 50% of the cost of “qualified property” (generally, tangible personal property with a recovery period of 20 years or less). This ratio drops to 40% in 2018, 30% in 2019, and phases out after that. The Tax Act initially allows full current expensing for property placed in service after September 27, 2017, reducing the percentage that may be...

NLRB Gives Employers Several Reasons to Be Jolly This Holiday Season

by Gibbons P.C.

Posted in Labor

On December 28, 2017

December 2017 has been one for the labor law community to remember. We have seen a wintry flurry of actions by the newly-constituted National Labor Relations Board (NLRB), which has begun a much anticipated releveling of the playing field between Big Labor and Corporate America in the aftermath of profound pro-union actions under the prior administration. On the heels of an instructive and potentially predictive memorandum issued by the Board’s new General Counsel, the NLRB raised questions about the 2014 “quickie” election rule and issued a number of decisions setting forth more neutral standards for analyzing significant legal issues under the National Labor Relations Act (NLRA), including: an administrative law judge’s ability to accept a charged party’s proposed settlement terms; when multiple employers should be deemed “joint employers” under the NLRA; an employer’s ability to take unilateral action consistent with its past practices; the legality of workplace rules that do not expressly prohibit concerted activities protected by the NLRA; and appropriate collective bargaining units. New NLRB General Counsel’s First Memorandum On December 1, 2017, the NLRB’s new General Counsel, Peter B. Robb, issued a memorandum leaving little doubt that he has a very different view of the NLRA than his predecessor on several key issues. In the memorandum, the General Counsel—who is responsible for investigating and prosecuting unfair labor...

What’s a “Pocket Veto” Anyway? – A Guide to the End of New Jersey’s 217th Legislative Session

by Michael D. DeLoreto

Posted in Regulatory Counseling and Departmental Action

On December 22, 2017

At noon on January 9, 2017, the New Jersey Legislature’s 217th session comes to a close. That means any bill not presented to the Governor for his consideration before then will become moot and must be reintroduced in the 218th session. But certain constitutional rules also apply to bills passed by the Legislature and presented to the Governor in the last days of the session. During the two year legislative cycle, the New Jersey Constitution (Art. V, §1, ¶14(b) and (c)) allows the Governor 45 days to either sign the bill or veto it, with the veto being either absolute or conditional. This time frame can be extended if the house of origin (the Senate or General Assembly) is not in session on the 45th day. If the Governor takes no action within the allotted time, the bill becomes law. Any bill presented to the Governor on or after November 25, 2017, cannot receive 45 days of consideration before the end of the session on January 9, 2018. The New Jersey Constitution (Art. V, §1, ¶¶14 (c) and (d)) provides special procedures for this situation: Any bills presented on November 25, 2017, must be signed by noon on January 9, 2018, or vetoed and returned to the Legislature by noon on January 8, 2018, or else the...

Tax Bill Effects the Use of Nondisclosure Provisions in Settlements of Sexual Harassment and Sexual Abuse Claims

by Gibbons P.C.

Posted in Discrimination

On December 22, 2017

While the Tax Cuts and Jobs Act (“the Act”), signed into law today, has received considerable media coverage, a provision included in the Act that affects the ability of employers to deduct settlement payments and attorney’s fees for claims involving sexual assault or sexual harassment has received little attention. Nonetheless, this provision will have a significant impact on how employers resolve claims of sexual harassment and sexual abuse. Specifically, the Act provides that any settlement or payment related to claims of sexual harassment or sexual abuse may not be deducted as a business expense if the payments are subject to a nondisclosure agreement. The Act also provides that any attorney’s fees incurred related to such a settlement with a nondisclosure agreement may not be deducted. The new law applies to “any settlement or payment related claims of sexual harassment or sexual abuse” whether or not a lawsuit has actually been filed. Importantly, these provisions are effective immediately, and thus all payments made after the effective date of the Act in connection with the settlement of a sexual harassment or a sexual assault claim are subject to these new provisions. Read literally, the new law precludes employers from deducting the amounts of such settlements for payments made after the effective date of the Act even if...

The Push for Pay Equity Legislation in New Jersey

by Gibbons P.C.

Posted in Discrimination

On December 12, 2017

Equal pay for equal work is by no means a new concept. Achieving pay equity, defined as eliminating sex (and other) discrimination in the wage-setting system, has been debated for decades. Recently, however, pay equity has become a significant public issue, prompting many state and local governments to enact legislation aimed at eliminating pay disparities, with a strong focus on closing the gender wage gap. To date, attempts to pass pay equity legislation in New Jersey have been unsuccessful. However, with the recent election of Phil Murphy as governor, pay equity legislation in New Jersey appears almost certain. In this recent article published by the New Jersey Law Journal, Suzanne Herrmann Brock, Elizabeth Cowit, and Brittany E. Grierson provide insight into the most recent developments in state and local pay equity laws and discuss legislation on the horizon for New Jersey.

New Jersey Poised to Mandate Across-the-Board Information and Data Security Preparedness

by John T. Wolak

Posted in Privacy and Data Security

On December 7, 2017

The New Jersey Assembly is considering legislation that will require individuals and businesses that own or license personal information about a New Jersey resident to create and maintain a comprehensive information security program (“ISP”). The bill, A-5206, was introduced by Assemblywoman and Deputy Majority Leader Annette Quijano (D-Union) on November 30, 2017, and referred to the Assembly Homeland Security and State Preparedness Committee. If passed, New Jersey would join other states including Massachusetts (see 201 CMR 17.01 to 17.05) and Rhode Island (R.I. Gen. L. § 11-49.3-2), and sector-specific regulatory schemes including the Gramm-Leach-Bliley Act (16 CFR 314), New York Department of Financial Services Cybersecurity Regulation (23 NYCRR 500), and the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Security Rule (45 CFR 164), that require a written information security program. The bill as currently drafted includes a minimum of 28 data security policies and practices that must be included in any company’s ISP. These include: Designating one or more employees to be in charge of the ISP; Ongoing employee training regarding risks to the security, confidentiality, and integrity of any records containing personal information, and imposing disciplinary measures for violation of ISP rules; Obligating a company to conduct due diligence when engaging third-party service providers with access to the company’s records containing personal...

NJEDA Proposes Readoption and Changes to Administrative Rules

by Paul J. St. Onge and Michael D. DeLoreto

Posted in Regulatory Counseling and Departmental Action

On December 5, 2017

Notwithstanding recent headlines about attempts to “kill” off the New Jersey Economic Development Authority (NJEDA), reports of the NJEDA’s death are greatly exaggerated. On November 20, 2017, the NJEDA proposed for readoption with amendments the administrative rules for its assistance programs. This includes changes to the Grow NJ Assistance Program (the “Grow NJ Program”) that implement the recently enacted law creating incentive areas around colleges and universities; modifications to the submission dates for the Economic Redevelopment and Growth Program (the “ERG Program”); and revisions to the Angel Investor Tax Credit Program (the “Angel Investor Program”). Interested parties may submit written comments by January 19, 2018. The NJEDA is an independent State agency that finances small and mid-sized businesses, administers tax incentives to retain and grow jobs, revitalizes communities through redevelopment initiatives and supports entrepreneurial development by providing access to training and mentoring programs. We have previously written about some of the NJEDA’s programs, and the most important proposed changes to the NJEDA’s program rules are listed below. Grow NJ Grow NJ encourages economic development and job creation by offering tax credits to businesses looking to relocate to the State, or that are currently located in New Jersey but are in danger of leaving. The NJEDA’s proposed changes to the Grow NJ program rules would: Implement new incentive...

James R. Zazzali Named Ethics Counsel to Gubernatorial Transition

by Gibbons P.C.

Posted in Elections

On November 15, 2017

Governor-elect Phil Murphy today announced his appointment of James R. Zazzali, Of Counsel at Gibbons P.C. and former Chief Justice of the New Jersey Supreme Court, to serve as ethics counsel to Transition2018. In this role, Mr. Zazzali will ensure transparency in the transitional campaign’s operations and compliance with state ethics laws on the part of all gubernatorial transition staff, committees, and volunteers. Gary Stein, a former Associate Justice on the New Jersey Supreme Court, was also appointed as ethics counsel to Transition2018. “James Zazzali has a lengthy and highly regarded history of civic engagement and dedicated service to the state of New Jersey,” says Patrick C. Dunican Jr., Chairman and Managing Director of Gibbons. “Those of us at the firm are well aware of the exceptional qualifications that Governor-elect Murphy clearly recognized in appointing him to the transition team.” “I am honored that Justices Zazzali and Stein will be ensuring that my transition lives up to the highest standards of ethics and transparency, and will set the tone for my administration,” said Murphy. “They are giants in the law community and are respected statewide. Their leadership and guidance will be invaluable.” Mr. Zazzali joined Gibbons in 2007, after retiring from the bench. He had served on the Supreme Court for over six years, and...

Rule 37’s “Meet and Confer” Requirement Gaining Steam in Discovery Disputes

by Gibbons P.C.

Posted in Patent

On November 14, 2017

Merz N. Am., Inc. v. Cytophyl, Inc. is the latest federal district court decision analyzing the meet and confer requirement of Federal Rule of Civil Procedure 37. As discovery issues continue to dominate the first 12 to 18 months of civil litigation (depending on the jurisdiction), litigators should review recent decisions, at least one of which denied a discovery motion for failure to adequately meet and confer. Under Rule 37(a)(1), a party moving to compel discovery must certify that it “has in good faith conferred or attempted to confer with the person or party failing to make . . . discovery in an effort to obtain it without court action.” Because neither the Rule nor the advisory notes accompanying it specify which methods of conferring are appropriate, individual courts have interpreted Rule 37’s meet and confer requirement through local rules and judicial decisions. For example, the Local Rules for the Eastern District of Texas require, “at a minimum, a personal conference, by telephone or in person, between an attorney for the movant and an attorney for the non-movant.” Further, while some courts have addressed the merits of a motion to compel despite a failure to adequately meet and confer, see, e.g., Buskirk v. Wiles, 2016 U.S. Dist. LEXIS 168081 at *7 (S.D. W. Va. Dec....