Benefits Regulator's ESOP Shift Heralds New Grants, Fewer Probes

Litigation attorney Chelsea McCarthy was cited in a Bloomberg Law article about the U.S. Department of Labor's (DOL) shifting approach to employee stock ownership plans (ESOPs), including a greater emphasis on grants and outreach and possible pullback in enforcement activity. The article explained that the agency's evolving posture, combined with anticipated valuation guidance and new funding under the Worker Ownership, Readiness and Knowledge (WORK) Act, could influence how ESOP transactions are supported and scrutinized in the years ahead. Ms. McCarthy predicted that even if the government brings fewer cases, that may not translate into less litigation overall.

"It's possible the short-term impact will be that we see the private plaintiffs filling in the space where the department may have otherwise brought a suit," she said. "I don't know that the immediate impact will be fewer suits filed, it may just be more suits filed by private plaintiffs than the department."

READ: Benefits Regulator's ESOP Shift Heralds New Grants, Fewer Probes (Subscription required)