Request Legal Help Now - Free

Advertisement
LAWSUITS NEWS & LEGAL INFORMATION

Employee Stock Option Legal News Articles & Interviews

View Lawyer Interviews only

Dignity Health ERISA Lawsuit Inches Toward $100 Million Settlement

Dignity Health ERISA Lawsuit Inches Toward $100 Million Settlement December 10, 2019. By Anne Wallace.
Oakland, CA The Dignity Health ERISA lawsuit has been exhaustively litigated since 2013, but now appears close to settlement. The proposed settlement in Rollins v. Dignity Health, which still requires final approval by the Northern District of California, would require Dignity Health to add $50 million in retirement plan funding in 2020 and at least $50 million in 2021. In addition, Dignity Health must not reduce participants’ accrued benefits because of a plan merger or amendment for 10 years. Dignity Health has also promised to fund the plan until 2024, making the minimum contribution recommended by actuaries to the plan.
Read [ Dignity Health ERISA Lawsuit Inches Toward $100 Million Settlement ]

Goldman Sachs 401k Plan Participants file ERISA Lawsuit over Self-Dealing

Goldman Sachs 401k Plan Participants file ERISA Lawsuit over Self-Dealing November 21, 2019. By Anne Wallace.
New York, NY A class action ERISA lawsuit filed on October 25 in the Southern District of New York claims that Goldman Sachs Inc. and related defendants failed to administer the Goldman Sachs Group Inc. 401k plan prudently and in the best interest of participants. Instead, Falberg v. Goldman Sachs Group Inc. alleges that Goldman managed the plan to benefit the company at the expense of participants. Plan fiduciaries did this by keeping many underperforming proprietary mutual funds in the investment lineup.
Read [ Goldman Sachs 401k Plan Participants file ERISA Lawsuit over Self-Dealing ]

Intel Corp. Investment Policy Committee v. Sulyma to shape ERISA fiduciary lawsuits

Intel Corp. Investment Policy Committee v. Sulyma to shape ERISA fiduciary lawsuits November 7, 2019. By Anne Wallace.
Washington, DCOn December 4, the US Supreme Court will hear arguments in an ERISA lawsuit that may have lasting implications for the ability of plan participants to sue over mismanagement of retirement funds. As Christopher Sulyma argues in his Supreme Court brief, ERISA plan participants should not be assumed to know about (and perhaps have consented to) suspect  financial decisions disclosed in a “Russian nesting doll” style series of linked online documents.

Read [ Intel Corp. Investment Policy Committee v. Sulyma to shape ERISA fiduciary lawsuits ]

Did the Ninth Circuit Gut ERISA Enforcement in Schwab 401k Mismanagement Lawsuit?

Did the Ninth Circuit Gut ERISA Enforcement in Schwab 401k Mismanagement Lawsuit? October 21, 2019. By Anne Wallace.

San Francisco, CA In August, the Ninth Circuit ruled that Charles Schwab Corp. could force plan participants to individually arbitrate their claims that fiduciaries of the Schwab Retirement Savings and Investment Plan (Plan) had mismanaged plan assets. The ERISA lawsuit decision sent shock waves through the Ninth Circuit as it appears to reverse nearly 35 years of judicial precedent about forced arbitration of ERISA claims.


A petition for rehearing in Dorman v. Charles Schwab Corp. is now pending. The AARP has filed an amicus brief on behalf of the plan participants that tackles the larger question of whether enforcement of a law that protects the financial security of American workers should be a public right or a purely private endeavor.

Years of background




Michael Dorman sued Charles Schwab Corp., the sponsor of the Plan, in 2017. He claimed that Schwab breached its fiduciary duties under ERISA by adding poorly performing in-house investment funds to its investment options, thus enriching itself at the expense of employees trying to save for retirement. The Plan included a clause that required disputes to be settled by binding arbitration. Participants were also required to waive any rights to enter a class or collective action. Arbitration was to be conducted on an individual basis only.


The District Court for the Northern District of California denied Schwab's motion to compel individual arbitration, relying on a series of judicial precedents that dates back to 1984. Chief among these was Amaro v. Continental Can Co..


The Ninth Circuit reversed the District Court decision, opining that the older precedents had been overruled by the 2013 Supreme Court decision in American Express Co. v. Italian Colors Restaurant. The American Express decision is often understood to stand for the principle that plaintiffs may not invalidate an arbitration agreement containing a class action waiver merely because arbitrating their claims on an individual basis would cost many times more than their potential recovery.

Why arbitration hurts ERISA plan participants




The argument often advanced to support arbitration is that it is quicker and less expensive than a lawsuit. That is especially true for the big employer defendant.


Arbitration rarely produces the kind of multimillion dollar settlement that may result from class action litigation, like the class action 401k lawsuits against financial services firms, like Schwab, that have become common in recent years.


Arbitration proceedings are private; they create no legal precedent; and participants are often bound by non-disclosure agreements. Even apart from the issues of cost and diminished potential for recovery, arbitration provides no basis for the sharing of information or other resources on the part of those who are affected by similar facts. It is very difficult to build an argument about a common situation or how the law should apply in that circumstance.

How should ERISA work for the people who work?




The AARP amicus brief goes beyond these practical concerns to examine the structure of ERISA enforcement processes. It gets into a little bit of theory about how law should work to protect the people who work. In other words – who is minding the retirement savings store?


AARP’s brief notes that Section 502(a)(2) of ERISA provides that the Secretary of Labor, participants, beneficiaries and fiduciaries may all bring civil actions for relief under the law. They are partners. Plan participants are a vital part of this enforcement scheme because they are best positioned to know what is happening with their retirement savings. They also have the most motivation.


The relief plan participants may ask for under ERISA includes the right to recover all losses incurred by the plan, not just what they have individually lost. It also includes the right to ask for the removal of a fiduciary. This is a reversal of the power dynamic, as most plan participants understand it.


This original foundational scheme would be frustrated, the brief argues, if mandatory arbitration clauses in ERISA plans were to be enforced. Two problems would follow:


Private arbitrators are not empowered to award damages beyond the claims of the individual who arbitrates. Nor may they grant injunctive relief, including the removal of a fiduciary. Only the judiciary may do this. That is why, as argued by the AARP, Congress carefully referred to “the court,” in its description of ERISA enforcement mechanisms.


In addition, under the Ninth Circuit’s decision in Dorman, plan sponsors could deprive participants of the right to have disputes resolved through judicial proceedings simply by adopting plan amendments that required arbitration of disputes. That will happen in very short order, if it has not already. The decision allows plan sponsors to override the intention of Congress in drafting the law and to render the enforcement provisions of ERISA virtually toothless.


The impact of Dorman is still being assessed by plan sponsors and the ERISA bar. All eyes are certainly trained on the case, as the Ninth Circuit has a reputation for being in the forefront of employee benefit and employee rights law.
Read [ Did the Ninth Circuit Gut ERISA Enforcement in Schwab 401k Mismanagement Lawsuit? ]

Safeway 401k Plan to Settle ERISA lawsuit for $8.5 Million

Safeway 401k Plan to Settle ERISA lawsuit for $8.5 Million October 9, 2019. By Anne Wallace.
San Francisco, CA Safeway and Aon Hewitt Investment Consulting Inc. have agreed to pay $8.5 million to settle a proposed class action ERISA lawsuit brought by participants in the Safeway 401k Plan. The workers claim that Safeway and Aon breached their fiduciary obligations by offering high cost investment options that benefitted the investment manager at the expense of participants.
Read [ Safeway 401k Plan to Settle ERISA lawsuit for $8.5 Million ]

Fiduciaries’ Desperate Drive to Fund Benefits Backfires

Fiduciaries’ Desperate Drive to Fund Benefits Backfires September 11, 2019. By Anne Wallace.
Santa Ana, CA Aaron Kushner and Eric Spitz, who mismanaged the investments of the Retirement Plan of Freedom Communications, Inc. (the Pension Plan) have offered to settle an ERISA lawsuit brought by the federal Pension Benefits Guaranty Corporation (PBGC) for $7.8 million.
Read [ Fiduciaries’ Desperate Drive to Fund Benefits Backfires ]

ERISA Lawsuit Charges Plan with Mismanaging Both High and Low Yield Investment Choices

ERISA Lawsuit Charges Plan with Mismanaging Both High and Low Yield Investment Choices August 23, 2019. By Anne Wallace.
Birmingham, AL In an ERISA lawsuit filed in the Northern District of Alabama, participants in the Compass SmartInvestor 401(k) Plan claim that Plan fiduciaries failed in their legal duty to act prudently for the benefit of plan participants and beneficiaries. The Plan offered only one poorly performing short-term bond investment option and failed to monitor the investment performance of higher cost funds, ostensibly selected to produce higher yields.
Read [ ERISA Lawsuit Charges Plan with Mismanaging Both High and Low Yield Investment Choices ]

Fidelity 401k Fiduciary Lawsuits Consolidated in Massachusetts

Fidelity 401k Fiduciary Lawsuits Consolidated in Massachusetts August 7, 2019. By Anne Wallace.
Boston, MA Since the beginning of 2019, a collection of class action ERISA lawsuits has worked to expose a secret pay-to-play scheme that arguably benefited Fidelity Management and Research Company and related companies (“Fidelity”) at the expense of 401k retirement savers.
Read [ Fidelity 401k Fiduciary Lawsuits Consolidated in Massachusetts ]

Dignity Health Poised to Settle ERISA Lawsuit for $100 Million

Dignity Health Poised to Settle ERISA Lawsuit for $100 Million July 30, 2019. By Anne Wallace.
San Francisco, CA Dignity Health has agreed to pay $100 million to settle a proposed class action ERISA lawsuit that accused it of using a undeserved religious exemption to justify underfunding its pension plan by $1.5 billion. The proposed settlement would require Dignity Health to add $50 million in retirement plan funding in 2020 and at least $50 million in 2021. In addition, the settlement requires Dignity Health to refrain from reducing participants’ accrued benefits because of a plan merger or amendment for 10 years. Dignity Health has also promised to fund the plan until 2024, making the minimum contribution recommended by actuaries to the plan.
Read [ Dignity Health Poised to Settle ERISA Lawsuit for $100 Million ]

Forced Arbitration, Stock Drop Disputes and ACA Repeal Loom Large for ERISA Lawsuits in Latter Half of 2019

Forced Arbitration, Stock Drop Disputes and ACA Repeal Loom Large for ERISA Lawsuits in Latter Half of 2019 July 12, 2019. By Anne Wallace.
Washington, DC It’s semiannual prognostication time for ERISA lawsuits, and in our crystal ball, we see a mysterious stranger, great fortune and heartbreak. No, actually, not. But relying on our lesser powers, we suspect that, for the next six months, three issues will loom large.
Read [ Forced Arbitration, Stock Drop Disputes and ACA Repeal Loom Large for ERISA Lawsuits in Latter Half of 2019 ]

Page: 1  2  3     Next»

Request Legal Help Now! - Free