Wal-Mart Faces Pension Plan Lawsuit

Los Angeles, CAIn addition to allegations of bribery, Wal-Mart now faces a lawsuit filed by a pension plan, which alleges the company breached its fiduciary duty. The latest retirement plan lawsuit was filed in relation to the Mexico bribery scandal and alleges the giant retailer failed in its duties to the pension plan. The lawsuit was not filed under ERISA plan laws, but is still related to retirement plans.

According to The New York Times (5/3/12), the lawsuit was filed by the California State Teachers' Retirement System, which owns more than 5 million shares in Wal-Mart. The pension plan reportedly named the Wal-Mart board and executives as defendants to allegations of breaching fiduciary duty related to the bribery scandal.

The lawsuit is actually a derivative suit, and asks that damages be returned to the company and further that the company improve corporate governance. But the pension could still be awarded plaintiffs' lawyers' fees. A spokesperson stated that it is important to have a responsible board of directors representing investors' interests.

The lawsuit was filed following a New York Times article alleging officials in Mexico were bribed by workers at the Wal-Mart Mexican subsidiary and, further, that executives at Wal-Mart corporate headquarters shut down an investigation into the alleged bribery.

Although pension plans can and do file lawsuits against companies and firms they have invested with, sometimes ERISA lawsuits are filed by retirement plan participants and beneficiaries. Such lawsuits also often allege breach of fiduciary duty on the part of the people in charge of an ERISA plan, employee benefits plan or employee stock plan.

In California, Western Mixers Inc. agreed to repay more than $1 million to the company's pension plan, following allegations that the company and the plan's trustees both failed to make mandatory employer contributions to the pension plan and made unauthorized withdrawals from the plan. The company has 10 days from the date of judgment to repay the money, with interest. According to Compensation (5/15/12), Western Mixers will also pay a penalty for its actions.