Labor & Employment Developments Blog

Lawsuits by 401(k) plan participants related to employer stock in a 401(k) plan are nothing new. These lawsuits typically allege that ERISA plan fiduciaries failed to protect employees' retirement savings when the employer stock price falls. In the wake of the U.S. Supreme Court's Dudenhoeffer decision, which included the elimination of the presumption of prudence, these suits are often dismissed. However, during oral arguments for the case of IBM et al. v. Jander et al., the Supreme Court is now faced with reconciling the tension between federal securities law and ERISA ...

The Seventh Circuit recently issued a stern warning about the importance of strict compliance with ERISA claim review timeframes in holding that the “substantial compliance” standard “does not apply to blown deadlines.” In this case, Fessenden v. Reliance Standard Life Ins. Co. (7^th Cir. 2019), the disability plan administrator issued a decision on review about eight days after the time prescribed by ERISA. In the short time period after the ERISA deadline expired and before the decision on review was rendered, the claimant filed suit as he was deemed to have ...

On October 22, 2019, the Department of Labor issued proposed rules intended to relax the current (and, in many respects, outdated) electronic disclosure rules. The proposed rules offer additional e-disclosure options and have the potential to save ERISA plans significant time and money. Notably, the proposed rule includes a new, voluntary safe harbor which would allow employers to make retirement plan disclosures via website, subject to certain requirements such as participant notifications and specific website standards. The rule would permit default electronic delivery ...

The United States Supreme Court recently agreed to hear two ERISA class-action cases next term that were decided by the lower courts in favor of plan participants. First, the Supreme Court agreed to review Retirement Plans Committee of IBM et al. v. Larry W. Jander, an employer stock-drop case from the Second Circuit.  IBM workers claimed that IBM’s Retirement Plans Committee breached its fiduciary duty by allowing workers’ retirement funds to be invested in artificially-inflated IBM stock. The Second Circuit applied the “more harm than good” standard that was set forth ...