A Fraudulent Employee Pension Claim
Last year, a U.S. appeals court ruled that a U.S. company was guilty of fiduciary behavior when it failed to ensure its employees were properly informed about certain investment choices and did not make those choices based on the financial health of each employee. This ruling is now being enforced in the United States through what is called an Employee Retirement Income Security Act (ERISA). According to the details contained in the Eleventh Circuit’s opinion, in recent years the U.S. Fidelity 401k Plan contained almost half a trillion dollars in assets that, if invested properly, would have provided substantial benefits to employees and their employers. The Eleventh Circuit found that this wealth was obtained without the employee members ever having an actual loss or liability because the company did not make any investments in their accounts that they would have incurred losses from. As a result, the company was found to be in violation of ERISA.
As implied by the Eleventh Circuit’s opinion, if a company fails to make any investments that it would have lost while failing to make these investments, then it has violated the fiduciary duty under the law. The Eleventh Circuit found that it was likely that the company’s directors did not take into account all of the relevant facts when making the original decision to invest in the 401ks and therefore indirectly injured their individual employees with undisclosed fees and losses during the period that they held company elective seats on the board of directors of the company. These employees then brought their own 401k lawsuit against the company.
While the underlying basis for both the U.S. Fidelity and the ERISA claims are largely the same, the way in which the lawsuits are litigated and the way in which the companies that lose in the class action lawsuit investigation will be punished are not. In general, there are two class action lawsuit settlement remedies available to employees who have been injured by an employer’s failure to make required investments. One remedy is a money laundering class action lawsuit settlement, which claims that the company intentionally or negligently failed to make required investments and allow the employee to gain access to funds that would have otherwise been invested in another company-sponsored entity. Another class action lawsuit remedy, which is also common in these circumstances, is an appeal of the company’s fiduciary negligence.
An employee can bring a fiduciary claim against a company in either an individual action or a class action. In an individual action, the person bringing the suit generally consents to the company’s fiduciary duties. If the company satisfies its obligations, then the employee is entitled to recover damages from the company, its officers and employees, for alleged violations of his or her fiduciary duty. On the other hand, if the company violates its fiduciary duties and does not comply with ERISA, then the employee may not recover from the corporation or its officers. In either case, if the employee is able to prove that he or she was a victim of employer liability, then he or she may proceed with the appeal.
In a class action, all of the named complainants come together and proceed against the corporation as a whole. The employees who bring the suit then certify that they are all victims of employer violations of their fiduciary duty. The case proceeds until the plaintiff receives either the monies she is owed or a reasonable settlement in settlement of her lawsuit. If the employee is unable to receive any of these settlements, she may choose to bring a claim against the company as a whole. This is referred to as an individually consolidated lawsuit.
Fidelity in pensions and retirement plans have become a very controversial issue in recent years due to employee litigation. It is important for employers to thoroughly review their agreements to ensure that they do not violate any legal or fiduciary obligations. When this occurs, an employee has several legal remedies available to her. If an employer does not follow a proper procedure in paying out a pension or retirement plan award or fails to properly file a related insurance claim, then the aggrieved employee has the right to sue for damages.