Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.
In response to AutoZone’s attempt to block a lawsuit that alleges the company mismanaged its employees’ retirement savings, workers are now arguing that the 401(k) class action should be kept alive.
The AutoZone workers made their case in a Tennessee federal court, saying that the auto parts retailer’s attack on their allegations did not correctly address the facts central to their argument.
The workers claimed that AutoZone should not have recommended Prudential Insurance Company’s GoalMaker investment allocation service because it was not in their best financial interests.
The employees say that this recommendation represented a violation of the Employee Retirement Income Securities Act, which requires retirement plan administrators to fulfill a fiduciary duty to participants, acting only in their best interests.
The AutoZone class action was filed by Faith Miller and Michael J. Iannone Jr., participants in the AutoZone plan that they say includes around 15,000 employees and is worth around $545 million. Allegedly, the GoalMaker service harmed these workers, losing them $60 million, charging high costs, and sending kickbacks to Prudential Insurance.
In fighting the class action lawsuit, AutoZone argued that the workers could not file claims over their use of the service because it was free. However, in arguing against the dismissal, the employees said that AutoZone had missed the point of their argument.
The plaintiffs note that they were claiming “not that GoalMaker is expensive, but that it was an imprudent service for AutoZone to retain because the investment options that AutoZone approved for use by GoalMaker, the ‘GoalMaker funds,’ gouged participants.”
The workers argued that the average GoalMaker fund cost 1,000 times as much as other low-cost funds, elaborating further to support their case that GoalMaker caused workers financial injury.
AutoZone took issue with the benchmarks that the workers used for judging the success or cost of GoalMaker. However, the workers argue that these benchmarks are indeed appropriate, illustrating the excessive management fees of GoalMaker, as well as costs of GoalMaker and other funds.
According to the workers, AutoZone tries to “cloud the issue” of GoalMaker’s negative effect on workers “by mischaracterizing the facts and citing cases out of context.”
The employees also criticize AutoZone’s effort to point to other class action lawsuits to illustrate the the workers’ benchmarks are inappropriate, noting that the cases cited are different than the ones at play in the AutoZone ERISA class action lawsuit.
In arguing that the AutoZone class action lawsuit should be preserved, the employees say that their employer wrongly tries to convince the court to analyze the performance of plans “by pointing the Court to financial information about the investments from other retirement plans that are not referenced or included in the pleadings.”
The workers note a decision in another class action lawsuit that the court “may not rely on the parties’ opine about what the proper inferences should be drawn from them.”
In their defense of the AutoZone ERISA class action lawsuit, the employees also challenge AutoZone’s assertion that their investment menu was reasonable according the law.
According to the workers, this argument “does not hold water” because there is no such thing as an investment menu that is or is not prudent as a matter of law, under either ERISA or the laws of trusts.
The workers go on to stress that their complaint does not question the merits of AutoZone’s investment menu in the abstract, but rather makes a concrete analysis of the fees and results of AutoZone’s plan in comparison to those of other plans.
In sum, the workers highlight that in their complaint, they had argued that the GoalMaker funds came with substantial fees that the workers claim AutoZone should have known were unjustifiable, particularly because they did not offer an exception of higher returns than other, lower cost options.
Do you have a retirement savings plan through your employer? Do you think the plan is effective? Tell us about your experience in the comments below.
The AutoZone employees are represented by James H. White IV of James White Firm LLC, Lange Clark of Law Office of Lange Clark PC and DG Pantazis Jr. of Wiggins Childs Pantazis Fisher & Goldfarb LLC.
The AutoZone ERISA Mismanagement Class Action Lawsuit is Miller, et al. v. AutoZone Inc., Case No. 2:19-cv-02779, in the U.S. District Court for the Western District of Tennessee.
ATTORNEY ADVERTISING
Top Class Actions is a Proud Member of the American Bar Association
LEGAL INFORMATION IS NOT LEGAL ADVICE
Top Class Actions Legal Statement
©2008 – 2024 Top Class Actions® LLC
Various Trademarks held by their respective owners
This website is not intended for viewing or usage by European Union citizens.
One thought on AutoZone 401(k) Class Action Should Survive, Workers Say
ADD me please