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Plaintiffs in a Lowe’s 401(k) class action are fighting to keep their lawsuit afloat, arguing that they included adequately facts to support their claims that the home improvement store cost the plan large amounts of money in violation of ERISA.
Following the defendant’s motion to dismiss, Lowe’s 401(k) participants claimed that their arguments were “more than sufficient” to support their allegations that the retailer violated its fiduciary duties and duty of prudence by investing $1 billion of their retirement assets into an allegedly unsuccessful investment fund.
The Lowe’s 401(k) class action was originally filed in April 2018 alleging that the company wrongfully chose to follow Aon Hewitt Investment Consulting Inc.’s conflict of interest recommendation to join the Hewitt Growth Fund, a poorly performing affiliate product.
The Lowe’s 401(k) participants claimed that the home improvement retailer wrongfully relied on Hewitt, “a conflicted advisor,” and made an investment choice which was unwise for the participants.
The participants claim that, by investing in a fund with a poor track record, Lowe’s was not looking out for the interests of the plan participants in violation of the federal Employment Retirement Income Security Act (ERISA).
“The Employee Retirement Income Security Act (‘ERISA’) imposes ‘stringent’ fiduciary duties of loyalty and prudence upon retirement plan fiduciaries. […] These duties are the ‘highest known to the law.’ […] Fiduciaries must act ‘solely in the interest of the participants and beneficiaries,’ […] with an ‘eye single’ to the interests of such participants and beneficiaries,” the plaintiffs noted.
In Lowe’s June 2018 motion to dismiss, they company claimed that the Hewitt Growth Fund had experienced 12 percent in annual returns, making the plaintiffs claims pointless. However, the Lowe’s 401(k) participants clapped back, saying that the returns on the investment are not relevant, only whether the choice to invest was a good idea.
“Just as negative earnings during a down market do not support a breach of fiduciary duty claim, positive earnings during an up market are not a defense to a breach of fiduciary duty claim,” the Lowe’s 401(k) participants said. “The relevant test is not whether investment returns are positive or negative, but whether the investment was prudently selected and retained in light of other available alternatives.”
Lowe’s also stated that the plan participants failed to argue their loyalty claim because they did not show that Lowe’s received a benefit or kickback from choosing the Hewitt Growth Fund or that it was the retailer’s intention to do so at the time of investing.
Similarly, the company claimed that plaintiffs failed to argue their imprudence claim due to a lack of evidence that choosing the Hewitt Growth Fund was an unwise decision.
Plaintiffs are represented by F. Hill Allen of Tharrington Smith LLP; and Paul J. Lukas, Kai H. Richter, Carl F. Engstrom and Brandon T. McDonough of Nichols Kaster PLLP.
The Lowe’s 401(k) ERISA Class Action Lawsuit is Reetz v. Lowe’s Companies Inc., et al., Case No. 5:18-cv-00075, in the U.S. District Court for the Western District of North Carolina.
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11 thoughts onLowe’s Employees Fight to Keep 401(k) Class Action Lawsuit Alive
How does a 15 year join
please include me
can anyone provide a link or information on becoming a part of this?
how can i join
please include me
We, the employees, need to know how to become a part of this class action. Can anyone provide a link or information on becoming a part of this?
How does a 20 year employee get involved.
Are former employees eligible to join this lawsuit
I would also like to join the lawsuit. Since this new stock plan was implemented, my 401k has stopped increasing while the stock market is leaving me behind.
How can I join the lawsuit against Lowes
… How can I join