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IBM 401(k) participants may be able to take part in a reported $4.5 million settlement in a class action over claims the company violated federal laws protecting retirement plans.
The class action was filed in 2015 by IBM 401(k) participants who said that the company dropped stocks in violation of the Employee Retirement Income Security Act (ERISA). The case wound its way through the court system, including two stops at the Supreme Court of the United States (SCOTUS), before the parties signaled to the federal judge that they had reached an agreement in February.
Citing the enormous expense of continued litigation, the plaintiffs submitted a request for preliminary approval of the $4.75 million settlement agreement.
“This is plainly a complex litigation,” states the plaintiffs’ proposed settlement document. “Simply litigating the sufficiency of plaintiffs’ allegations has taken more than five years and involved every stratum of the federal courts. Class counsel believes that litigating this case through fact and expert discovery will likely necessitate, at a minimum, hundreds of thousands of pages of document production, as well as the depositions of numerous witnesses.”
The class action lawsuit accused the company of failing to protect IBM 401(k) participants in a disclosure, asset write-down, and eventual sale of a non-profitable unit of IBM.
The lawsuit faced a myriad of legal proceedings subsequent to its filing in 2015. It was dismissed several times by U.S. District Judge William H. Pauley III in New York, reports Pensions&Investments. The 401(k) participants won on appeal, but were knocked back when SCOTUS vacated that ruling.
Again, the participants won at the appeals court, but IBM took the class action back to the Supreme Court. IBM was not successful the second time, however, when SCOTUS refused to hear the case in November.
“Even if plaintiffs prevail, the decision could be appealed for years to come,” notes the motion for preliminary approval of the class action settlement submitted in April. “Both sides will take on enormous expense in the meantime. Thus, it could easily be several more years before class members see any recovery under the most optimistic projection.”
Are you an IBM 401(k) participant? What do you think of the proposed settlement? Tell us in the comment section below.
The IBM 401(k) ERISA Class Action Lawsuit is Jander et al. v. The Retirement Plans Committee of IBM et al., Case No. Unknown, in the U.S. District Court for the Southern District of New York.
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2 thoughts onIBM Inks $4.75M Settlement in 401(k) Class Action
Looking for outcome of case.
I worked for IBM from 1979 to 2012. I participated in the 401K program for most of those years. I received correspondence that I qualified in this lawsuit. I checked on it once since then, an appeal was filed by IBM then. What ever happened?