Adidas Class Action Says 401(k) Plan Charged $6M In Fees

Adidas America has been hit with a class action lawsuit by retirement plan participants who allege that the company charged $6 million in administrative fees.

Plaintiffs Paul Enos and David Freitas filed the Adidas class action lawsuit on behalf of themselves and other beneficiaries of the 401(k) plan.

The Adidas class action lawsuit states that the participants have suffered financial harm because of the high administrative fees that were charged.

The plaintiffs claim that the fees stripped the participants of the “opportunity to grow their retirement savings by investing in prudent options with reasonable fees, which would have been available in the Plan if Adidas had satisfied its fiduciary obligations.”

The Adidas class action lawsuit states, “for every year between 2013 and 2017…the administrative fees charged to Plan participants for is greater than a minimum of approximately 75 percent of its comparator fees when fees are calculated as cost per participant.”

In addition, the plaintiffs allege that “for every year between 2013 and 2017 but two…the administrative fees charged to Plan participants is greater than 80 percent of its comparator fees when fees are calculated as a percent of total assets.”

The Adidas class action lawsuit states that, from 2013 and 2017, the total difference between Adidas’s fees and the comparison plans based on the total number of participants was $6,242,659.

In addition, the plaintiffs allege that, from 2013 to 2017, the difference between Adidas’s administrative fees and the comparison plans based on asset size was $6,078,234.

The Adidas 401(k) class action alleges that this practice of charging high administrative fees is a breach of the fiduciary duties that are owed to investors of the plan and that fiduciaries should be monitoring their administrative fees against benchmarks and peer-groups.

“The fiduciaries have exclusive control over the menu of investment options to which participants may direct the assets in their accounts [and] [t]hose selections each have their own fees, which are deducted from the returns that participants receive on their investments,” the Adidas class action states.

The Adidas class action lawsuit claims that the funds that Adidas chooses to invest in are “actively managed,” which results in higher administrative fees. The plaintiffs allege that if Adidas had chosen plans which were managed passively, this would decrease the amount of administrative fees charged to participants.

“Adidas’s decision-making, monitoring and soliciting bids from investment funds was deficient in that it resulted in almost no passively-managed funds options for Plan participants, resulting in inappropriately high administrative Plan fees,” the plaintiffs state.

The plaintiffs allege that the defendant’s actions are in violation of the Employee Retirement Income Security Act (ERISA).

The Adidas employees are represented by Beth E. Terrell and Jennifer Rust Murray of Terrell Marshall Law Group PLLC, Greg F. Coleman of Greg Coleman Law and Jordan Lewis of Jordan Lewis PA.

The Adidas 401(k) Class Action is Paul Enos, et al. v. Adidas America Inc., Case No. 3:19-cv-01073, in the U.S. District Court for the District of Oregon.

Read More Lawsuit & Settlement News:

Dodge Ram Class Action Says Gas Nozzles Get Stuck In Trucks

Does Neocate Cause Rickets?

Wag Class Action Says Dog Walking App Isn’t Safe

Do I Need a Lawyer to Participate in the New Jersey Catholic Compensation Fund?