Whole Foods class action alleges company mismanaged retirement plan

Whole Foods retirement plan class action overview: 

• Who: Whole Foods, its employer board and other leadership are facing a class action lawsuit from a group of employees. 
• Why: Whole Foods is accused of not properly managing the company’s 401(k) plan to maintain a competitive record-keeping fee, according to the lawsuit.
• Where: The Whole Foods retirement plan class action was filed in federal court in Texas.

Whole Foods Market Inc., its leadership and its employer board are facing a class action lawsuit claiming they did not properly manage the company’s retirement plan to keep fees at a competitive level.

Companies are required to responsibly manage funds in those retirement funds by the Employee Retirement Income Security Act of 1974 (ERISA).

Whole Foods’ record-keeping costs for participants over the plan period were $34 starting in 2016 before dropping to $33 in 2018 and $31 in 2020. The $34 rate is nearly double what is considered a reasonable cost, the Whole Foods retirement plan class action claims.

“Had the defendants sought an appropriate market rate through an RFP, it’s likely either the recordkeeper would have been changed at some point or Fidelity would have agreed to its own admitted rate of $14-$21 per participant or less (discussed below) throughout the Class Period,” the Whole Foods class action says. 

Whole Foods had more than $1B in employee assets in retirement plan during class period

The proposed class action covers those who used the retirement plan between Nov. 6, 2017, and the date of judgment. Participants Shauna Winkelman, Michael Lenon, Scott Cenna, Kalea Nixon, Robert Goldorazena, Chad Diehl and Ross Nanfeldt are the named plaintiffs.

Rather than paying a larger-than-normal fee per participant, Whole Food should have been able to negotiate a lower rate due to how large the plan was, having at least $1 billion in assets throughout the proposed class period and holding $1.9 billion at the end of fiscal 2021 and $1.6 billion at the end of fiscal 2020.

Braga Fresh issued a recall in July of on one batch of 365 by Whole Foods Market Organic Asian Inspired Chopped Salad Kit as the product contains undeclared milk and egg.

Do you have a 401(k) or retirement plan that you believe was poorly managed? Let us know in the comments.

The plaintiffs are represented by Kell A. Simon of the Law Offices of Kell A. Simon along with Donald R. Reavey and Mark K. Gyandoh of Capozzi Adler P.C.

The Whole Foods retirement plan class action lawsuit is Winkelman, et al. v. Whole Foods Market Inc., et al., Case No. 1:23-cv-01352, in the U.S. District Court for the Western District of Texas, Austin Division.

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