Case Type: ERISA
Company Name: Home Depot
Sanford Heisler Sharp, LLP filed a summary judgment motion asking the Court to rule that Home Depot breached its fiduciary duty of prudence under ERISA due to its mismanagement of the company’s 401k Plan.
“It is not a common practice for plaintiffs to file a motion for summary judgment,” said Charles Field, Partner and Chair of the of the Firm’s Financial Services Litigation Group. “However, the evidence of mismanagement is so compelling here that it warranted the Firm moving forward with its motion and presenting the evidence to the Court.”
In its motion, Sanford Heisler Sharp claims that the facts show that the Plan’s fiduciaries disregarded, and unquestionably breached, their fiduciary duty by: (1) allowing the Plan’s record keeper, Aon Hewitt, to retain millions of dollars in revenue-sharing fees, (2) allowing participants to pay millions of dollars in fees to Financial Engines Advisors and Alight Financial Advisors without even minimal inquiry into the reasonableness of their respective fees, and (3) failing to adequately monitor the BlackRock LifePath Target Date Funds and replace them despite sustained underperformance that put them at or near the bottom of their peer groups.
Sanford Heisler Sharp filed the case in the U.S. District Court of the Northern District of Georgia in April 2018, on behalf of more than 200,000 Plan participants alleging that Home Depot breached its duty under ERISA by failing to monitor several of the investment funds in the Plan and failing to undertake a reasonable inquiry to determine whether the fees being charged for investment advisory services were reasonable.
Were you a Home Depot employee who invested in the company’s 401(k) plan?
As part of the on-going litigation, the Court denied Home Depot’s motion to dismiss in September 2019 and denied Home Depot’s motions for summary judgment in September 2020. The Court certified the class in September 2020.
The team from Sanford Heisler Sharp representing Plan participants includes Field, Kevin Sharp, Nashville Managing Partner and Co-Chair of the Firm’s Public Interest Group, David Tracey, Partner and Co-Chair of the Firm’s Public Interest Group, Senior Litigation Counsel Leigh Anne St. Charles and associate Sean Ouellette, as well as Andrew Melzer, partner in the Firm’s New York office.
“The evidence in this case establishes that Defendants breached their fiduciary duties to the Home Depot 401k Plan and its participants, plain and simple,” said Tracey. “By paying scant attention to funds that suffered extremely poor performance over multiple time periods, the fiduciaries abdicated their responsibilities to safeguard the Plan’s assets. We are asking the Court to rule as such as a matter of law.”
Sanford Heisler Sharp’s lawyers further claim that Home Depot caused the Plan to pay excessive fees to Financial Engines Advisors, a portion of which it then shared with Aon Hewitt. “Based on the evidence we’ve seen, it appears that Plan fiduciaries just couldn’t be bothered with the important fiduciary duties they owed to a multi-billion retirement plan,” said St. Charles.