Posted September 22nd, 2020.
By Max Kutner
Law360 (September 22, 2020, 6:32 PM EDT) — The Home Depot Inc. must face a $140 million class action brought in Georgia federal court on behalf of hundreds of thousands of current and former employees who claim the company enlisted 401(k) adviser firms that charged exorbitant fees and botched their investments.
On Monday, U.S. District Judge William M. Ray II agreed to certify three classes that the workers estimate cover more than 300,000 people in all.
“Plaintiffs’ claims are straightforward excessive fee claims, the very sort that are routinely certified,” Monday’s order said.
The enormous class size means there are enough workers to justify class treatment, and those workers have enough in common to move ahead as a group, Judge Ray concluded.
The class members’ claims stretch back to April 2012. One class covers workers who said they received poor investment options, and the other two are for workers who claimed they were charged excessive fees by the firms Financial Engines Advisors LLC and Alight Financial Advisors LLC, respectively.
Even though the workers’ investment portfolios differed, they still claimed common enough allegations, according to Monday’s decision.
The workers sued Home Depot, its 401(k) administrative and investment committees and the two investment adviser firms in April 2018. The judge dismissed the claims against the adviser firms in September 2019 but kept the Employee Retirement Income Security Act allegations against the Home Depot defendants.
In March 2020, the workers pushed back against Home Depot’s argument that their individual grievances meant class certification wasn’t appropriate.
Monday’s ruling sided with the workers, saying that their claims about allegedly excessive fees “do not involve any individual participant’s assessment of the value of those services,” but instead that Home Depot breached its fiduciary duty by allowing the adviser firms “to charge objectively excessive fees for these services.”
The judge continued, “The role of an ERISA fiduciary is to act for the exclusive benefit of the plan participants and to monitor carefully all fees charged to ensure that they are reasonable, regardless of what the participants — as laypeople — might believe.”
Charles Field of Sanford Heisler Sharp LLP, lead counsel for the workers, said in an emailed statement, “This is a vital case for Home Depot employees whose misplaced trust in Home Depot to carefully manage their retirement savings has caused employees substantial harm. We intend to hold Home Depot accountable under the fiduciary standards that the law demands.”
A Home Depot spokesperson declined to comment. Counsel for the Home Depot defendants was not immediately available to comment.
The workers are represented by Andrew Melzer, Charles Henry Field, David H. Tracey, Edward Dewey Chapin, Kevin Hunter Sharp, Leigh Anne St. Charles, Paul Blankenstein and David Sanford of Sanford Heisler Sharp LLP, Aparajit Bhowmik, Jeffrey Herman, Molly DeSario, Nicholas De Blouw and Norman Bernard Blumenthal of Blumenthal Nordrehaug Bhowmik De Blouw LLP and T. Brandon Welch of Stillman Welch LLC.
The Home Depot defendants are represented by Benjamin Bruce Watson, Danielle Chattin, Darren A. Shuler and David Tetrick Jr. of King & Spalding LLP.
The case is Pizarro et al. v. The Home Depot Inc. et al., case number 1:18-cv-01566, in the U.S. District Court for the Northern District of Georgia.
–Additional reporting by Danielle Nichole Smith and Emily Brill. Editing by Jack Karp.