ERISA Class Actions Prove to be Quite Costly
Seyfarth Shaw recently released a report analyzing litigation trends in workplace class action lawsuits. Unfortunately, ERISA class action lawsuits proved to be the most expensive type of workplace class action lawsuit in 2017. All workplace class actions combined resulted in $2.72 billion dollars in settlements with ERISA class actions comprising the largest portion at $927.8 million dollars.
ERISA class actions far superseded the second highest type of workplace class action, wage-and-hour settlements, by approximately $400 million. A large portion of the ERISA class action settlement fees can be attributed to the recent uptick in 401(k) class action lawsuits. We have previously discussed the recent increase in 401(k) class action lawsuits, but typically these cases allege excessive investment management fees. Plan sponsors should view these large numbers as a warning to take compliance seriously and continue monitoring litigation trends in ERISA cases.