August 26, 2015 – Boeing agreed on Wednesday to a preliminary deal to settle a long-running lawsuit accusing the company of mishandling its 401(k) plan to the detriment of its employees.
The settlement comes the day a trial was scheduled to begin in the nine-year-old case. Terms weren’t disclosed. The two sides are expected to update the court on details of the talks next month and set a timeline for seeking final approval, according to a court order.
Filed on behalf of 190,000 Boeing employees and retirees, the class-action suit accused Boeing of failing to uphold its fiduciary duties to employees by allowing excessive 401(k) fees to go unchecked, choosing higher-cost retail mutual funds over cheaper options, and improperly making 401(k) plan decisions to benefit vendors receiving other Boeing business.
Boeing, which has defended its 401(k) practices and denied the claims, had no comment Wednesday on the settlement.
The Boeing suit is one of a string of similar class actions targeting major companies over the past decade for alleged violations of the federal Employee Retirement Income Security Act, or ERISA. Very few have gone to trial. In December, Lockheed Martin Corp. reached a $62 million settlement the week its trial was set to begin, the largest payout so far in a suit of this kind.
Boeing’s $44 billion 401(k) plan is the second-largest in the nation after International Business Machines Corp., according to the Labor Department.
Click on the external link below to review the entire article: