Colgate-Palmolive and its retirees are asking a federal court to approve a $332 million settlement in a class action lawsuit concerning the payout amounts of the former workers’ pensions. The settlement in the Employee Retirement Income Security Act (ERISA) case will bring the almost decade-long suit to a close. The case is McCutcheon et al. v. Colgate-Palmolive Co. et al., Case Number 1:16-cv-04170, U.S. District Court for the Southern District of New York.
The Colgate-Palmolive retirees sued their former employer in 2016, claiming that the company had shorted them on their payouts from their defined-benefit retirement plan. The company amended the pension plan in 2005, which allegedly resulted in an improper calculation of residual annuities for retirees who opted for lump-sum payouts.
The court granted the retirees class certification in 2017, and they won partial summary judgment in 2020. An appeal to the U.S. Court of Appeals for the Second Circuit resulted in a decision affirming the lower court’s order that the company’s calculations had undervalued the lump-sum payments.
The former workers had been unaware of the calculation problems or the 2005 amendment to the plan until 2011, when another ERISA action against Colgate concerning lump-sum miscalculations was pending. The $49.5 million settlement in that case specifically excluded any claims about miscalculations stemming from the 2005 plan amendment.
The $332 million settlement, which resulted from a 13-hour in-person mediation session, will result in monthly annuity payments, plus a one-time lump sum payment, for almost 1,200 retirees and their spouses, as well as payment of litigation costs, attorneys’ fees, and expenses. The class counsel can seek up to 29% of the total settlement amount in fees and up to $2.9 million in expenses. The settlement agreement also provides for a $10,000 service award for the lead class representative, former employee Rebecca McCutcheon.
Before the mediation that led to the settlement, Colgate had again appealed the case to the Second Circuit over a ruling about how it must recalculate benefits for eligible retirees. The Second Circuit rejected their appeal in April.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
Hall Benefits Law, LLC
Latest posts by Hall Benefits Law, LLC (see all)
- Colorado First State to Place Price Cap on Prescription Drug - November 27, 2025
