A New York federal district court judge has given preliminary approval to a mediated $332 million settlement in a dispute between Colgate-Palmolive and retired employees. In her class action lawsuit, retired employee Rebecca McCutcheon claimed that Colgate violated the Employee Retirement Income Security Act (ERISA) by failing to pay lump sums they were owed in retirement benefits.
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.
McCutcheon initially sued Colgate in 2016, alleging that, after a 2005 residual annuity amendment to the pension plan, the company shorted retirees on their defined-benefit retirement benefits who had chosen a lump-sum payout between 1989 and 2005. The parties’ main dispute centered on the proper calculation of the residual annuities for the lump-sum payment.
In 2020, a federal district court judge granted partial summary judgment in favor of the retirees, finding that Colgate’s pension conversion errors undervalued the retirees’ lump-sum payments. In that order, the judge found that the estimated class contained 1,200 individuals, with claims totaling about $300 million. The Second Circuit upheld the judgment on appeal in 2023.
In 2024, the lower court issued a revised final judgment after a dispute over the annuity calculation methods used to comply with the 2020 $300 million judgment. The parties began settlement discussions after the U.S. Court of Appeals for the Second Circuit upheld the 2024 revised final judgment in April. The parties settled in June 2025 after a May mediation.
In his order granting preliminary approval, the federal district court judge found the settlement sufficiently reasonable to proceed to a fairness hearing. The settlement will benefit about 1,200 retirees and their spouses and will also cover costs, attorney’s fees, and litigation expenses.
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