Defense Contractor L3Harris Settles ERISA Class Action

A Florida district court judge has administratively closed an ERISA class action lawsuit against defense contractor L3Harris after the parties settled following mediation, subject to court approval of class counsel’s motion for preliminary settlement approval, to be filed within 60 days.

The case is Robert J. Stengl et al. v. L3Harris Technologies Inc. et al., case number 6:22-cv-00572, U.S. District Court for the Middle District of Florida.

Eight former employees filed the certified class action lawsuit in March 2022, alleging that L3Harris violated ERISA by failing to negotiate lower recordkeeping fees and continuing to offer expensive investment options in the L3 Technologies Master Savings Plan, its 401(k) plan that holds $5.2 billion worth of assets.

L3Harris is an aerospace and defense technology company with over 48,000 employees and about $18 billion in annual revenue. The former employees claimed that despite the significant bargaining power enjoyed by a massive plan, they were charged recordkeeping and administrative fees ranging from $68 to $80, compared to about $20 in fees in other plans of similar sizes. Lower fees were also available for many of the funds, which resulted in plan participants paying more fees than necessary. Nonetheless, L3Harris left the plan’s investment options virtually unchanged since 2015, thus retaining the more expensive options over less expensive ones.

The court denied L3Harris’s motion to dismiss last year and then certified two classes of plan participants in June 2023, totaling about 50,000 plan participants. One class contains plan participants who allegedly paid excessive recordkeeping fees within a specific timeframe, and the other class contains plan participants who invested in allegedly overpriced investment options within a specific timeframe.

A seven-day bench trial in the case was scheduled to begin on February 5, 2024. The judge also had yet to rule on a motion for summary judgment filed by L3Harris in September 2023 and supplemented in November based on the Second Circuit ruling in Cunningham v. Cornell University.

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.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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