A federal judge denied a motion for summary judgment by Dish Network in a class action lawsuit under the Employee Retirement Income Security Act (ERISA). The case involves allegations that the satellite company breached its fiduciary duty under ERISA by retaining certain target-date funds (TDFs) despite their lackluster performance. The case is Jones et al. v. Dish Network Corp. et al., Case Number 1:22-cv-00167, U.S. District Court for the District of Colorado.
A class of current and former Dish Network workers filed suit in 2022, claiming that the plan kept a suite of TDFs, Fidelity Freedom Funds, in its 401(k) plan. The TDFs underperformed similar funds, leading to alleged millions in retirement savings losses for plan participants and their beneficiaries.
According to the court’s decision, dismissal on summary judgment was improper because disputed issues of fact remain that should proceed to trial. In particular, the judge pointed to the issue of whether Dish properly monitored the TDFs’ performance. Furthermore, the judge concluded that the court lacked sufficient information to determine whether the company met its fiduciary duty of prudence under ERISA in retaining the funds as an investment option. According to the judge, Dish hasn’t provided a substantive fund performance analysis that would allow a decision on the duty of prudence issue.
Furthermore, the judge denied summary judgment on claims derivative of the breach of fiduciary duty under ERISA. These claims allege failure to monitor investment fund performance, co-fiduciary liability, and knowing breach of trust.
The judge granted class certification in August 2024. The class includes a large group of current and former plan participants. Dish reportedly had 17,000 active 401(k) plan participants and about $1.6 billion in assets at the end of 2024.
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.
