A mediator has filed a report in a Texas federal district court stating that Kimberly-Clark Corp. has agreed to settle a proposed class action suit involving alleged mismanagement of its $4 billion employee 401(k) plan. The case is Seidner et al. v. Kimberly-Clark Corp. et al., case number 3:21-cv-00867, in the U.S. District Court for the Northern District of Texas.
Two former company employees filed suit against the company and its benefits administration committee in April 2021, seeking to represent a proposed class of approximately 16,000 current and former plan participants. In their suit, the former employees alleged that plan participants had paid about $78 individually or $1.36 million collectively in annual recordkeeping service fees. However, they claimed that the fees should have been around $30 per person or lower based on the massive size of the company’s plan, which has about $4 billion in assets and more than 16,000 participants as of January 2010.
After the trial court denied Kimberly-Clark’s motion to dismiss, it sought an interlocutory appeal to the U.S. Court of Appeals to the Fifth Circuit. The company argued that the court’s order denying its motion to dismiss involved controlling questions of the Employee Retirement Income Security Act (ERISA) law. More specifically, Kimberly-Clark argued that workers should have to include comparisons using “meaningful benchmarks” in their complaint to survive a motion to dismiss. However, U.S. District Court Judge Sam A. Lindsay disagreed, ruling that an interlocutory appeal would unnecessarily delay the litigation. The judge also found that factual disputes over appropriate benchmarks should not be resolved at the pleading stage.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and H.R./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.
