Companies in Colgate-Palmolive retirement theft case try to wash hands of liability

Alight Solutions, Bank of New York Mellon and Colgate-Palmolive Co.'s employee relations committee all sought to toss a lawsuit brought against them by a former Colgate-Palmolive employee who had the entire balance of her retirement account stolen.

All three entities filed separate motions to dismiss Paula Disberry's lawsuit on Sept. 15 in U.S. District Court in New York. Ms. Disberry filed a complaint against the companies in July, claiming they violated the Employee Retirement Income Security Act via a breach of fiduciary duty. This came after an individual impersonating her drained more than $750,000 from her account in March 2020 by successfully changing much of her account information, according to the complaint.

Alight, the plan's record keeper, and BNY Mellon, the plan's custodian, both claim they are not plan fiduciaries and therefore cannot be held liable for the theft of Ms. Disberry's retirement fund.

"Plaintiff's allegations regarding Alight's operation of a customer service center and website simply do not implicate any fiduciary or discretionary actions taken by Alight, but rather reflect garden variety ministerial functions," Alight said in its motion to dismiss.

BNY Mellon said it was not involved in managing Ms. Disberry's personal information and had no interactions with the thief, claiming the company's "only role in the events at issue in this lawsuit was the ministerial task of cutting a check," according to its motion.

The individual who stole Ms. Disberry's account balance did so through several steps, according to her complaint, including updating the phone number, email address and address on file. When the thief first contacted Alight to change Ms. Disberry's contact information, Alight sent her a temporary personal identification number in the mail that was obtained by the thief, and the thief successfully continued the theft. The individual successfully accessed the account's funds via a BNY Mellon check that was mailed to Las Vegas and later cashed at a Las Vegas bank, although Ms. Disberry had resided in South Africa since 2008, the lawsuit said.

Colgate-Palmolive's employee relations committee claims it cannot be held liable for the theft, which was a "complex, international fraud."

"The facts alleged, although very unfortunate, do not show a breach of fiduciary duty by the committee," the committee said in its motion. "Rather, they show a complex, international fraud that occurred through no fault of the committee."

The employee relations committee also claims the plaintiff did not follow through on the administrative process for filing claims for benefits. Ms. Disberry submitted a claim for her plan benefits in October but was denied, according to her lawsuit. The committee claims she can still appeal that decision.

Alight said in a statement: "This motion demonstrates why Alight should not be a defendant in this case. This incident resulted from physical theft and mail tampering by an unknown perpetrator and is not due to any compromise in Alight systems, operations, or procedures.

We are committed to protecting against fraud and have industry-leading security measures in place, which we constantly evaluate, update and roll out to our clients."

BNY Mellon and Colgate-Palmolive officials did not immediately respond to requests for comment.