A U.S. District Court judge in New York denied a motion to dismiss a class-action lawsuit against Estee Lauder Cos. Inc., its directors and its fiduciaries, alleging ERISA violations in the management of the company's 401(k) plan.
Judge Jesse M. Furman denied the defendants' motion to dismiss in a court filing Monday.
Four former employees filed the lawsuit in June 2020, alleging the defendants "objectively and adequately review the plan's investment portfolio with due care to ensure that each investment option was prudent, in terms of cost," said the original complaint in the case of Billelo et al. vs. Estee Lauder Inc. et al.
In his order Monday, Mr. Furman said the reasons for his denial will be explained at a July 8 pretrial conference.
In the lawsuit, plaintiffs also accused plan executives of maintaining certain funds despite the availability of identical or similar funds with lower fees and/or performance histories and should have considered lower-priced collective investment trusts than mutual funds managed by J.P. Morgan Investment Management Inc., which isn't a defendant.
Plaintiffs also said record-keeping costs were unreasonable and plan executives had also breached their fiduciary duties by not issuing an RFP for those services since at least 2014 to compare costs.
As of Dec. 31, 2019, The Estee Lauder Cos. 401(k) Savings Plan had $2 billion in assets, according to its latest Form 5500 filing.
Officials at Estee Lauder could not be immediately reached for comment.