A U.S. District Court judge in Atlanta has cleared the way for a trial in an ERISA lawsuit against The Home Depot Inc. and its fiduciaries by former participants in a company 401(k) plan.
U.S. District Judge William M. Ray II ruled for the plaintiffs by rejecting the company's request for summary judgment of two counts of alleged ERISA violations. The parties will now start the discovery process in which both sides exchange information about the evidence and potential witnesses.
"As genuine issues of material fact remain for resolution, the court finds that defendants' motions for summary judgment … are denied," Mr. Ray wrote Sept. 21 in the case of Pizarro et al. vs. The Home Depot Inc. et al.
Mr. Ray also granted class-action status to the complaint covering the period from April 12, 2012, to the date a judgment is issued.
The two counts — claims of allowing excessive fees for investment advisory services and failing to monitor fiduciaries — were part of six allegations filed by the plaintiffs in April 2018 and a subsequent amended complaint.
Earlier defendants included Alight Financial Advisors and what is now Edelman Financial Engines. The plaintiffs accused them of, among other things, charging high fees and offering poor investment advice. Mr. Ray in September 2019 dismissed charges against these companies.
However, at the same time, the judge let stand a complaint by the plaintiffs that Home Depot fiduciaries breached their duty of prudence because the fiduciaries "mismanaged" investment options by using a "faulty investment process," according to court documents.
He rejected Home Depot's motion to dismiss this complaint, and this allegation will be part of the legal discovery process.
The Home Depot FutureBuilder plan had $9.1 billion in assets as of Dec. 31, according to the latest 11-K statement.