A federal judge in Houston, Texas, has rebuffed a request by Quanta Services to dismiss a lawsuit by two former employees who accused the company 401(k) plan of violating ERISA by offering high-cost, poorly performing investments compared to investments available in the marketplace.
The plaintiffs, who sued in September 2022, criticized the Fidelity Freedom Funds target-date series, the American Beacon Small Cap Value Fund and the DFA International Small Cap Value Fund in seeking class-action status for their complaint. The investment managers aren't defendants in the case of Laliberte et al. vs. Quanta Services Inc. et al.
U.S. District Court Judge Alfred H. Bennett wrote on Sept. 29 that the "allegations regarding the underperformance, high risk and costs of the challenged investments," plus comparative information relating to the target-date series, "permit the court to reasonably infer imprudence by the defendants."
The Quanta Services Inc. 401(k) Savings Plan, Houston, had assets of $1.45 billion as of Dec. 31, 2021, according to the latest Form 5500.