Kimberly-Clark Corp. will pay $2.25 million to settle a class-action lawsuit by former employees who accused the company and its 401(k) fiduciaries of charging high record-keeping fees and failing to monitor record keepers.
The settlement document, which requires court approval, was filed Dec. 2 in a U.S. District Court in Dallas by attorneys representing the plaintiffs in Seidner at al. vs. Kimberly-Clark Corp. et al. The agreement was achieved through mediation.
The plaintiffs sued in April 2021 — later amending their complaint — alleging that the 401(k) plan’s record-keeping fees were excessive compared with similar 401(k) plans in violation of ERISA.
Kimberly-Clark’s motion to dismiss was rejected in March 2023 by U.S. District Court Judge Sam A. Lindsay, Dallas.
The settlement document said the 401(k) plan had about 25,000 current and/or former participants during the period from April 15, 2015, through the date of judgment who could be covered by the agreement,
“Defendants take no position on this motion and do not intend to object,” the document said.
“The prosecution of this class action and the risks that plaintiffs face in establishing liability and damages as well as maintaining a class through trial overwhelmingly support preliminary approval” of the settlement, the document said.
Absent a settlement, the document added, a trial would be complex. “Even if plaintiffs prevailed, it could be years before any recovery would be received in light of the possibility of appeals,” the document said.
Kimberly-Clark Corp. 401(k) & Profit Sharing Plan, Neenah, Wis., had $4.6 billion in assets as of Dec. 31, 2023, according to the latest Form 5500.
