LinkedIn agreed to pay $6.75 million to settle a lawsuit by current and former participants in a 401(k) plan who alleged ERISA violations by the company and its fiduciaries.
The agreement, which requires court approval, was announced March 3 in a document filed with the U.S. District Court in San Jose, Calif. The parties had reached an agreement in principle in November, but they didn't disclose the terms in the case — In re LinkedIn ERISA Litigation.
Plaintiffs sued in August 2020 — they amended their complaint twice — contending the plan charged excessive fees and offered poorly performing investment options.
The company asked U.S. District Judge Edward J. Davila to dismiss all allegations, but he ruled in November 2021 that the complaint involving a Fidelity Investments target-date series could go to trial. Plaintiffs said the plan should have offered a passively managed Fidelity target-date series instead of an actively managed one. Fidelity isn't a defendant.
"Defendants have denied and continue to deny any wrongdoing or liability and will continue to vigorously defend the lawsuit if the proposed settlement is not approved," the settlement document said.
"The parties have agreed to the settlement after extensive negotiations and with the assistance of a neutral third-party mediator," the document said.
The settlement affects participants, former participants and beneficiaries of the LinkedIn plan between Aug. 14, 2014, and July 1, 2020.
LinkedIn Corp. 401(k) Profit Sharing Plan and Trust, Sunnyvale, Calif., had $1.3 billion in assets as of July 1, 2019, according to its most recent Form 5500.
Microsoft Corp. acquired LinkedIn in December 2016. The LinkedIn 401(k) plan was subsequently transferred to the Microsoft Corp. Savings Plus 401(k) Plan. Neither Microsoft nor its fiduciaries nor its retirement plan is a defendant.
