A federal court judge in Green Bay, Wis. has dismissed all allegations by a former Nestle USA Inc. employee who accused the company and 401(k) plan fiduciaries of multiple ERISA violations.
U.S. District Judge William C. Griesbach on Jan. 3 rejected most of the allegations "with prejudice," meaning the plaintiff cannot bring them before the district court again. However, he gave the plaintiff 30 days to file an amended complaint regarding two allegations of ERISA violations based on the plan's record keeping in the case of Guyes vs. Nestle USA Inc. et al.
The dismissed allegations "with prejudice" are: breach of the duty of loyalty regarding record-keeping and administration fees; breach of the duties of prudence and loyalty regarding managed account service fees; failure to adequately monitor other fiduciaries regarding managed account service fees; and engaging in prohibited transactions.
Mr. Griesbach followed the recommendation filed in a Nov. 21, 2022 report by U.S. Magistrate Judge Stephen C. Dries.
The original complaint was filed in October 2020. The plaintiff, who is seeking class-action status, submitted the amended complaint on Jan. 3, the same day of Mr. Griesbach's ruling.
The plaintiff accused the plan of charging high record-keeping fees and high managed account fees.
"Defendants failed to regularly monitor the plan's fees paid to record keepers, including but not limited to Voya," said the amended complaint referring to Voya Financial, which isn't a defendant.
"During the class period, defendants failed to effectively solicit quotes and/or competitive bids from other record keepers, including but not limited to Voya, in order to avoid paying unreasonable record-keeping fees," the complaint stated. The lawsuit defines the class period as starting July 13, 2014 and extending through the date of judgment.
Nestle 401(k) Savings Plan, Solon, Ohio, had assets of $7.02 billion as of Dec. 31, 2021, according to the latest Form 5500.