Salesforce Inc. has agreed to pay $1.35 million to settle a pair of lawsuits accusing the company of mismanaging its 401(k) plan by charging high fees for certain investments and retaining some poor-performing investments.
The settlement notice was filed Aug. 23 in a U.S. District Court in San Francisco by attorneys representing two sets of plaintiffs whose lawsuits were consolidated. One group sued in March 2020 and the other sued in February 2024.
The cases are Miguel et al. vs. Salesforce.com Inc. et al. and Simonelli et al. vs. Salesforce.com Inc. et al. The company changed its legal name to Salesforce Inc. in 2022.
The class-action settlement covers participants and beneficiaries from March 11, 2014, to a preliminary approval date by the court. The settlement document said the plan has more than 50,000 participants with account balances.
“Resolving the action at this juncture allows the parties to avoid continued and costly litigation,” the settlement document said.
Plaintiffs in the consolidated lawsuits had argued that plan managers violated ERISA by failing to select lower-cost investments, failing to monitor fiduciaries, keeping certain investments whose performance was weaker than comparative investments and charging “unreasonable” record-keeping fees.
Salesforce 401(k) Plan, San Francisco, had $5.7 billion in assets as of Dec. 31, 2022, according to the latest Form 5500.
