Since the Supreme Court’s ruling in Fifth Third Bancorp v. Dudenhoeffer, courts around the country have overwhelmingly rejected ERISA fiduciary-breach claims by 401(k) plan participants seeking relief related to investments in company stock funds. The Seventh Circuit recently continued that trend by affirming the dismissal of claims brought by participants in the Boeing 401(k) plan, but did so on grounds that (i) the fiduciary responsibilities associated with the company stock fund had been delegated to an independent fiduciary, and (ii) the insider fiduciaries had no duty to disclose corporate inside information to the plan participants or the independent fiduciary. Burke v. The Boeing Co., No. 20-3389 (7th Cir. Aug. 1, 2022). As discussed below, the Seventh Circuit’s opinion provides helpful guidance to plan sponsors and fiduciaries that go beyond the specific circumstances presented in the case.
Company Stock Fund
Fifth Circuit Affirms Dismissal of ERISA Stock Drop Action
By Joseph Clark on
The Fifth Circuit agreed that a participant in Idearc’s 401(k) plan failed to plausibly plead that the plan fiduciary’s failure to act on publicly available information about Idearc amounted to a breach of fiduciary duty in connection with making Idearc stock available as an investment option in the plan. The decision was guided by an…