401(k) plans. Credit: Shutterstock.com
Two law firms on Tuesday filed an Employee Retirement Income Security Act (ERISA) class-action complaint against a third law firm, Kansas City, Missouri–based Husch Blackwell LLP, alleging self-dealing and other breaches of fiduciary duty.
According to the lawsuit filed in the U.S. District Court for the Western District of Missouri by Sanford Heisler Sharp McKnight and Fell Law, Husch Blackwell and members of its executive board (referred to collectively as the “Husch Blackwell Defendants”) routinely withheld funds from employee paychecks for the purpose of contributing those funds to employees’ accounts in the Husch Blackwell 401(k) Trust Fund (referred to in the lawsuit as “the plan”). However, the complaint continues, the Husch Blackwell Defendants did not send all employee contributions to the plan in a timely manner as required by ERISA. Instead, it notes, the Husch Blackwell Defendants kept the funds in the firm’s general operating account for months at a time and used them to pay the firm’s operating expenses.
The complaint also claims that the Husch Blackwell Defendants’ actions created a sizable pool of assets inaccessible to the plan, its participants, and its beneficiaries—depriving them of opportunities to seek an investment return on their retirement funds.
Through these actions, the complaint alleges, the Husch Blackwell Defendants violated ERISA’s anti-inurement provision, breached ERISA’s fiduciary duties of prudence and loyalty, and engaged in “prohibited transactions” barred by ERISA.
The plaintiff, Tyler M. Paetkau, filed suit on behalf of the plan and approximately 400 participants, according to Sanford Heisler.
“ERISA’s fiduciary duties are the highest known in the law,” Charles Field, Sanford Heisler’s co-vice chair and counsel for the plaintiff and the proposed class, said in a statement. “Employees should be able to trust that when their employer withholds retirement plan contributions from their paycheck, those funds will go directly to their retirement savings, not into the employer’s pocket. To divert employees’ retirement plan contributions to pay for operating expenses is a total betrayal of that trust.”
The lawsuit against Husch Blackwell LLP comes on the heels of several significant ERISA class settlements in 2024 and 2025, Sanford Heisler noted. In June, the firm obtained a record $69 million settlement in its multiyear class-action against UnitedHealth Group. Earlier in 2024, Sanford Heisler Sharp McKnight, together with co-counsel, obtained final approval of a $61 million settlement in a long-running ERISA class action against General Electric. The UnitedHealth and GE settlements were among the most significant ERISA settlements of 2024, the firm added.
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From: BenefitsPRO
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