For Immediate Release
Washington, DC – The ERISA Industry Committee (ERIC) has filed an amicus brief in the Jander v. Retirement Plans Committee of IBM asking the U.S. Supreme Court to reverse a decision by the U.S. Court of Appeals for the Second Circuit that revived a proposed class action from IBM workers who said they were wrongly allowed to invest in overvalued company stock. ERIC filed the brief with the American Benefits Council.
The brief argues that the Second Circuit allowed a meritless breach-of-fiduciary-duty claim against an employee stock ownership plan (ESOP) fiduciary to proceed based on generic allegations. If the Court’s decision is allowed to stand employers would be discouraged from offering company stock as an investment option for fear that it would lead to litigation and costly discovery.
ERIC’s brief lays out three reasons the Court should review the case:
- ESOPs offer unique tax benefits to employees who participate in the plans
- The Second Circuit’s decision exposes ESOP fiduciaries to liability for meritless stock-drop suits
- The Second Circuit’s decision improperly merges corporate and fiduciary obligations
“It is imperative that the U.S. Supreme Court protect employee stock ownership plans. Employers want to offer employees the best opportunities to save for retirement and these plans are a very important option that benefits both parties,” said Annette Guarisco Fildes, President and CEO, ERIC.