WASHINGTON – The ERISA Industry Committee (ERIC) today filed an amicus brief with the U.S. Court of Appeals for the Sixth Circuit in Donelson et al. v. Meijer, Inc. The brief urges the Court to uphold a lower court ruling in favor of Meijer, Inc., which used standard retirement plan practices that plaintiffs claim violate federal law.
The brief argues that Meijer lawfully used forfeited employee contributions in its 401(k) plans to reduce future employer contribution obligations. ERIC, along with supporting groups, contends that this practice has long been accepted under ERISA and Treasury Department guidance.
“This case is a textbook example of the meritless litigation epidemic threatening America’s retirement system,” said Doug Hinson, Executive Director of the ERIC Legal Center. “Using plan forfeitures to reduce employer contributions is a long-settled, legally sound practice blessed by Treasury regulations, IRS guidance, and Congress itself. Allowing plaintiffs’ theory to stand would upend decades of accepted plan administration and expose employers to crushing liability for doing exactly what their plan documents allow. Workers and their families depend on stable, well-funded retirement plans, and ERIC will continue fighting to protect them.”
This case is part of a broader litigation wave that is targeting large employer retirement plans. Plaintiffs’ attorneys have filed nearly identical lawsuits against approximately 100 employers, filing cookie-cutter complaints that ignore the facts of each plan and are designed to force costly settlements rather than vindicate any genuine legal violation.
A significant majority of courts that have considered similar forfeiture theories have dismissed them, and ERIC’s brief urges the Sixth Circuit to do the same. If left unchecked, this litigation wave could lead employers to scale back or eliminate retirement plan matching contributions, directly harming the workers these lawsuits claim to protect.
ERIC was joined on the brief by the Chamber of Commerce of the United States of America and the National Retail Federation. Goodwin Procter LLP prepared the amicus brief, which is available here.