Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
Pioneer Natural Resources USA Inc. likely will face class action claims by an ex-worker at the company challenging the allegedly high fees in its 401(k) plan, if he can include in his lawsuit a current plan participant.
A federal judge in Colorado July 26 said he would reserve his ruling on the class status request because the former employee won’t be able to serve as a class representative for all plan participants—specifically current participants—since he no longer participates in the plan.
A class representative with no stake in a prospective remedy has no incentive to vigorously pursue those claims and is therefore an inadequate representative, said Judge William J. Martinez of the U.S. District Court for the District of Colorado.
Martinez’s unusual order underscores the broad discretion judges have to resolve legal issues in complex cases in which claimants seek class status.
Instead of denying the ex-worker’s request for class certification, Martinez reserved the ruling, holding that it would better serve the interest of justice not to force the parties through the “inevitable procedural hoops” that would follow if he denied it now. In such a case, the former employee would have to search for a new or additional class representative, file a motion to amend the lawsuit to add that person as a named plaintiff, and, if that motion was granted, file a renewed motion for class status.
Martinez said that he would likely grant class status to the worker on his claims that Pioneer violated the Employee Retirement Income Security Act by allowing unreasonably high record-keeping fees and failing to monitor the fiduciaries who administered the plan.
The decision comes one month after Martinez tossed the ex-employee’s claim that the company violated federal benefits law by keeping a money market fund that had poor returns as an investment option in its $665 million plan. The ex-employee didn’t have standing to bring this claim because he didn’t invest in the particular fund at issue, Martinez said.
In his latest order, Martinez granted the ex-employee leave to file an amended lawsuit naming a current participant in the plan as a co-plaintiff or substitute plaintiff, on or before Aug. 24.
Franklin D. Azar & Associates PC represents the worker. O’Melveny & Myers LLP and Bryan Cave Leighton Paisner LLP represent Pioneer.
The case is Barrett v. Pioneer Natural Res. USA, Inc., D. Colo., No. 1:17-cv-01579-WJM-NYW, order reserving ruling on class certification 7/26/18.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)