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Plan Investments and Fiduciary Duties

With the rise of the 401(k) plan as a primary vehicle to fund retirement, there has been a concomitant rise in litigation challenging ERISA fiduciaries regarding plan investments, including investments in employer stock in publicly traded companies, valuing and acquiring privately held ESOPs, and fee and expense litigation in 401(k) plans. Attorneys at Holifield Janich Rachal Ferrera, PLLC (“HJRF”) have extensive experience in defending and advising fiduciaries regarding these issues, including from member Robert Rachal’s prior work at the premier ERISA litigation practice at Proskauer. Technology and partnering with providers, in-house counsel, and other law firms allows us to handle cases of all sizes, and couple our experience in the area with the service and value offered by a smaller firm. Some of the significant cases and advice in this area includes:

  • Litigation on closely held ESOP investments – Hans v. Tharaldson, 2011 WL 7179644 (Oct. 31, 2011) (defending seller/ESOP trustee; summary judgment rulings on claim ESOP paid too much for $1 billion hotel company); 2011 WL 6937598 (Dec. 23, 20110 (Daubert rulings); 2010 WL 1856267 (D.N.D. May 7, 2010) (class rulings) (successful summary judgment and Daubert rulings led to amicable settlement).
  • Advise directors & officers on fiduciary duties – Advise and present to boards and officers of Fortune 500 companies on minimizing fiduciary risks and exposures, including in merger and acquisitions, and on employer stock investments.
  • Advise on limiting fee and expense exposures in 401(k) plans – Advise companies and financial institutions on best practices and ways to limit exposures on fees and expenses for 401(k) plans.
  • Litigation on plan investments in publicly traded employer stock – Hastings v. Wilson, 516 F.3d 1055 (8th Feb. 22, 2008) (defending ALPA-appointed committee members) (successfully asserted standing and Railway Labor Act defenses that led to case dismissal); Langbecker v. EDS, 476 F.3d 299 (5th Cir. 2007) (defending company, CEO, CFO, and plan committees) (successful strategy attacking class led to amicable settlement below amount previously rejected by the district court); Brown v. Owens Corning, 622 F.3d 564 (6th Cir. 2010) (defending trustee against class action claims breached duties re 401(k) plan investments in employer stock) (Sixth Circuit affirmed dismissal based on adoption of broad rule on accrual of statute of limitation defense).
Publications and Presentations

Led by Robert Rachal, attorneys at HJRF also speak and write extensively regarding fiduciary duties and plan investments. Representative examples include:

Books & Articles:

Robert Rachal, chapter co-author, ERISA Litigation (BNA 5th ed. 2014) Chpt. 41 “Fiduciary Duties Regarding 401(k) & ESOP Investments in Employer Stock; and Chpt. 34 “Fees and Expenses Litigation in Defined Contribution Plans.

Robert Rachal, co-author article, “View From Proskauer:  ERISA Fee Litigation Continues to Expand with New Claims Seeking to Impose Heightened Fiduciary Standards for 401(k) Plans,” in Bloomberg BNA, Pension & Benefits Daily (July 29, 2016).

Robert Rachal, co-author article, “View From Proskauer: 401(k) Fee Litigation – Practices to Mitigate Fiduciary Risk,” in Bloomberg BNA, Pension & Benefits Daily (January 7, 2016).

Robert Rachal, co-author article, “401(k) Fee Litigation: Recent Case Teachings on Exposures and Practices to Mitigate That Risk,” in 28 No. 4 Benefits Law Journal 14 (Winter 2015).

Robert Rachal, author article, “Debate Continues Over Fiduciary Status of 401(k) Plan Service Providers,” in Thompson, 401(k) Handbook (July 2014)

 Robert Rachal, author article, “Proof of Imprudence, Causation, and Damages in Fiduciary Breach Claims Involving Plan Investments,” in Bloomberg Law Reports, Labor & Employment (February 2012).

Robert Rachal, co-author article, “2010 Employer Stock Cases:  The Good and the Better – The Defense Perspective,” in Bloomberg BNA, Pension & Benefits Daily (February 17, 2011).

Robert Rachal, author article, “Fee Litigation:  Has a Tipping Point Been Reached?” guest article in Employment Law 360 (April 15, 2008).

Robert Rachal, co-author article,“Plan and Corporate Governance:  Protecting Your Directors and Officers From Personal Liability Under ERISA,” HR Advisor (July/August 2005).

Robert Rachal, author article, “Director & Officers:  Limiting Personal Liability Under ERISA In a Post-Enron World,”  HR Advisor (Nov/Dec 2002).

Robert Rachal, co-author article, “Director & Officers ERISA Liability Post-Enron,” BNA Benefits Practice Center, Journal Reports:  Law and Policy (November 2003).

 Speeches:

Robert Rachal, panel presenter at American College of Employee Benefits Counsel on recent developments, with a focus on fee Litigation (September 2016, Philadelphia, PA).

Dan Janich, Robert Rachal and Al Holifield, presenters at Employee Benefits Update Seminar on “ERISA Litigation Update” and “Retirement Industry Update and Trends” (September 2016, Nashville, TE).

Dan Janich and Robert Rachal, panel presenters at National Center for Employee Ownership 2016 National Conference on “ESOP Fiduciary Duties & Corporate Governance: Compliance & Litigation Perspectives” (April 2016, Minneapolis, MN).

Robert Rachal, panel presenter at American Conference Institute 11th and 12th National Forum on “ERISA Litigation on Working with Independent Fiduciaries to Protect Participants and Reduce Risk” (March & June 2016, Chicago, IL & San Francisco CA).

Al Holifield and Robert Rachal, speakers at Employee Benefits Update Seminar on Fiduciary Issues & Trends (September 2015, Knoxville & Nashville, TE).

Dan Janich, panel presenter at NCEO Employee Ownership Conference 2015, “The Valuation Report Checklist: What Trustees Should Look For” (March 2015, Denver, CO).

Robert Rachal, moderator of ABA JCEB Webinar on It’s a New World for ESOPS:  The DOL/Great Banc Fiduciary Process Agreement and Recent Court Decisions (Oct. 2014).

Robert Rachal, panel presenter at ABA Employee Benefits Committee mid-winter meeting on “ESOP Litigation Update” (February, 2014, New Orleans, LA).

Dan Janich, panel presenter at ABA Employee Benefits Committee mid-winter meeting on “408(b)(2) and 404(a) Disclosures and the Ongoing Fee Litigation” (Feb. 2013, Charleston, SC).

Robert Rachal, panel presenter at ABA JCEB National Institute program on ERISA Basics on “Remedies” (October 2013, Chicago, IL).

Robert Rachal, speaker at ABA JCEB Teleconference on Employee Stock Ownership Plan (“ESOP”) Litigation Trends and Hot Button Issues (June 2013).

Robert Rachal, co-chair of ABA JCEB National Institute program on ERISA Litigation, and panel presenter on “Employer Stock Litigation,” and “Fee Litigation” (November 2011, Chicago, IL).

Dan Janich, panel presenter at ABA Employee Benefits Committee mid-winter meeting on “Update on Fee Litigation and the Impact of the Regulations” (February 2011, Savannah, GA).

Robert Rachal, panel presenter at ABA JCEB National Institute ERISA Litigation on “Employer Stock Litigation” (November 2010, Chicago, IL).

Robert Rachal, panel presenter at BNA 401(k) Fiduciary Compliance Conference on “Compliance Reviews and Corrections – What the LaRue decision means for plan fiduciaries” (April 2008, Washington, D.C.).

Robert Rachal and Dan Janich, panel presenters at ABA Employee Benefits Committee mid-winter meeting on “ERISA Plan Fee Disclosures:  Legislative Proposals, DOL Regulatory Developments, and Litigation” (February 2008, New Orleans, LA).

Robert Rachal, panel presenter at ABA Annual Meeting, JCEB program on Ethics and Employer Securities (August 2007, San Francisco, CA).

Robert Rachal, speaker at JCEB Teleconference on “ERISA 401(k) Litigation and Settlements” (June 2006).

Robert Rachal, co-Chair and presented at Glasser LegalWorks Fiduciary Program on Prudent Investments in 401(k) and Other Plans (New York, NY and San Francisco, CA) (June 2006).

Robert Rachal, speaker at ASPPA Conference, The DOL Speaks, on Employer Securities: Do’s and Dont’s” (Washington, D.C.) (April 2006).

Robert Rachal, panel presenter at ABA Employee Benefits Committee mid-winter meeting on “ERISA § 404(c) Defense” (January 2006 Key Biscayne, FL).

Robert Rachal, speaker at ABA Annual Meeting, Business Law Program on “More Enron/WorldCom Fallout: Corporate Officers on the Fiduciary Hook, Directed Trustees Off” (August 2005, Chicago, IL).

Robert Rachal, co-Chair and presented at Glasser LegalWorks Fiduciary Program on “Managing and Investing Plan Assets” and “Plan and Corporate Governance” (June 2005, San Francisco; April 2005, New York City).

Robert Rachal, speaker at JCEB Teleconference on “Plan and Corporate Governance:  Rethinking the Roles of Officers and Directors” (May 2005).

Robert Rachal, presented at DOL Southwest Benefits Practitioners Group on 401(k) Litigation Issues (January 2005, Dallas, TX).

Robert Rachal, speaker ABA Joint Fall (Tax and Real Property, Probate & Trust) CLE Meeting on “Prohibited Transaction and Fiduciary Issues in Settling Plan and ERISA Claims” (October 2004, Boston, MA).

Robert Rachal, speaker at ABA Annual Meeting, Business Law and JCEB Presentation on “Director and Officer Liability Under ERISA” (August 2004, Atlanta, GA).

Robert Rachal, co-chair and presented at Glasser LegalWorks Fiduciary Program on “Managing and Investing Plan Assets” (May 2004, New York, NY).

Robert Rachal, speaker ABA JCEB teleconference on “Enron Part Two:  Directed Trustees and Employer Stock” (January 2004).

Robert Rachal, co-chair and presented at Glasser LegalWorks Fiduciary Program on “The Current 401(k) and Company Stock Cases” and “Risk Post-Enron:  Where the Litigation Is Going” (June 2003, Chicago, IL).

Robert Rachal, speaker at Georgetown University Law Center 21st Annual Employment Law and Litigation Institute on “Prosecuting and Defending ERISA Claims After Enron: The Changing Landscape” (April 2003, Washington, D.C.).

Robert Rachal, speaker at ABA JCEB teleconference on “DOL Positions in the Enron Litigation:  What Do They Mean for Plans and Plan Fiduciaries” (March 2003).

Robert has also been extensively quoted on plan investment issues.  Selected articles in which he has been quoted include:

“Fidelity Win Highlights Ways Companies Profit From 401(k)s,” in Pension & Benefits Daily (Bloomberg BNA July 15, 2016); Outlook 2015: Court Watchers Looking at Plan Fees, Retiree Benefits, Church Plans in 2015, Pension & Benefits Daily (Bloomberg BNA January 16, 2015); Hancock Fights to Fend Off Fiduciary Tag, Ignites (June 9, 2014); Panel Discusses Certification Methods in ERISA Class Actions Post-Dukes, Class Action Litigation Report (Bloomberg BNA March 12, 2014);  DOL Enforcement Strategy Targets Problems in ESOP Valuations, Speaker Says, Daily Labor Report (Bloomberg BNA February 11, 2014); Employer Stock: Solis Files Amicus Brief Asking Sixth Circuit To Reverse Limited View of ERISA Standing, Pension & Benefits Daily (BNA Jan. 18, 2011); Eighth Circuit Rules on ‘Net Seller’ Standing, Dodges Adoption of Presumption of Prudence, Pension & Benefits Daily (BNA Dec. 14, 2010);  Court Says KeyCorp Worker Has No Standing Where She Reaped Profit From Inflated Stock, 157 Daily Labor Reporter A-7 (BNA Aug. 16, 2010); Outlook:  Undisclosed Fees and Employer Stock Drops Top 2007 ERISA Legal Cases, 35 Pension & Benefits Reporter 3 (BNA Jan. 15, 2008);  Prudent Man With a Plan:  Most 401(k) Reforms Before Congress Don’t Address a Critical Source of Risk:  Fiduciary Duty, CFO.com (June 18, 2002).