Costco $3.2M ERISA Class Action Settlement Granted Final Approval
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On July 18th, 2022, the court granted final approval to the $3.2 million settlement agreement parties reached in March 2022 to resolve class action allegations. The class action alleged that Costco mismanaged the 401(k) plan in violation of the Employee Retirement Income Security Act (ERISA).
The Case: Soulek v. Costco Wholesale Corp., et al.
The Court: U.S. District Court for the Eastern District of Wisconsin
The Case No.: 1:20-cv-00937
The Plaintiff: Soulek v. Costco Wholesale Corp., et al.
The plaintiff in the case, Soulek, filed the class action on behalf of plan participants, beneficiaries, and alternate payees of the Costco 401(k) Retirement Plan. Eligible class members are retirement plan account participants as of the class certification date or participants who had a plan account on or after the last business day of a month on or after May 30th, 2014, with an account balance of $1,000 or more for at least 12 months beginning during the class period. The class period is from May 30th, 2014, through March 17th, 2022. The plaintiff's class action accused Costco of mismanagement resulting in the 401(k) plan incurring administrative and investment management fees that were higher than necessary.
The Defendant: Soulek v. Costco Wholesale Corp., et al.
The defendant in the case, Costco, is a sizeable membership-based chain of wholesale stores that sell various products (groceries, electronics, pet products, household goods, basic office supplies, and more). According to the company's website, the chain's membership is currently at more than a million members (or shoppers).
The Case: Soulek v. Costco Wholesale Corp., et al.
In March 2022, the parties involved in the case, Soulek v. Costco Wholesale Corp., et al., reached a $3.2 million class action lawsuit settlement agreement to resolve claims that the company mismanaged the 401(k) plan in violation of the Employee Retirement Income Security Act (ERISA). Costco denies any wrongdoing but has agreed to the settlement to resolve the class action ERISA claims. The Court granted the settlement final approval on July 18th, 2022. Under the terms of the Costco 401(k) settlement agreement, the company agreed that current plan participants would be eligible for an administrative fee reduction, with a maximum total value of $3.2 million. Former plan participants and current eligible participants (those who cease having a plan account by the settlement's effective date) can claim payment through the settlement agreement. Settlement payments to former plan participants are calculated on the number of quarters their plan account balance exceeded $1,000 during the class period. The amount is determined based on an allocation plan included in the settlement agreement.
If you have questions about California employment law or need to file an ERISA lawsuit, please contact Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.
