HP 401(k) Forfeiture Reallocation Lawsuit Goes for Second Shot.

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Participant-Plaintiff Amends Lawsuit Against HP Inc., Alleging Fiduciary Breaches.
In a renewed legal maneuver, the participant-plaintiff involved in a forfeiture reallocation lawsuit against HP Inc. has filed an amended complaint in the U.S. District Court for the Northern District of California (case number 5:23-cv-05875). This legal action follows the dismissal of the original suit, which Judge Beth Labson Freeman considered as advancing a novel legal theory regarding the handling of forfeited funds in the HP 401(k) plan.

The amended complaint maintains the core argument that HP’s fiduciaries breached their duty of loyalty by opting to utilize forfeited plan assets to offset the company’s own contribution expenses instead of allocating them to reduce administrative costs borne by participant accounts. According to the plaintiff, this decision primarily served HP’s interests rather than those of the plan participants and beneficiaries.

The plaintiff asserts that HP’s fiduciaries failed to conduct a proper evaluation of the best use of forfeited funds, ignoring potential conflicts of interest inherent in their dual roles as plan sponsor and administrator. It alleges that this failure resulted in diminished plan assets and increased expense deductions from participant accounts, actions purportedly contrary to the fiduciary responsibilities outlined in ERISA (Employee Retirement Income Security Act).

Furthermore, the amended complaint seeks equitable relief under 29 U.S.C. § 1109, including the disgorgement of any profits gained by HP as a result of the alleged breaches of fiduciary duty. The outcome of these amended claims remains uncertain, pending further proceedings and judicial review.

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July 23, 2024 at 3:09 PM