A former lawyer at Husch Blackwell LLP has accused the law office of deducting funds from employee benefits earmarked for their retirement funds and instead using the money to cover the firm’s operating expenses. About 400 other employees have signed onto the class action, which includes six counts listing violations of the Employee Retirement Income Security Act of 1974 (ERISA).
With an income of over $700 million last year and a ranking of #78 on the Am Law 100, Husch Blackwell seems like an unlikely candidate for ripping off retirement plan contributions. The suit alleges otherwise, stating that the firm’s breaches of its fiduciary duty were both deliberate and planned. The named plaintiff has moved on to start his own law firm, but he and about 400 other employees believe Husch Blackwell helped themselves to their workers’ retirement savings.
The Most Important Investment You Can Make Is in Yourself (and Maybe a Roth IRA)
For many lawyers, retirement is the bright, shiny reward at the end of the long, long road of employment. It’s impossible to know how long you’ll live or how much money you’ll require, but it’s better to have a lot and not need it all than vice versa. Accordingly, ERISA has many protections. Among them, the Act requires transparency from employers who have retirement investment plans for their employees through a summary plan description (SPD) and clear explanations on how to file for benefits.
ERISA also protects employees by requiring a fiduciary to oversee retirement accounts like 401(k) plans. According to the lawsuit, Husch Blackwell should have given this a little more credence.
Isn’t There a John Grisham Novel About This?
Lead plaintiff Tyler M. Paetkau started working for Husch Blackwell in May 2022. Upon hire, he was offered the opportunity to contribute to a retirement fund through the firm. Money would be directly deducted from his employee paychecks and added to the fund’s assets by the 15th business day of the following month. At least, that was the agreement.
The lawsuit alleges that instead of sending the deducted funds where they were supposed to go, Husch Blackwell kept the employees’ retirement plan contributions and used them to pay for the operational expenses of the firm. It lists six violations of ERISA:
- Breach of the Executive Purpose Requirement
- Breaches of the Duties of Loyalty
- Breaches of the Duties of Prudence
- Prohibited Transactions
- Self-Dealing
- Breach of Co-Fiduciary Duty
Along with demanding a jury trial, Paetkau is seeking to have Husch Blackwell restore the funds it allegedly kept for itself, pay any profits that would have been earned, admit fault, hire an independent fiduciary to take over its retirement plans, and pay whatever damages the court finds appropriate. Paetkau’s due diligence in researching and bringing this ERISA litigation will be put to the test. Conversely, the Husch Blackwell defendants hopefully know a couple of good defense attorneys.
Related Resources
- Pros and Cons: Offering Employee Benefits (FindLaw’s Employment Law and Human Resources)
- Researching Attorney Discipline (FindLaw’s Guide To Hiring a Lawyer)
- How To Invest for Retirement (FindLaw’s Consumer Protection Law)
