Aerospace and defense technology company L3Harris has agreed to settle an Employee Retirement Income Security Act (ERISA) class action lawsuit for $650,000. Plan participants in the company's $5.2 million 401(k) plan claimed that the defense contractor violated ERISA by charging excessive fees and retaining expensive investment options. The case is Stengl et al. v. L3Harris Technologies, Inc. et al., case number 6:22-cv-00572, U.S. District Court for the Middle District of Florida.
The settlement resolves the lawsuit before the court could ruling on a pending motion for summary judgment. The proceeds of the settlement will benefit about 50,000 plan participants who invested in the plan from Nov. 23, 2015, through Dec. 31, 2019.
Former L3Harris employees filed suit against the company, its investment committee, and its board of directors in March 2022. They claimed that despite the large size of the retirement plan, which had significant bargaining power, participants were paying $68 – $80 in administrative fees, while participants in similarly sized plans were paying only $20. Furthermore, lower fees were available for many of the funds, but the company and its investment committee had made no significant changes to the plan's investment portfolio since 2015.
U.S. District Judge Paul G. Byron granted class certification in June 2023, and the parties reached a resolution through mediation at the end of 2023. Trial had been scheduled to begin on February 5, 2024.
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