The United States Supreme Court ruled in favor of investors this week.
In LaRue v. DeWolff, Boberg & Associates, the court ruled that employees can sue employers under the Employee Retirement Income Security Act for mismanaging their 401(k) retirement plans. Companies are no longer protected from these claims. Business groups have strenuously argued that the law did not allow for individual claims.
James LaRue sued his employer DeWolff, Boberg, a Dallas consulting firm, claiming that the company failed to carry out his investment instructions for his 401(k), resulting in a loss of $150,000 in the value of his plan. Justice John Paul Stevens, writing for a unanimous court, said the law does allow for lawsuits to recover “fiduciary breaches that impair the value of plan assets” in individual accounts.
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