Another Chance for LinkedIn ERISA Suit Plaintiffs

After finding deficiencies in plaintiffs’ claims of impudence and disloyalty in connection to specific investments and plan fees, Judge Edward J. Davila offers LinkedIn ERISA suit plaintiffs time to correct the issues.

The Case: Douglas G. Bailey, Jason J. Hayes, and Marianne Robinson v. LinkedIn

The Court: U.S. District Court for the Northern District of California

The Case No.: 5:20-cv-05704-EJD

The Plaintiff: Douglas G. Bailey, Jason J. Hayes, and Marianne Robinson

One current and two former participants of the LinkedIn Corp. 401(k) Profit Sharing Plan and Trust filed an ERISA lawsuit claiming that LinkedIn, its 401(k) committee for breaches of ERISA (Employee Retirement Income Security Act) fiduciary duties, and its board of directors breached their fiduciary duties. According to the plaintiffs’ claims, the LinkedIn plan maintained over $164 million in assets over the course of the class period (and over $817 million in 2018), which qualifies the plan as a large plan in the DC plan marketplace with substantial bargaining power regarding the fees charged against participants’ investments. The plaintiffs allege that the fiduciaries did not leverage their bargaining power to attempt to reduce plan expenses or carefully consider each investment option offered in the plan to ensure it was a good option.

The Defendant: LinkedIn

The Defendant in the case, LinkedIn, argued that the plaintiffs did not claim to have actually invested in any of the challenged funds, and therefore did not establish that they suffered a concrete injury (according to the standard set by the U.S. Supreme Court in Thole v. U.S. Bank N.A.) However, the judge did indicate that claims based on excessive management fees would not require plaintiffs to plead their individual investment in specific funds if management fees are charged to all plan participants regardless of their chosen investments in the plan.

Summary of the Case: Douglas G. Bailey, Jason J. Hayes, and Marianne Robinson v. LinkedIn

The Defendants’ motions to dismiss the lawsuit alleging fiduciaries of the LinkedIn Corp. 401(k) Profit Sharing Plan and Trust violated the Employee Retirement Income Security Act (ERISA) by allowing the plan to pay excessive fees have been granted in part and denied in part. Judge Edward J. Davila gave the plaintiffs time to file another complaint addressing “deficiencies” he found in the original complaint. While the judge indicated that exorbitant plan fee claims of this nature could be based on an injury to a plan’s assets unrelated to specific funds if the plan participants were all assessed a portion of the injury, the plaintiffs need to amend their claim to expressly state such in the complaint.

If you have questions about California employment law or if you need to file an ERISA lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys can assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.