Ex-Home Depot Staffers Ask for Early Judgment

On Behalf of | Aug 3, 2021 | News

By Ben Miller

Seven former employees of Home Depot who participate in the firm’s 401(k) plan last month asked a Georgia district judge to affirm that their former employer mismanaged their assets with imprudent investments and high fees.

They argued that the evidence they have presented is sufficient to prove that the plan is mismanaged. In July 2018, they claimed that Home Depot improperly selected BlackRock target-date funds and overpaid investment advisors Alight Financial Advisors and Financial Engines.

The lawsuit was filed in April 2018 and alleged that the hardware giant cost plan participants approximately $140 million in losses due to excessive recordkeeping fees and overpriced investment options. Home Depot has asked the judge three times to dismiss the case, which in November 2019 entered its discovery phase.

Home Depot and its lawyers did not respond to requests for comment.

The evidence that the plaintiffs provided showed “that as a matter of law Home Depot did not follow a prudent process when evaluating the BlackRock target-date funds,” said Charles Field, partner at Sanford Heisler Sharp who represents plaintiffs. The firm showed that between 2012 and 2017, the funds failed to meet their investment objective of having “a good three- and five-year track record,” he added.

The BlackRock Lifepath suite of collective investment trusts ranked in the bottom 15% to 28% of funds in their respective peer groups, according to the plaintiffs’ heavily redacted bid for early judgment. Seven of the CITs underperformed the median funds in their Morningstar categories during at least three years between 2011 and 2015, the filing states.

Home Depot’s 401(k) had $7.4 billion in net assets and 419,494 participants at the end of 2018, according to BrightScope.

The plaintiffs’ bid to secure an early ruling from the Georgia district court is only meant to establish Home Depot’s liability because they intend to pursue monetary relief at trial, Field sad.“The fiduciaries just couldn’t be bothered with their fiduciary duty,” Field said. “We felt that they didn’t devote enough attention to the whole process.”

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