Southwest Airlines ERISA Class Action

Case Name: Arthur Anderson and Manuel Rivera, et al. v. Southwest Airlines Co., et al.

Case type: Financial Mismanagement and ERISA Litigation

Filed in: U.S. District Court for the Northern District of Texas

Docket: Case No.: 3:25-cv-00214-S

Case Summary

On January 28, 2025, Sanford Heisler Sharp McKnight filed a representative action in the U.S. District Court for the Northern District of Texas on behalf of the Southwest Airlines Co. Retirement Savings Plan (and its predecessors, collectively, the Plan) and approximately 60,000 Plan participants and beneficiaries against Southwest Airlines Co. (“Southwest”).

The Complaint alleges that Southwest has breached and continues to breach its fiduciary duty of prudence and due care under the Employee Retirement Income Security Act (ERISA) by failing to remove a chronically underperforming investment option, the Harbor Capitol Appreciation Fund (“Harbor Fund”), from the Plan’s investment menu.

Under ERISA, fiduciaries are obligated to actively monitor investment options and remove those that become imprudent. The Harbor Fund, which is the only actively managed large-cap growth option in the Plan, has over $2 billion in Plan assets and comprises approximately 17% of the Plan’s assets.  It has consistently lagged its industry benchmark as well as other large-cap growth funds for over 15 years, according to the Complaint. This underperformance has resulted in millions of dollars in losses to the retirement savings of Plan participants and beneficiaries.

Named as Defendants are Southwest, its Board of Directors, and the Committees and their members that manage or have managed the Plan.

For the Plan, the Plaintiffs seek recovery of all investment losses caused by the fiduciary breach, the removal of any imprudent investments from the Plan, and the removal of the fiduciaries who have violated their duties to the Plan’s participants and beneficiaries under ERISA, among other forms of relief.