November 28, 2022

Volume XII, Number 332

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401(k) Plan Participant Waived ERISA Stock-Drop Claim

The D.C. Circuit affirmed the decision of a district court that Plaintiff Patrick Russell, a 401(k) plan participant, had knowingly waived his right to assert an ERISA stock-drop claim based on, among other things, the alleged imprudence of maintaining an employer stock fund as an investment option.  Russell argued that the district court erred by not providing him with a “reasonable opportunity” to conduct discovery and present evidence on the issue of whether he knowingly and voluntarily consented to the severance agreement.  The circuit court disagreed, concluding that all of the factors that go into evaluating whether a release was knowing and voluntary (e.g., the clarity of the agreement, the consideration given for the agreement, the plaintiff’s education and business experience, and whether plaintiff consulted with an attorney) were evident from the face of the severance agreement or within Russell’s own knowledge.

The case is Russell v. Harman Int’l Indus., 2014 U.S. App. LEXIS 23359 (D.C. Cir. Dec. 12, 2014). 

© 2022 Proskauer Rose LLP. National Law Review, Volume IV, Number 352
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About this Author

Joseph Clark Labor & Employment Attorney Proskauer Rose New York, NY
Senior Counsel

Joseph E. Clark is a senior counsel in the Labor & Employment Law Department and a member of the Employee Benefits & Executive Compensation Group where he focuses on complex employee benefits litigation.

Joe represents a diverse range of clients from the time a claim is asserted through trial or arbitration, whether it is defending plan fiduciaries against class action claims of fiduciary breach or prohibited transactions or in connection with government investigations, or defending employers against multiemployer pension plan claims for withdrawal liability.  These clients...

212-969-3178
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