For as long as there have been employees, employers have sought to take advantage of them. The Fair Labor Standards Act (FLSA) and New York wage and hour laws were enacted to protect employees and ensure they are paid proper wages and otherwise correctly compensated for their work.
This month, a lawsuit was filed against Morgan Stanley that accuses the investment firm of imposing high-fee and poorly performing in-house investment funds on their employees in its 401(k) plan. The company is accused of treating its employee 401(k) plan as a venue through which to promote its own mutual fund business and increase its profits at employee expense. Further, the lawsuit contends that Morgan Stanley is charging higher mutual fund fees to its employees than it charged to outside investors. The lawsuit seeks $150 million in damages and approximately 60,000 employees are class participants in the case.
But Morgan Stanley is not alone—several other high profile financial services companies have had lawsuits filed against them under the Employee Retirement Income Security Act (ERISA) for similar complaints. In the past year alone, lawsuits have been filed against, American Century Services LLC, Deutsche Bank, New York Life Insurance Co. and Neuberger Berman Group LLC. Although none of these cases have been adjudicated by the courts yet, the companies have not been successful in having the cases dismissed.
Employers who sponsor 401(k) plans for their employees have a fiduciary duty to put the financial interests of plan participants above their own and under the law are required to:
If an employer violates these or other rules they may be held liable and be in violation of their fiduciary duties. If you suspect this may be happening with your 401(k) plan, you may want to consult an attorney.
Leeds Brown Law, PC has represented thousands of employees in litigation &, mediation in relation to wage & hour claims. If you have questions about your 401(k) plan, the classification of your job, your employers failure to pay you proper wages and believe your employer may owe you compensation, please contact an experienced New York City wage hour lawyer at Leeds Brown Law. Our attorneys have years of experience successfully fighting for the rights of employees. We want to help you.