In a legal twist resembling a high-stakes automotive maneuver, Advance Auto Parts has accelerated toward resolution, agreeing to pay a hefty $1.7 million to settle a class action. The lawsuit accused the automotive giant of steering its employee 401(k) plan onto a costly course, laden with investments and fees totaling a staggering $1 billion.
Advance Auto To Pay $1.7M To End Suit : A Speedy Resolution Unveiled
In a decisive move revealed in a Virginia federal court filing, Advance Auto Parts has chosen to put the brakes on this legal saga. Five resilient workers leading the charge disclosed that Advance Stores Co. Inc. has committed to conducting a meticulous request for proposals concerning the plan’s recordkeeping needs within the next three years.
Advance Auto To Pay $1.7M To End Suit : Revving Up for Change
This settlement not only hits the brakes on alleged fiduciary misconduct but also demands the company’s retirement plan committee to attend annual fiduciary training sessions. It’s akin to overhauling the engine of accountability to ensure smoother financial rides for the plan’s participants.
Financial Fuel for Legal Engines
A substantial portion of the $1.7 million settlement, precisely $566,610, has been earmarked for attorney fees. On top of this, there’s an allocation of up to $100,000 for attorney expenses and a revved-up $10,000 incentive award for each of the named plaintiffs, ensuring the legal pit crew is handsomely compensated for their efforts.
Advance Auto To Pay $1.7M To End Suit : A Pit Stop for Justice
The legal journey reached a crescendo on Tuesday, following the workers’ November 3 notification to the court announcing a settlement in principle with Advance after a voluntary mediation session. “Plaintiffs believe the settlement is an excellent result, providing a substantial, immediate payment to settlement class members and eliminating the risks and cost of trial,” the workers declared with confidence. “A trial could result in a reduced recovery or no recovery at all.”
Allegations of Financial Misalignment
The workers had asserted in their October 2021 Employee Retirement Income Security Act lawsuit that Advance Auto Parts deliberately chose expensive mutual funds for the plan, overlooking more affordable alternatives. The accusation extended to claims of the company neglecting to leverage the plan’s considerable size for negotiating lower management fees.
Advance Auto To Pay $1.7M To End Suit : The $1 Billion 401(k) Plan
According to the suit, the 401(k) plan boasted over $1 billion in assets and catered to more than 22,000 participants as of December 2020. The legal battle, which began with the workers and Advance seeking class certification in April, gained momentum when U.S. District Judge Michael F. Urbanski approved a group encompassing all beneficiaries in the company’s 401(k) plan from October 2015 through the suit’s closure.
Expanding the Settlement Horizon
Tuesday’s motion unveiled a strategic expansion of the settlement class, now even accommodating those who had previously signed a release with the company. This inclusion enhances the overall fairness of the deal, ensuring a comprehensive resolution for all affected parties.
