A Massachusetts federal judge has trimmed — but not tossed — a closely watched benefits case accusing dialysis giant Fresenius of misusing forfeited retirement funds, allowing key claims in the Fresenius 401(k) Forfeiture Suit to move forward.
U.S. District Judge William G. Young on Monday dismissed certain allegations under the Employee Retirement Income Security Act but ruled that workers had sufficiently pleaded that the company’s handling of forfeited 401(k) funds may have run counter to their interests.
Some Claims Dismissed, Others Advance
The lawsuit targets National Medical Care Inc., which does business as Fresenius Medical Care North America. Judge Young dismissed claims for breach of fiduciary duty and prohibited transactions under ERISA.
However, he allowed claims for breach of prudence and breach of loyalty to proceed, finding the workers had offered enough factual detail at the motion-to-dismiss stage.
“In the absence of binding authority, the court must honor the allegations of the complaint at the motion to dismiss stage, drawing all reasonable inferences in favor of the plan participants,” the judge wrote.
The ruling keeps alive the core question: whether Fresenius’ use of forfeited retirement funds favored the company’s balance sheet over employees’ nest eggs.
