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Colgate-Palmolive retirees are asking a New York federal judge to approve a $332 million class action settlement resolving claims that the consumer products giant underpaid lump-sum retirement benefits. The deal would bring closure to a lawsuit stretching back almost a decade, one that reached the Second Circuit Court of Appeals last year.

The motion for preliminary approval, filed Friday, follows the parties’ June announcement that they had reached a resolution in the long-running Employee Retirement Income Security Act (ERISA) case.

Dispute Traced Back to 2005 Pension Plan Change

The retirees sued Colgate-Palmolive Co. in 2016, alleging the company improperly slashed defined-benefit payouts after a 2005 pension plan amendment. They claimed Colgate miscalculated residual annuities for workers who chose lump-sum payments, leaving them shortchanged.

Class certification came in 2017, followed by a partial summary judgment win for the retirees in 2020. The Second Circuit affirmed that partial victory in March 2023, ruling that calculation errors undervalued lump-sum benefits.

The 2005 amendment itself remained largely hidden until 2011, when workers learned of it through a separate ERISA class action against Colgate. That earlier case ended in a $45.9 million settlement, but excluded claims tied directly to the amendment.

Who Benefits From the Settlement

Friday’s filing revealed that nearly 1,200 retirees and their spouses stand to gain from the Colgate-Palmolive $332M settlement, which also covers litigation expenses. Class counsel can seek up to 29% of the fund for attorney fees, plus $2.9 million in costs.

Lead class representative Rebecca McCutcheon, a former Colgate worker, is slated to receive a $10,000 service award.

The pact provides for both monthly annuity payments and a one-time payout covering past underpayments. Surviving spouses of deceased retirees are also eligible for benefits.

Mediation, Appeals and Final Hurdles

The agreement was reached after a 13-hour mediation session with JAMS mediator Marc Isserles. Mediation followed Colgate’s second failed appeal to the Second Circuit, which had sought to challenge a lower court order directing recalculated benefits.

Attorneys for the retirees declined comment Tuesday, while Colgate representatives and counsel did not immediately respond to requests.

The retirees are represented by Eli Gottesdiener and Albert Huang of Gottesdiener Law Firm PLLC. Colgate is represented by Robert S. Newman and Nicholas O. Pastan of Covington & Burling LLP.

If approved, the settlement will finally close the book on one of the most protracted ERISA pension disputes in recent history.