“This court cannot choose a side in the ‘battle of the experts’ at the summary judgment stage,” Judge Biggs stated.
Disputes Over Recordkeeping Fees and Float Compensation
Regarding the recordkeeping fees, Judge Biggs cited numerous disputes between the two sides’ experts, including a disagreement about whether Labcorp should have monitored float compensation that Fidelity received on plan participants’ money. The parties also disagreed on exactly how much money Fidelity earned regarding that compensation, Judge Biggs said.
McDonald’s amended complaint filed in November 2022 describes float compensation that LabCorp agreed to allow Fidelity. Labcorp agreed to route plan participants’ money through a Fidelity clearing account whenever it was deposited or withdrawn and agreed to let Fidelity keep interest or other investment returns earned on plan participant money while the money sat in the clearing account that was typically for a period of two to three days, the complaint said. Labcorp said in a reply brief filed in December in defense of its recordkeeping fees that following negotiations with its investment consultant Captrust, Fidelity had agreed to rebate all revenue sharing and float compensation back to the plan beginning in July 2018.
Class Action Status and Expert Testimony Rulings
The denial of summary judgment comes after 401(k) plan participants won class certification in October, certifying a group of approximately 55,000 beneficiaries who participated in the 401(k) plan from November 2016 to the present.
