Energy powerhouse Hess Corp. has agreed to settle a proposed class action lawsuit accusing the company of mismanaging its employee retirement plan and costing workers millions in lost savings, according to new filings in Texas federal court.
The settlement comes after a contentious year-long legal battle led by former Hess employee Joshua Wagner, who alleged the company packed its $903 million 401(k) plan with expensive, underperforming investment options.
On Monday, U.S. District Judge James Wesley Hendrix vacated the trial date and all related deadlines after both sides informed the court that they had reached an agreement. The judge directed Wagner and Hess to file for preliminary approval of the settlement by Nov. 3, marking a major development in the closely watched ERISA dispute.
Allegations of Mismanagement and Excessive Fees
Filed in February 2024, Wagner’s lawsuit claimed that Hess violated the Employee Retirement Income Security Act (ERISA) by offering target-date funds, single asset class investments, and index funds with unreasonably high expense ratios.
According to Wagner, the company could have offered employees lower-cost, better-performing alternatives, but instead left participants paying steep fees that ate into their long-term savings.
He specifically pointed to the T. Rowe Price target-date mutual funds, arguing that Hess should have replaced them with collective trust equivalents—nearly identical investment vehicles that typically carry lower fees.
“The company’s inaction directly diminished the value of employees’ hard-earned retirement savings,” Wagner alleged in his complaint.
