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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.

Partial Dismissal Narrowed the Case

In March 2025, Judge Hendrix partially granted Hess’s motion to dismiss, allowing some of Wagner’s claims to move forward while striking others.

The court ruled that Wagner had presented sufficient factual support to maintain his argument regarding the T. Rowe Price target-date funds, but found his allegations over the single asset class investments and index funds were too weak to proceed.

This partial dismissal narrowed the scope of the case but kept alive the central argument that Hess failed its fiduciary duty by not seeking lower-cost, comparable options for plan participants.

Settlement Brings a Quiet End to the Dispute

While details of the Hess 401(k) suit settlement remain under wraps, the agreement effectively ends months of litigation that spotlighted the growing scrutiny over employer-sponsored retirement plans.

The case is one among a wave of ERISA lawsuits filed across the country in recent years, as workers increasingly challenge large corporations over excessive plan fees and questionable investment strategies.

With the trial now canceled and both parties moving toward court approval, the settlement represents a quiet but significant resolution in the ongoing debate over how corporate America manages its employees’ futures.