Defense behemoth L3Harris has pledged a hefty $650,000 to settle a class action lawsuit, culminating accusations of breaching federal benefits law. The lawsuit, spotlighting exorbitant fees and costly investment options in the retirement plan, concluded with a Florida federal court filing.
L3Harris To Pay $650K in 401(k) settlement : Allegations and Resolution
Former employees, spearheaded by Robert J. Stengl, petitioned the court to approve the settlement, effectively closing their Employee Retirement Income Security Act (ERISA) lawsuit against L3Harris Technologies Inc. The aerospace and defense titan was accused of flouting fiduciary duties under ERISA, neglecting to negotiate lower fees and retaining pricy investment options in its $5.2 billion L3 Technologies Master Savings Plan.
The settlement, disclosed on Friday, marks the resolution before the court could render a judgment on L3Harris’s motion for summary judgment. It brings respite to approximately 50,000 plan participants. Plaintiffs lauded the settlement as a significant triumph, ensuring immediate relief and averting the risks and expenses of a trial.
Settlement Terms and Coverage
The agreement encompasses L3Harris 401(k) participants and their beneficiaries who were part of the plan between November 23, 2015, and December 31, 2019. Lead plaintiffs are slated to seek incentive rewards from the settlement, with attorneys angling for a share of nearly $217,000.
Allegations of Fiduciary Negligence
The lawsuit, initiated in March 2022 against the Melbourne-based conglomerate, its investment committee, and board of directors, underscored discrepancies in fees compared to other similarly sized plans. Despite substantial bargaining power, plan participants were saddled with exorbitant recordkeeping and administrative fees, dwarfing those of comparable plans.
