Sanford Heisler Sharp Files Amended Complaint Expanding ERISA Class Action Against UnitedHealth Group
Names CFO John Rex as an individual defendant and adds new claims against all the defendants
MINNEAPOLIS, Aug. 24, 2022 (GLOBE NEWSWIRE) -- Sanford Heisler Sharp today filed an amended class action complaint against UnitedHealth Group, Inc. that contains new allegations and substantially expands the scope of Snyder v. UnitedHealth Group, et al., an ERISA class action filed last year in the federal District Court for the District of Minnesota.The matter, which was certified as a class action in February 2022, centers on UnitedHealth’s decision to keep one of the worst performing investment options in the entire market—the Wells Fargo Target Fund Suite—as the default investment for UnitedHealth’s 401(k) retirement plan for over a decade. As the amended complaint alleges, Wells Fargo was a critical customer and financier for UnitedHealth, and UnitedHealth executives personally intervened to keep the Wells Fargo Target Fund Suite on UnitedHealth’s 401(k) Plan to curry favor with, and benefit, their key business partner, Wells Fargo.
Based on information that was only recently produced in discovery, the amended complaint presents a detailed chronology of UnitedHealth’s decision-making behind closed doors, including the role played by UnitedHealth’s CFO, John Rex. The complaint alleges that the 401(k) plan’s independent investment consultant recommended removing the Wells Fargo Target Fund Suite, and the 401(k) plan’s own Investment Committee ranked the Wells Fargo Target Suite lower than all of the other peer funds it considered. But, according to the amended complaint, UnitedHealth’s executive leadership, led by CFO John Rex, focused on UnitedHealth’s lucrative business relationships with Wells Fargo and overruled the Investment Committee’s plan to remove the Wells Fargo Target Fund Suite. To justify keeping Wells Fargo, UnitedHealth allegedly shrouded its decision-making process in secrecy, threw out key findings that the Investment Committee had made, and abandoned the 401(k) plan’s written criteria for screening investments. The amended complaint claims that UnitedHealth let Wells Fargo pitch a new strategy at the eleventh hour, then invested billions of dollars of employee savings in that untested strategy without engaging in the rigorous evaluation that ERISA requires.
Based on this information, the amended complaint names CFO John Rex as an individual defendant pursuant to 29 U.S.C. § 1109(a) and adds new claims against all the defendants for three (3) additional violations of ERISA: breaching ERISA’s duty of loyalty (in violation of 29 U.S.C. § 1104(a)(1)(A)), engaging in prohibited transactions (in violation of 29 U.S.C. § 1106), and failing to adhere to Plan documents and instruments (in violation of 29 U.S.C. § 1104(a)(1)(D)). The amended complaint also presents additional data to further buttress the lawsuit’s original two (2) claims, for violations of ERISA’s duty of prudence and duty to monitor. In a decision on December 2, 2021, Chief Judge John Tunheim already rejected a bid by UnitedHealth to dismiss those claims.
Charles Field, the Chair of Sanford Heisler Sharp’s Financial Services Litigation Practice Group and class counsel in the lawsuit, said, “Documentary evidence demonstrates that when UnitedHealth’s fiduciaries left billions of its employees’ savings with Wells Fargo, they ignored their 401(k) plan’s own investment criteria and abandoned the rigorous evaluation that ERISA demands. Their conduct was a clear violation of ERISA.”
Alexandra Harwin, a partner at Sanford Heisler Sharp who also serves as class counsel, added, “ERISA strictly prohibits fiduciaries from using participants’ retirement money as a bargaining chip for corporate interests. But the evidence indicates that the fiduciaries to UnitedHealth’s 401(k) plan did just that.”
The case is brought as a class action on behalf of over 150,000 individuals who were invested in the Wells Fargo Target Fund Suite through UnitedHealth’s 401(k) plan. The class is represented by Mr. Field, Ms. Harwin, David Sanford, Kevin Sharp, Leigh Anne St. Charles, and Sean Ouellette of Sanford Heisler Sharp, LLP, as well as Susan M. Coler of Halunen Law.
*About Sanford Heisler Sharp*
Sanford Heisler Sharp is a public interest and civil rights law firm with offices in New York, Washington, DC, San Francisco, Palo Alto, Atlanta, Baltimore, Nashville, and San Diego. The firm focuses on employment discrimination, Title IX, wage and hour, whistleblower and qui tam, criminal/sexual violence, financial services, and Asian American litigation and finance matters. Our lawyers have recovered over $1 billion for our clients through many verdicts and settlements. In 2022, The National Law Journal named Sanford Heisler Sharp Civil Rights Firm of the Year, and it recognized the firm in 2021 as both the Employment Rights Firm of the Year and the Human Rights Firm of the Year. The firm has devoted countless pro bono hours in representing Leonard Peltier. The United Nations Human Rights Council’s Working Group on Arbitrary Detention called on the United States to “take urgent action to ensure the immediate release of Mr. Peltier,” an indigenous rights activist who is a Sanford Heisler Sharp client that has been wrongfully incarcerated by the U.S. government for almost 50 years.
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