On May 4, 2021, a District Judge in the United States District Court for the District of New Jersey ruled that a class action lawsuit against Quest Diagnostics Incorporated (“Quest”), the Quest Benefits Administration Committee (“Administrative Committee”), the Quest Investment Committee (“Investment Oversight Committee”), and individual members of the Committees (collectively, “Defendants”) was fit to proceed, denying Defendants’ attempt to dismiss the legal action. The lawsuit is being brought on behalf of participants and beneficiaries of the Quest’s Profit Sharing Plan (the “Plan”).
The Plan is a qualified tax-deferred defined contribution retirement plan. It is part of a Multiple Employer Plan, a type of plan designed to encourage smaller companies to share the administrative burden of offering tax-advantaged retirement savings to their employees. In addition to Quest, four other employers co-sponsor the Plan, allowing their eligible employees to participate.
The Plan, with over 40,000 participants and nearly $3.9 billion in assets, is in the top 0.1% of all 401(k) plans by size. Participants can direct their contributions into various preselected investment options or allow their account balance to be automatically invested in the Plan’s qualified default investment alternative.
Plaintiffs, represented by lawyers at Miller Shah LLP, alleged that Defendants breached their fiduciary duties under the Employee Retirement Income Security Act (“ERISA”) by (1) selecting and maintaining underperforming and unreasonably expensive funds in the Plan, (2) allowing participants to be charged excessive recordkeeping and administrative fees, and (3) failing to fully disclose the expenses and risk of the Plan’s investment options to participants.
In December of 2020, Defendants filed a motion to dismiss the case, arguing that the District Court lacked subject matter jurisdiction over Plaintiffs’ claims and that Plaintiffs failed to allege facts amounting to a claim upon which relief may be granted.
Defendants’ arguments were unsuccessful, as the District Court denied all counts of the motion to dismiss and ruled that Plaintiffs’ allegations were sufficient to maintain the suit. The parties will now proceed to discovery and prepare for summary judgment or trial.
Updates will be posted to this blog as the matter progresses. A class has not yet been certified in this action. The case caption for this lawsuit is In re Quest Diagnostics Incorporated ERISA Litigation, Case No. 20-07936-SDW-LDW, filed in the District of New Jersey.
The legal team at Miller Shah LLP has significant experience representing class action ERISA matters. If you have any questions regarding this subject or this post, please contact John Roberts (email@example.com), Alec Berin (firstname.lastname@example.org) or Jonathan Dilger (email@example.com). The firm can also be reached toll-free at (866) 540-5505.
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 Jim Probasco, Multiple Employer Plan (MEP), Investopedia (Jan. 18, 2020), https://www.investopedia.com/multiple-employer-plan-mep-definition-4766937#:~:text=A%20multiple%20employer%20plan%20is,savings%20plan%20to%20their%20employees.