On March 3, 2023, Plaintiffs, Douglas G. Bailey, Jason J. Hayes, and Marianne Robinson (collectively, “Plaintiffs”), filed an unopposed motion for preliminary approval of a $6.75 million settlement (“Settlement”) of their class action litigation against LinkedIn Corporation, the Board of Directors of LinkedIn Corporation, and the LinkedIn Corporation 401(k) Committee (collectively, “LinkedIn” or “Defendants”). The Settlement resolves allegations that LinkedIn mismanaged the LinkedIn Corporation 401(k) Profit Sharing Plan and Trust (the “Plan”) by failing to negotiate lower recordkeeping fees and maintaining underperforming funds in the Plan’s investment menu.
Plaintiffs first brought suit in August 2020, alleging that the fiduciaries of the Plan breached their legal duties by (1) failing to sufficiently monitor the Plan’s investments, resulting in the retention of imprudent funds instead of more suitable readily available alternatives, and (2) by causing the Plan to incur unreasonable expenses, which were paid by Plan participants. LinkedIn denies all allegations of wrongdoing.
In November 2021, the Honorable Edward J. Davila of the United States District Court for the Northern District of California dismissed the complaint, holding that the allegations lacked material factual details. Plaintiffs filed an amended complaint to cure the deficiencies the Court identified in December 2021, which LinkedIn moved to dismiss in January 2022. While the motion to dismiss was pending, Plaintiffs sought to certify a class of all participants and beneficiaries in the Plan at any time between August 14, 2014 and July 1, 2020. However, the Court never resolved either motion, as the parties paused the litigation to attempt to resolve their claims through mediation.
The Parties attended mediation in September 2022 and successfully reached a settlement agreement. Defendants will pay the aggregate amount of $6,750,000 into a Qualified Settlement Fund to be allocated to Current Participants, Former Participants, Beneficiaries, and Alternate Payees of the Plan pursuant to a proposed Plan of Allocation. This amount covers monetary relief to the settlement class members, awards to Plaintiffs, and attorneys’ fees and expenses.
Plaintiffs explained that “[r]esolving the action at this juncture allows the parties to avoid continued and costly litigation that would deplete resources which could otherwise be used for the resolution of the action, and which could result in a recovery less than that provided by the settlement, or no recovery at all.”
The employees are represented by Miller Shah LLP, Capozzi Adler PC, and Rosman & Germain LLP. LinkedIn is represented by Morgan Lewis & Bockius LLP. A hearing to consider the motion for preliminary approval of the Settlement has not yet been set.
Updates will be posted to this blog as the matter progresses. The case is In re LinkedIn ERISA Litigation, case number 5:20-cv-05704, filed in the U.S. District Court for the Northern District of California.
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