Labor Firm Engstrom Lee Seeks to Build on Nichols Kaster Role

Four attorneys at employee rights firm Nichols Kaster often pursued financial operations that pushed their own mutual funds onto their workers through company 401(k)s.

Now they’ve struck out on their own at a new firm and still have those types kinds of cases in mind—as well as other violations of the Employee Retirement Income Security Act.

“We’ve absolutely seen improvement in practices in this area” of companies putting their own interests over those of employees, said Carl Engstrom, a partner with the new firm, Engstrom Lee McDonough Thompson & Thomson.

The Minneapolis-based plaintiffs class action firm is focusing on retirement, consumer and employment cases. It’s representing current and former employees suing technology company A360 Inc., alleging that executives organized a buyback at a market value that deprived employees of millions of dollars.

Engstrom and three others who joined the new firm as name partners—Jennifer Lee, Brandon McDonough, and Mark Thomson—were ERISA lawyers when they worked at Nichols Kaster.

The partners had gained enough experience to start their own firm and were eager to have an ownership stake in a new operation, Engstrom said.

“We’ll miss them,” said Paul Lukas, a Nichols Kaster partner, in a written statement, “but understand their desire to give it a go on their own.”

The fifth name partner at Engstrom Lee, Nicholas Thompson, is a trial lawyer who specializes in representing railroad workers in discrimination cases. He’s also a retired welterweight mixed martial artist with a record of 38-14-1.

The new firm plans to file about a half-dozen new cases per year, Engstrom said. One of the firm’s suits alleges that participants in a Washington state union retirement plan were victims of investments in risky hedge funds.

Companies are now refraining from many of the behaviors he targeted at Nichols Kaster, Engstrom said, because the operations want to avoid having to settle class action lawsuits for millions of dollars.

In 2019, Deutsche Bank AG settled a class case for $21.9 million after more than 34,000 current and former plans alleged that the bank had included poorly performing investment vehicles in its retirement plans with high fees paid to the company.

A judge found in another Nichols Kaster class case the following year that Fidelity Investments failed to provide sufficient oversight of the mutual funds it offered employees, or the administrative expenses the funds charged.

Employees with dozens of other companies like John Hancock Life Insurance Co., JPMorgan Chase & Co., and McKinsey & Co. have faced, and in many cases settled, similar claims.

—Jacklyn Wille contributed to this report