IBM Workers Win Rare Revival of Lawsuit Over Stock Price Drop

International Business Machines Corp. workers who accused the company of failing to protect their retirement savings from a 7 percent drop in IBM stock price convinced a federal appeals court to revive their lawsuit.

The decision is a rare win for 401(k) investors in a series of Employee Retirement Income Security Act cases that have been almost universally dismissed.

The fiduciaries of IBM’s 401(k) plan might be liable under ERISA for failing to make an early disclosure of the company’s struggles, the U.S. Court of Appeals for the Second Circuit held Dec. 10. The workers validly alleged that no prudent ...