ADP 401(k) Lawsuit Advances; Novel Cross-Selling Theory Rejected

A 12-count lawsuit accusing Automatic Data Processing Inc. of mismanaging a 401(k) plan covering 114,000 people advanced in large part, but a New Jersey federal judge rejected a novel attempt to challenge marketing activities based on plan participant data, at least for now.

Beth Berkelhammer, a participant in the ADP TotalSource Retirement Savings Plan, sought to hold the company liable under the Employee Retirement Income Security Act for allowing the plan’s recordkeeper to use confidential participant data to sell unrelated investment products. Judge Esther Salas of the US District Court for the District of New Jersey rejected this legal theory ...