Texas Judge Lowers Bar for ESG Lawsuits Over Employer 401(k)s

A conservative Texas federal court’s decision to green-light a 401(k) lawsuit against American Airlines for its ties to environmentally friendly asset managers asserts a new, less-rigorous pleading standard that sets the stage for more private-sector ESG claims.

US District Court for the Northern District of Texas Judge Reed O’Connor denied the airline company’s motion to dismiss the proposed class action lawsuit on Feb. 21. The ruling shocked many in the workplace benefits industry who said they expected a swift end to what they call a frivolous environmental, social, and corporate governance claim.

O’Connor cited a “plausible story” ...