Labor Agency Hit With Second Suit to Block ESG 401(k) Rule

Two Wisconsin-based 401(k) plan participants are suing the US Labor Department over its recently enacted ESG retirement investing rule, the second such federal lawsuit to challenge the Biden administration’s policy on socially conscious investing in workplace plans.

Both plaintiffs jointly filed suit in the US District Court for the Eastern District of Wisconsin Tuesday. They claim the department’s Employee Benefits Security Administration has exceeded its statutory authority by promulgating a rule that permits private-sector plans to consider environmental, social, and corporate governance factors when selecting and monitoring investments.

The department’s ESG rule that took effect late last month overturned a ...