Clorox Must Face Novel ERISA Suit Over 401(k) Forfeiture Usage

A former Clorox Co. employee advanced a proposed class action saying the company mismanaged its 401(k) plan by using forfeited money for its own benefit instead of using it to lower workers’ expenses.

The cleaning products company is plausibly accused of fiduciary disloyalty and imprudence in connection with its decision to use 401(k) forfeitures to reduce the contributions it would otherwise have to make to the plan, Judge Yvonne Gonzalez Rogers said Monday. The new factual allegations in James McManus’s amended complaint, “while sparse,” are enough to get his Employee Retirement Income Security Act claims past a motion to dismiss, ...