The IBM committee wanted the court to reconsider its decision last month reviving a proposed class action by workers who say they lost out on retirement savings when the company’s stock price fell 7 percent.
The December ruling marks a rare win for 401(k) investors in a series of Employee Retirement Income Security Act cases that have been almost universally dismissed.
Courts, following the U.S. Supreme Court’s 2014 decision in Fifth Third Bancorp v. Dudenhoeffer, have rejected lawsuits involving RadioShack, WellsFargo, Target, Lehman Brothers, Citigroup, Whole Foods, JPMorgan, L-3 Communications, and BP Plc, among others.
The Second Circuit said the IBM defendants might be liable to the company’s workers for failing to make an early corrective disclosure of the stock’s troubles. The companies say the decision creates conflicting standards for 401(k) plan fiduciaries who also serve as corporate officers.
Zamansky LLC represented the IBM workers. Davis Polk & Wardwell LLP represented the defendants.
The case is Jander v. Ret. Plans Comm. of IBM, 2d Cir., No. 17-3518, order denying petition for rehearing 1/18/19.