Trader Joe's didn't mismanage forfeited funds in retirement plan, US judge rules

By Reuters News

By Daniel Wiessner

Sept 28 (Reuters) - A federal judge in Boston ruled on Monday that Trader Joe's did not violate the federal law regulating employee benefits by using forfeited worker contributions to offset its own payments to an employee retirement plan.

  • Dozens of companies including Amazon.com, Wells Fargo, JPMorgan Chase and Northrop Grumman have faced similar claims in recent years, and the Trader Joe's case in May became the first to go to trial

  • The class action on behalf of more than 40,000 plan participants was filed last year

  • During the six-day bench trial, US District Judge William Young dismissed claims that Trader Joe's improperly used forfeited funds for its own benefit

  • Young on Monday said the money went back into the retirement plan, benefiting participants

  • The plaintiffs prevailed on a claim that Trader Joe's failed to take steps to minimize recordkeeping fees

  • Young awarded about $1.2 million in damages and interest, far below the more than $9 million sought in the lawsuit

The case is Stephan v. Trader Joe's Company, US District Court for the District of Massachusetts, No. 1:25-cv-10212.

For the plaintiffs: James Maro, James Wells and Mark Gyandoh of Capozzi Adler; Peter Muhic of Muhic Law

For Trader Joe's: Catalina Vergara, Deanna Rice and others from O'Melveny & Myers

Read more:

Amazon accused in lawsuit of mismanaging forfeited 401(k) funds

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