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Worker Lawsuit Over Ford Stock to Go Forward

December 29, 2008

A judge has ordered Ford Motor Co. to start discussing settlement of a lawsuit filed on behalf of employees who had company stock as a retirement investment. In a key ruling last week, U.S. District Judge Stephen Murphy allowed the 2006 lawsuit to go forward over Ford’s objections. Current and former nonunion workers say it was a mistake for Ford to offer company stock as an investment for retirement. From April 2000 to April 2006, the stock fell approximately 70 percent and now trades under $2.20.

 

“A stock can be imprudently risky for an employee savings plan even in the absence of fraud or imminent collapse,” Murphy said.The lawsuit was filed under ERISA, a broad federal law that sets rules for pension and 401(k) plans and allows participants to sue over mismanagement.

 

The lawsuit says Ford’s stock was an investment option, and a company match, during a volatile period for the automaker: the messy spinoff of parts-maker Visteon, rising pension and health care costs and a drop in market share. “They had an obligation to protect the plan and its participants from unreasonable and entirely predictable losses,” the lawsuit says.

 

Read Article: Law.com

 

Posted By: Phoenix DUI Attorney

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