Endeavor Law Founding Partner, Bonnie Treichel, was recently interviewed by InvestmentNews and asked to weigh in on litigation over the appropriate use of ESG in a 401(k). In the case, Plaintiff, Pilot Brian P. Spence alleges that American Airlines and its co-defendants “breached their fiduciary duties in violation of ERISA by investing millions of dollars of American Airlines employees’ retirement savings with investment managers and investment funds that pursue leftist political agendas through environmental, social and governance (‘ESG’) strategies, proxy voting, and shareholder activism—activities which fail to satisfy these fiduciaries’ statutory duties to maximize financial benefits in the sole interest of the Plan participants.”
According to Bonnie, however, the Defendants have pointed out “obvious deficiencies with the complaint,” such as the lack of investments by the plaintiff and the fact that the funds were in the only available through a brokerage window. “Keeping in mind that the duty with respect to the brokerage window is to prudently select and monitor the service provider for the window and not the underlying investments of the window, this seems like a tough one for the plaintiff,” Treichel said.
To learn more, read the entire article, available here.
The case is Spence v. American Airlines Inc., case number 4:23-cv-00552, in the U.S. District Court for the Northern District of Texas.