Ford Motor Co. ERISA Litigation
On February 15, 2011, the Honorable Stephen J. Murphy, III granted final approval of the Stipulation and Agreement of Settlement (“Settlement Agreement”).
Case History:
The Consolidated Complaint in the ERISA litigation was filed in the United States District Court Eastern District of Michigan, Southern Division, on behalf of all persons who were participants in or beneficiaries of the following Ford-sponsored, defined-contribution plans (collectively, the “Plans”): (1) the Ford Motor Co. Savings and Stock Investment Plan for Salaried Employees, and (2) the Ford Motor Co. Tax Efficient Savings Plan for Hourly Employees between April 15, 2000 and August 27, 2010 ("Class Period") and whose accounts included investments in Ford Motor Co. common stock.
Plaintiffs allege that during the Class Period, Defendants breached their fiduciary duties to Plaintiffs and Class members by:
- failing to prudently and loyally manage the Plans’ assets;
- failing to monitor fiduciaries; and
- co-fiduciary liability.
On December 22, 2008, Judge Murphy issued an order in which he denied Defendants’ Motion to Dismiss Plaintiffs’ Consolidated Complaint. The Order allowed Plaintiffs to pursue their claims against Defendants.
The Settlement:
Under the Settlement Agreement, Ford has agreed to implement remedial provisions to enhance the ability of Class Members to save for retirement. Specifically, for a period of four years following final approval of the Settlement, Ford will make online financial advice tools or material available to Class Members, enhance participant communications to Active Participants, and arrange third-party fiduciary training for Ford’s Investment Committee and Investment Process Committee. Ford will also, within ninety days of the Effective Date of Settlement, provide a notice to Active Participants whose Plan investment in Ford stock at that time exceeds 20% of their total Plan holdings concerning the importance of maintaining diversified investments. Additionally, if Ford elects in its discretion to offer an employee match under the Ford Motor Company Savings and Stock Investment Plan (“SSIP”) during the three-year period following the Final Approval of Settlement such a match will be (a) provided in cash; and (b) invested in any applicable investment option under the SSIP designated by the participant or, if no investment option has been designated, then in the applicable default investment option. The Court has approved the following Settlement Class:
(a) all current and former participants and beneficiaries of the Plans whose individual Plan account(s) included investments in Ford stock at any time during the Class Period and; (b) as to each Person within the scope of subsection (a) of this paragraph, his, her or its beneficiaries, alternate payees (including spouses of deceased Persons who were participants of the Plans), Representatives and Successors-In-Interest, provided, however, that the Class shall not include any Defendant or any of their Immediate Family, beneficiaries, alternate payees (including spouses of deceased Persons who were Plan participants), Representatives or Successors-In-Interest, except for spouses and Immediate Family members who themselves are or were participants in the Plans, who shall be considered members of the Class with respect to their own Plan accounts.
The Court held a Fairness Hearing on February 15, 2011, and approved Named Plaintiffs’ requests for final approval of the Settlement, for class certification, for an award of attorneys’ fees and expenses, and for case contribution awards to Named Plaintiffs.
Case and Settlement Documents
Additional information regarding the Settlement was provided in: (1) the Court-approved Class Notice, which was mailed to Class Members; (2) the Court-approved Publication Notice, which was published in USA Today and the Detroit Free Press and by electronic publication on the Business Wire; and (3) the website established by the notice administrator