Husch Blackwell Sued for Alleged 401(k) Self-Dealing

An attorney and former employee of law firm Husch Blackwell LLP sued the firm and members of its executive board in federal court this week, claiming the employer violated its fiduciary duties under the Employee Retirement Income Security Act, specifically by self-dealing and other breaches.

Plaintiff Tyler Paetkau, a former Husch employee who participated in the Husch Blackwell 401(k) Plan when the alleged breaches occurred, brought the suit, Paetkau v. Husch Blackwell LLP et al., in U.S. District Court for the Western District of Missouri on behalf of the plan and its approximately 400 affected participants. Sanford Heisler Sharp McKnight LLP and Fell Law P.C. represent the plaintiff.

The complaint proposes a class consisting of plan participants and beneficiaries employed by Husch Blackwell since September 16, 2019. According to the complaint, Husch Blackwell withheld funds from employee paychecks for the purpose of contributing those funds to employees’ accounts in the plan. However, the firm did not send all contributions to the plan in a timely manner as required by ERISA, the complaint argues.

“Instead, the Husch Blackwell defendants kept these contributions for months at a time and, according to the firm’s benefits personnel, used them to pay the firm’s operating expenses,” the complaint alleges.

The complaint also claims that Husch Blackwell’s actions created a “sizable pool of assets” inaccessible to the plan, its participants and beneficiaries, depriving them of opportunities to seek a return on their retirement fund investments.

Through these actions, Husch Blackwell violated ERISA’s anti-inurement provision, breached ERISA’s fiduciary duties of prudence and loyalty, and engaged in “prohibited transactions” barred by ERISA, according to the complaint.

“Employees should be able to trust that when their employer withholds retirement plan contributions from their paycheck, those funds will go directly to their retirement savings, not into the employer’s pocket,” said Charles Field, Sanford Heisler’s co-vice chairman and counsel for the proposed class, in a statement. “To divert employees’ retirement plan contributions to pay for operating expenses is a total betrayal of that trust.”

Husch Blackwell did not immediately respond to a request for comment.

The Husch Blackwell 401(k) Plan held nearly $659.2 million in assets with 2,011 plan participants in 2024, according to its most recent Form 5500.