The Department of Labor (DOL) filed a lawsuit, Perez v. Sunkist Growers Inc., et al (civil action number: CV 13-7116-PA (MRWx)), alleging that from January 2006 to April 2011, the defendants used retirement plan assets to improperly reimburse the company for expenses including salaries and benefits for employees and managers working in various departments at Sunkist Growers.
An investigation by the DOL’s Employee Benefits Security Administration (EBSA) found the company was reimbursed by the plans based on projected expenses determined at the beginning of the year rather than on the actual expenses incurred, and no adjustments were made to repay the plans for the overpayments that were made.
The U.S. District Court for the Central District of California ruled Sunkist Growers Inc. and fiduciaries for the company’s retirement plans were required to restore $1,620,420 in losses to employee benefit plans under the terms of a consent judgment and order. The decision follows the EBSA’s investigation, which found the citrus farming cooperative, based in Sherman Oaks, California, and the plans’ fiduciaries mishandled employee retirement funds in violation of the Employee Retirement Income Security Act (ERISA).
The judgment permanently enjoins the fiduciaries from violating ERISA and requires the appointment of an independent fiduciary to review and approve any future services provided by Sunkist Growers to the plans.