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Motion Seeks to Hold Alight Liable for Theft of 401(k) Assets
Plaintiff Paula Disberry has requested the court order restoration of her $750,000 in lost assets.
Attorneys for Paula Disberry moved for a federal court to hold Alight Solutions liable for negligence in its administration of the defined contribution plan for the Colgate-Palmolive Co.; end Disberry’s lawsuit without a trial; and restore $750,000 in retirement account funds stolen by unknown parties.
Arguing there are no facts in dispute and that a judgment should be entered, Disberry’s attorneys last week filed a motion for summary judgment that contends security protections by the defendants—Alight Solutions and the Employee Relations Committee of the Colgate-Palmolive Co.—were insufficient to safeguard retirement plan participants’ assets, according to documents filed November 8.
Alight, which provided recordkeeping and administrative services to the plan, owed a duty of care to all participants under the Employee Retirement Income Security Act and breached that duty, the motion argued.
“Even if the Court were to determine that Alight is not a fiduciary, Alight is liable to Plaintiff because it owes a duty of care to all Plan participants, including Ms. Disberry, as intended third-party beneficiaries of its agreement to provide services to the Plan; and it breached its duty of care for all of the factual reasons discussed,” the motion stated.
The motion asked the court to rule in Disberry’s favor, order the defendants to restore to the plan her lost benefit amount plus lost investment earnings since March 2020 and allocate the funds to Disberry’s plan account.
Attorneys wrote that fraudsters’ theft of Disberry’s retirement plan benefit is a tangled tale that involved multiple attempts to access her assets, such that Alight Solutions “ignored multiple red flags,” allowing the theft to occur.
“Defendants breached their ERISA fiduciary duties by failing to implement appropriate protections to safeguard the Plan against fraud or theft,” attorneys wrote. “Alight also was aware of its vulnerabilities given its history of multiple thefts from retirement plans that used its services on its common platforms with common security protocols.”
The employee relations committee of the Colgate-Palmolive Co. sought to remove the plan sponsor from the litigation by blaming Alight Solutions for the breach in a motion for summary Judgement last month.
The case, Disberry v. Employee Relations Committee of the Colgate-Palmolive Co. et al., is being adjudicated in the U.S. District Court for the Southern District of New York. The original complaint included the Bank of New York Mellon Corp., which mailed a check for Disberry’s balance to a fraudulent address in September 2020, but its motion to dismiss the claim, on the basis it did not act as a fiduciary for the plan, was granted in December 2022.
Disberry is represented by the law offices of Renaker Scott LLP and the law offices of Brustein Law PLLC. The defendants are represented by attorneys with Groom Law Group and Jenner & Block LLP.
Representatives for neither Alight Solutions nor Disberry retuned requests for comment.