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Tuesday, April 16, 2013

Ind. Decisions - 7th Circuit decides four Indiana cases today (3 are consolidated)

In RENEE S. MAJORS v. GENERAL ELECTRIC COMPANY (SD Ind., McKinney), a 25-page opinion, Judge Robert L. Miller, Jr. of the Northern District of Indiana, sitting by designation, writes:

Renee S. Majors, a long-time employee at General Electric Company’s Bloomington, Indiana plant, filed suit alleging that GE violated the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., and Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., when it denied her temporary and permanent positions to which she was otherwise entitled under the seniority-based bidding procedure the plant used to fill vacant positions. Ms. Majors also alleged that GE retaliated against her, in violation of Title VII, for filing Equal Employment Opportunity Commission charges of discrimination when she was denied overtime hours and the opportunity to work “lack of work” Fridays, and that GE constructively discharged her when she elected to retire. The district court granted GE summary judgment on all claims. Ms. Majors appeals that decision with the exception of her Title VII discrimination claim. We affirm.
In ROBERT LEIMKUEHLER, as trustee of and on behalf of the LEIMKUEHLER, INC. PROFIT SHARING PLAN, and on behalf of all others similarly situated v. AMERICAN UNITED LIFE INSURANCE CO. (SD Ind., Magnus-Stinson), a 20-page opinion, Judge Wood writes:
This case presents a challenge to the practice known in the 401(k) services industry as “revenue sharing”—an arrangement allowing mutual funds to share a portion of the fees that they collect from investors with entities that provide services to the mutual funds, the investors, or both. Although the practice has been commonplace for years, until quite recently it was opaque to both individual investors and many 401(k) plan sponsors. As the existence and extent of revenue sharing has become more widely known, some have expressed concern that the practice unduly benefits mutual funds and 401(k) service providers to the detriment of plan participants. This concern has fueled a number of lawsuits alleging that the practice violates the Employee Retirement Income Security Act of 1974 (ERISA). This is one such suit.

The district court awarded summary judgment to the defendant, American United Life Insurance Company (AUL), which is an Indiana-based insurance company that offers investment, record-keeping, and other administrative services to 401(k) plans. The court ruled that AUL was not a fiduciary of the Leimkuehler, Inc. Profit Sharing Plan (the Plan) with respect to AUL’s revenue-sharing practices. The Plan and Robert Leimkuehler, its Trustee, have appealed. Although very little about the mutual fund industry or the management of 401(k) plans can plausibly be described as transparent, we agree with the district court that AUL is not acting as a fiduciary for purposes of 29 U.S.C. § 1002(21)(A) when it makes decisions about, or engages in, revenue sharing. We find it unnecessary to express any view on the question whether revenue sharing yields net benefits to individual 401(k) investors, and we thus affirm the district court.

Posted by Marcia Oddi on April 16, 2013 01:39 PM
Posted to Ind. (7th Cir.) Decisions