Bath & Body Works Parent Strikes Excessive Fee Suit Settlement

L Brands, parent company of Bath & Body Works has come to terms with the plaintiffs in a 401(k) excessive fee suit. 

The suit—which had been filed in late 2020 by Shepherd, Finkelman, Miller & Shah LLP and Goldenberg Schneider LPA on behalf of participants in the $1.5 billion plan—had alleged that the plan’s administrative fees were at least 60% higher than those paid by ostensibly comparably sized plans—and that the plan fiduciaries had conducted “virtually no examination, comparison, or benchmarking” to ensure those fees were reasonable. And that they had also failed to offer the least expensive share class for some of the investment options in the plan.

The settlement struck—following private mediation—was for $2,750,000 in cash, which the parties claim is “fair, reasonable, and adequate, taking into account the costs, risks, and delay of litigation, trial, and appeal.”

The settlement (Allison v. L Brands, Inc., S.D. Ohio, No. 2:20-cv-06018, settlement approval motion 8/11/22) also calls for a Case Contribution Award for the named plaintiff Donna Allison “not to exceed the amount of $8,750, subject to Court approval,” as well as a Motion for Attorneys’ Fees and Expenses “…not to exceed 33 1/3% of the Settlement Amount, plus reasonable litigation expenses advanced and carried by Class Counsel for the duration of the Action, not to exceed $50,000.”

Oh—and the fiduciary defendants agree to conduct a request for proposal regarding the provision of recordkeeping services for the plan within three years following the effective date. Additionally, the plan’s Administrative Committee is to review and evaluate the plan’s investment policy statement within three years following the effective date.

The settlement is subject to approval by Judge Edmund A. Sargus Jr., who allowed the case to proceed over the defendant’s motion to dismiss last year—finding not only that Allison’s status as a FORMER participant did not preclude standing to bring suit (as she was still a beneficiary of the plan), but that a release she had signed with the company applied only to her employment.