U.S. Supreme Court revives case against NU’s retirement plan


Daily file photo by Isabelle Sarraf

The Supreme Court building in Washington, D.C. The U.S. Supreme Court revived a lawsuit against Northwestern Monday involving the University’s retirement plan.

Isabel Funk and Laya Neelakandan

The U.S. Supreme Court revived a proposed class action Monday from Northwestern workers who claim the University violated federal law in its retirement plan.

NU workers accused the University of placing high fees and poor investments on their retirement plan in the case originally filed in August 2016. More than 20 top universities have faced similar suits in recent years, culminating in settlements of millions of dollars. 

NU’s Employee Retirement Income Security Act case was dismissed in May 2020 by a Seventh Circuit court that ruled in favor of the University, saying the workers could choose their investments. In a unanimous decision, the Supreme Court determined this did not prevent the claim.

“The Seventh Circuit erred in relying on the participants’ ultimate choice over their investments to excuse allegedly imprudent decisions by respondents,” Justice Sonia Sotomayor wrote in the ruling. 

In the decision, Sotomayor said the Seventh Circuit should have considered the University’s responsibility to oversee all plan investments and remove those with high fees or underperformance.

“While we are disappointed the U.S. Supreme Court disagreed with the reasoning adopted by the Seventh Circuit, we are pleased that the court has asked the Seventh Circuit to reconsider whether plaintiffs’ allegations fail to state a claim,” University spokesperson Jon Yates said in a statement.

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