80/20 Inc ESOP $7 Million Settlement for Improper Termination Payments

80/20 Inc. sponsors an employee stock ownership plan (ESOP), a retirement vehicle designed to hold company stock for employees and distribute benefits according to plan rules. When the company terminated the ESOP, some participants received “termination distributions,” but a class action lawsuit alleged that the ESOP was administered and terminated improperly—specifically claiming violations of the Employee Retirement Income Security Act of 1974 (ERISA), the main U.S. law that governs how employer-sponsored retirement plans are managed, documented, and paid out. The settlement notice says there are 328 eligible class members identified from plan records, including beneficiaries or alternate payees (for example, people entitled under a qualified domestic relations order) tied to participants who received termination distributions. The lawsuit was filed to challenge how plan administrators handled the termination payments and to recover damages for affected participants; its significance is that it resolves those allegations through a defined $7,000,000 settlement fund. After court-approved deductions for attorneys’ fees, administration, expenses, and service awards for class representatives, the remaining “net settlement” will be divided pro rata—meaning each class member’s payout depends on the size of the termination distribution they received compared with others. Importantly, eligible people generally do not need to file a claim because checks will be mailed to last known addresses, though participants can also select options like a direct rollover to an IRA/qualified plan or an electronic funds transfer, reflecting how settlements involving retirement plan assets often intersect with federal tax handling and ERISA’s protective framework. Similar ESOP and other ERISA-related class actions have broader implications for employers and plan fiduciaries: they underscore that, during major plan events like termination or payout, administrators must follow ERISA’s fiduciary and procedural requirements or face collective claims that can result in costly settlements and corrective oversight.