Employee's file lawsuits against Radio Shack for 401K retirement savings negligence

Three Radio Shack employees believe that top officials at the company breached their fiduciary duties to prudently handle the company's retirement fund.
By Ian Marsh | Nov 21, 2015
The U.S. Department of Labor has been investigating Radio Shack's handling of its 401(k) plans, according to a Dec. 27 Fort Worth Star-Telegram news report.

According to a filing with the Securities and Exchange Commission last week, the federal agency launched its probe of the plan's activities from 2011 to the present on Dec. 9 and conducted on-site interviews and reviewed documents the following week.

Radio Shack current or former employees Manoj Singh of Cypress, Calif, William A. Gerhart and Jeffrey Snyder of Florida, filed similar separate suits since Nov. 24 against their employer. On Dec. 19, each of employees' attorneys asked U.S. District Judge Reed O'Connor to consolidate the suits in Fort Worth, Tex.

In the original lawsuit filed by Singh on Nov. 24, it claims the embattled consumer electronics retailer, knowing how bad business had been going, should have known better than to allow employees to invest 401(k) retirement savings into company stock.

By so doing, and continuing to match employee contributions in RadioShack stock, the company's top officials breached their fiduciary duties to prudently handle the retirement fund, the suit alleges, and caused devastating losses in the retirement plans as the stock price fell from more than $13 a share in 2011 to below a dollar. It closed on Dec. 26 at 38 cents and is down 85 percent on the year.

The Fort Worth Star-Telegram reported that the filing notes show that RadioShack stock was removed as an active investment option in the 401(k) plans on Sept. 15. RadioShack hasn't filed a response to the allegations and its spokeswoman on Dec. 26 declined to comment.

---

Have something to say? Let us know in the comments section or send an email to the author. You can share ideas for stories by contacting us here.

Comments
Comments should take into account that readers may hold different opinions. With that in mind, please make sure comments are respectful, insightful, and remain focused on the article topic.