A judge has ordered Ford Motor Co. to start discussing settlement of a lawsuit filed on behalf of employees who had company stock as a retirement investment.
In a key ruling, U.S. District Judge Stephen Murphy allowed the 2006 lawsuit to go forward over Ford’s objections. Current and former nonunion workers say it was a mistake for Ford to offer company stock as an investment for retirement.
From April 2000 to April 2006, the stock fell approximately 70 percent. The lawsuit was filed under ERISA, a broad federal law that sets rules for pension and 401(k) plans and allows participants to sue over mismanagement.
“They had an obligation to protect the plan and its participants from unreasonable and entirely predictable losses,” the lawsuit says. Ford “failed to apprise participants of the myriad of systemic, internal and marketplace problems … which threatened the viability of the company.”
A similar lawsuit involving GM employees and company stock was settled this year for $37.5 million.
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