SCOTUS accepts IBM case that could curb employee stock lawsuits
The lawsuit claims IBM didn’t do enough to protect employees from stock losses from a money-losing chip manufacturing unit.
The U.S. Supreme Court will use a case involving International Business Machines Corp. to consider making it harder for workers to sue when their retirement plans lose money because the employer’s stock price falls.
The justices said they will scrutinize a lawsuit that claims IBM plan managers didn’t do enough to protect employees from stock losses stemming from a money-losing chip manufacturing unit. The company agreed in 2014 to pay GlobalFoundries Inc. $1.5 billion to take the unit, triggering a $12.95 one-day drop in IBM shares.
A New York-based federal appeals court let the lawsuit go forward.
IBM officials contend in their appeal that the suing employees needed to be more specific in their lawsuit about how administrators could have shielded the plan from the stock drop.
The case is Retirement Plans Committee of IBM v. Jander, 18-1165.
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