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Litigation Services > Synopsis of Litigation Cases > Class* Vs. Manufacturer (Federal NY) |
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A class action of employees of a major company acquired by another major company, many of the employees were released or offered lesser positions in the new company. On discovery, a great deal of the stock of the former company was in the hands of employees through their 401(k) plans. The amount of stock was sufficient to swing the approval or disapproval of the acquisition. Employees were not given an opportunity to vote on the acquisition, but instead the trustees voted all of the shares for them, swinging the deal. On further discovery, those employees all remained with the new company at higher levels of pay and title, while the others were dismissed or diminished in their jobs. The courts ruled that the trustees had no right to vote the stock without asking. The consultant also was asked to calculate damages to the acquired employees in the class. Lesson: be careful how you treat employee right in their 401(k) plans.
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