Wildman v. Am. Century Servs., LLC

• Decision Date: 27 February 2017
• Docket Number: No. 4:16–CV–00737–DGK,4:16–CV–00737–DGK
• Citation: 237 F.Supp.3d 918
• Parties: Steve WILDMAN and Jon Borcherding, individually and as representatives of a class of similarly situated persons, and on behalf of The American Century Retirement Plan, Plaintiffs, v. AMERICAN CENTURY SERVICES, LLC, The American Century Retirement Plan Retirement Committee, American Century Investment Management, Inc., American Century Companies, Inc., Christopher Bouffard, Bradley C. Cloverdyke, John A. Leis, Tina S. Ussery–Franklin, Margaret E. Van Wagoner, Gudrun S. Neumann, Julie A. Smith, Margie A. Morrison, Chat Cowherd, Diane Gallagher, and John Does 1–20, Defendants.
• Court: U.S. District Court — Western District of Missouri

237 F.Supp.3d 918

Steve WILDMAN and Jon Borcherding, individually and as representatives of a class of similarly situated persons, and on behalf of The American Century Retirement Plan, Plaintiffs,
v.
AMERICAN CENTURY SERVICES, LLC, The American Century Retirement Plan Retirement Committee, American Century Investment Management, Inc., American Century Companies, Inc., Christopher Bouffard, Bradley C. Cloverdyke, John A. Leis, Tina S. Ussery–Franklin, Margaret E. Van Wagoner, Gudrun S. Neumann, Julie A. Smith, Margie A. Morrison, Chat Cowherd, Diane Gallagher, and John Does 1–20, Defendants.

No. 4:16–CV–00737–DGK

United States District Court, W.D. Missouri, Western Division.

Signed February 27, 2017

237 F.Supp.3d 920

Michael F. Brady, Mark A. Kistler, Brady & Associates Law Office, Overland Park, KS, Kai H. Richter, Nichols Kaster PLLP, Carl F. Engstrom, Jacob T. Schutz, Minneapolis, MN, for Plaintiffs.

Samuel J. Rubin, W. Perry Brandt, Bryan Cave, LLP, Kansas City, MO, Alison V. Douglass, Dave Rosenberg, James O. Fleckner, Goodwin Procter LLP, Boston, MA, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

GREG KAYS, CHIEF JUDGE UNITED STATES DISTRICT COURT

This case involves claims for breach of fiduciary duty brought pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Plaintiffs Steve Wildman ("Wildman") and Jon Borcherding ("Borcherding"), participants in the American Century Retirement Plan (the "Plan") established by American Century Investment Management, Inc. ("ACIM"), bring this suit, on their own behalf, and on behalf of a proposed class of participants in the Plan, against Defendants American Century Services, LLC ("ACS"), the American Century Retirement Plan Retirement Committee (the "Committee"), ACIM, American Century Companies, Inc. ("American Century"), and past and present members of the Committee,¹ seeking damages and declaratory and injunctive relief. Plaintiffs claim Defendants breached their fiduciary duties and engaged in prohibited transactions in violation of ERISA. Defendants argue Plaintiffs are contractually barred from bringing this action because they signed a waiver releasing all claims against Defendants.

Now before the Court is Defendants' motion for summary judgment (Doc. 19). Finding Defendants have not shown they are entitled to judgment as a matter of law, summary judgment is GRANTED in part and DENIED in part.

Undisputed Material Facts²

A. Plaintiffs

Wildman is a former employee of American Century. He has a Bachelor of Science degree and a Master of Business Administration degree. The last position he held at American Century was information technology specialist. Wildman began participating in the Plan in 2005 and continues to participate. In 2008, Wildman was laid off and received a severance package that included a $17,300 payment, a prorated bonus,

237 F.Supp.3d 921

company-paid Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") benefits, and career transition services. In return, he signed an agreement waiving all claims against American Century. American Century gave Wildman forty-five (45) days to consider the terms of the agreement.

Borcherding is also a former employee of American Century. He has a Bachelor of Arts degree and a graduate degree in public administration. The last position he held at American Century was account services representative. Borcherding participated in the Plan from 1996 to 2012. In 2012, Borcherding was laid off and received a severance package that included a $13,824 payment, company-paid COBRA benefits, and career transition services. In return, he signed an agreement waiving all claims against American Century. American Century gave Borcherding twenty-one (21) days to consider the terms of the agreement.

B. Severance Agreements

Under the severance agreements ("Agreements"), Wildman and Borcherding agreed to release American Century and its subsidiaries from any claim of any kind that arose on or before the date of the agreement. The agreements are nearly identical. The relevant portion states:

In consideration of the receipt of the Severance Benefits ... I do hereby release and forever waive all rights I may have to assert claims or bring lawsuits against the Company and each of their respective officers, directors, and employees including, but not limited to:

all claims relating to my employment, the termination of my employment, salary, bonus or other compensation, sick leave, vacation pay, personal leave time or other benefits, including those claims based on a breach of an oral or written employment contract, whether such contract was express or implied;

all rights and claims that may be asserted under any city ordinance or state or federal law, including without limitation, those relating to employment discrimination or retaliation including, but not limited to, those claims under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, the Americans With Disabilities Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act of 1974, as amended, the Consolidated Omnibus Budget Reconciliation Act, 42 U.S.C. §§ 1981, 1983 and 1985, the Missouri Human Rights Act³ , the Missouri Service Letter Statute, Workers' Compensation Laws, and other similar federal, state, and local laws, ordinances or executive orders for the protection of employees against discrimination; and

...

1. I have carefully read this Agreement and that its contents have been fully explained to me;

...

4. I was advised by this Agreement of my right to consult advisors, including attorneys, about the contents of this Agreement;

5. After due consideration and consultation, I signed this Agreement voluntarily without duress;

6. By signing this Agreement I understand that I do not waive any rights or claims that may arise

237 F.Supp.3d 922

after the date the Agreement is executed[.]

Def.'s Br. Ex. 1 at 5–7, Ex. 3 at 24–26 (Doc 20–1) (emphasis added).

C. The Plan

The Plan is a defined contribution, "401k"⁴ plan that allows participants to contribute a percentage of their pre-tax earnings and invest their contributions in one or more investment options. Since 2010, the Plan's designated investment options are a limited selection of American Century mutual funds, American Century collective investment trusts, and American Century Companies Inc. Class C common stock.

Two Defendants have primary responsibility for administering the Plan, ACS, and the Committee. ACS administers the Plan by controlling and managing the operations of the Plan. The Committee administers the Plan by selecting and monitoring the investment options in the Plan.

Summary Judgment Standard

A moving party is entitled to summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed R. Civ. P. 56(a). A party who moves for summary judgment bears the burden of showing that there is no genuine issue of material fact. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Once the moving party has satisfied his or her initial burden, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts" in order to establish a genuine issue of fact sufficient to warrant trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

When considering a motion for summary judgment, a court must scrutinize the evidence in the light most favorable to the nonmoving party. Torgerson v. City of Rochester ,...