A fresh legal challenge has been launched against Amazon, accusing the retail giant of mishandling nearly $350 million in forfeited 401(k) funds. The claim, spearheaded by an employee, alleges the company prioritized its financial interests over its obligations to thousands of workers.
The lawsuit, filed in a Seattle federal court, asserts that Amazon misdirected unvested retirement contributions—funds forfeited by employees who left before completing three years of service—to offset its own matching obligations. Instead of using the funds to ease administrative costs for over 20,000 participants, as the suit suggests was appropriate, the company allegedly directed the money to reduce its own expenses.
At the heart of the case is the federal Employee Retirement Income Security Act (ERISA), which sets strict rules for managing employee benefit plans. The plaintiff, Cory Curtis, accuses Amazon of breaching its fiduciary duties under ERISA, including loyalty and prudence.
The timeline of the claims spans from 2018 to 2023, during which forfeited matching contributions amounted to nearly $349 million. Administrative fees for the 401(k) plan during this period exceeded $18 million. The lawsuit seeks a nationwide class action certification, demanding restitution for all losses incurred by the plan.
Amazon has yet to issue a public response to the allegations. The case’s outcome could have significant implications for how major corporations manage employee retirement plans.
