Judge Denied Motion to Dismiss Justworks Lawsuit
A Chicago federal judge allowed fiduciary duty claims against Justworks Employment Group to proceed to further litigation.
Updated on Oct. 13, 2026 in Retirement Planning
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Judge Jeremy C. Daniel of the US District Court for the Northern District of Illinois has denied a motion to dismiss allegations that Justworks Employment Group LLC engaged in self-dealing. The complaint involves claims that the company authorized its 401(k) plan to pay nearly $1 million to itself or an affiliate in 2024.
Why it matters
The ruling allows litigation to proceed regarding whether the company violated fiduciary loyalty rules under the Employee Retirement Income Security Act. These allegations suggest potential conflicts of interest within the management of employee retirement assets.
The lawsuit centers on a nearly $1 million payment authorized from the 401(k) plan to Justworks or an affiliate during 2024. While the court allowed self-dealing claims to move forward, it granted the dismissal of claims regarding administrative fee levels.
The players
Jeremy C. Daniel
He is a judge presiding in the US District Court for the Northern District of Illinois who issued the opinion on the motion to dismiss.
Justworks Employment Group LLC
It is a company facing allegations of fiduciary disloyalty and prohibited transactions concerning its 401(k) plan.
The details
The court evaluated whether the complaint plausibly stated that the company breached its fiduciary duties through prohibited transactions. While the court rejected the portion of the challenge regarding administrative fees, the self-dealing allegations were found sufficient to survive the motion to dismiss.
Timeline
In 2024, Justworks authorized a $1 million payment from its 401(k) plan.
On October 12, 2026, Judge Jeremy C. Daniel issued the opinion regarding the dismissal motion.
Market Dynamics
The court examined the fiduciary obligations established by the Employee Retirement Income Security Act to determine if the self-dealing claims could proceed. This ruling underscores the ongoing scrutiny of how service providers manage retirement plan assets and potential conflicts of interest.
This litigation serves as a reminder for retirement plan participants to monitor their plan disclosures for unexplained transfers or potential conflicts. It highlights the importance of understanding how administrative entities manage plan assets to ensure personal retirement savings remain protected.
The takeaway
Plan participants should regularly review their 401(k) statements to identify any unusual transactions or payments. Understanding the fiduciary responsibilities of your plan administrator is essential for safeguarding long-term retirement assets.
Further reading
For more information on the standards governing these claims, visit the Retirement Planning section.
Source note: This article includes information reported by Bloomberglaw.
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