9th Cir. AT&T Ruling ‘Watershed Moment’ for Benefit Contractors

A circuit court ruling reviving a class action targeting AT&T Inc.‘s 401(k) plan could leave employers exercising more caution in the way they interact with and oversee third-party service providers that deliver workplace benefits.

The US Court of Appeals for the Ninth Circuit Aug. 4 reversed a lower court’s summary judgment ruling for AT&T, finding the company had entered into prohibited transactions under federal benefit law by amending existing recordkeeping contracts to add brokerage and investment advisory services.

By remanding to the district court an analysis of whether AT&T qualified for an exception to the law, the Ninth Circuit ...