No-Poach Agreements and Workers’ Rights

Aug 24, 2026 | KLF Blog

Could a No-Poach Agreement Be Limiting Your Job Opportunities?

Workers benefit when employers compete to hire them. Agreements between businesses not to recruit, solicit, or hire one another’s workers can restrict job opportunities, reduce bargaining leverage, and potentially suppress wages, benefits, or working conditions.

Workers may not know that a no-poach agreement or hiring restriction exists. A restriction can appear in a franchise agreement, vendor or service contract, or an informal understanding between businesses. A worker may discover it only after being told that another location or company cannot hire them.

What No-Poach Agreements Can Mean for Workers

The January 2025 DOJ/FTC Antitrust Guidelines for Business Activities Affecting Workers explain how the agencies assess business practices affecting workers under the antitrust laws. The guidelines state that antitrust law protects competition for labor and that competition among employers can benefit workers through better wages, benefits, and other terms and conditions of work. The agencies also state that conduct harming competition for workers can lead to fewer job opportunities, lower wages, and worse job quality.

For no-poach conduct specifically, the guidelines state that businesses competing for workers may violate antitrust law if they agree not to recruit, solicit, or hire workers. The U.S. Department of Justice (“DOJ”) may bring felony criminal charges where appropriate, and the guidelines also note that such agreements may be subject to civil liability even when criminal charges are not pursued. The DOJ and FTC further state that such agreements can violate the antitrust laws whether they are informal or formal, written or unwritten, or spoken or unspoken.

The guidelines use “no-poach” to describe agreements between businesses not to hire, solicit, or otherwise compete for current, former, or potential workers. Their examples include an agreement requiring one company to obtain another company’s permission before trying to hire an employee. The agencies also state that an agreement not to “cold call” another company’s workers is a no-solicit agreement even if workers remain free to apply on their own.

The guidelines do not say that every hiring restriction is automatically unlawful. They explain that a restraint may require a fuller analysis when it is subordinate and collateral to a broader business collaboration, such as a joint venture, and is reasonably necessary to achieve that collaboration’s procompetitive potential. The legality of a particular restraint therefore depends on its facts and context.

For workers, the practical concern is reduced competition for their labor. A hiring restraint can limit opportunities to move between employers or locations and can affect the competition that ordinarily influences wages, benefits, and other terms of work.

The agencies also explain that businesses may compete for the same workers even when they sell different products or services. For antitrust analysis, the relevant question can be whether the businesses compete to hire or retain workers in the same labor market.

Warning Signs of a Possible No-Poach or No-Hire Restriction

  • A manager says another location or business is not allowed to hire you.
  • A transfer or job application is rejected because the businesses have an agreement, policy, or understanding about employees.
  • A prospective employer must obtain your current employer’s permission or pay a penalty before hiring you.
  • Recruiters are told not to contact employees of certain companies or franchise locations.
  • Workers hear similar explanations from separate businesses that otherwise compete for labor.

Franchise Workers Can Be Affected

The guidelines address franchise systems directly. They state that no-poach clauses in franchise agreements are subject to antitrust scrutiny and note that franchisors often compete with franchisees for workers. The guidelines further state that a franchisor may violate antitrust law by organizing or enforcing a no-poach agreement among franchisees that compete for workers, and that written or unwritten agreements among franchisees not to poach, hire, or solicit one another’s workers may violate federal or state law.

State law may provide additional protection. For example, Washington law prohibits a franchisor from restricting a franchisee from soliciting or hiring an employee of the franchisor or another franchisee of the same franchisor. State requirements vary.

Recent Enforcement and a Worker Case Example

Federal enforcement is not limited to franchise restaurants. In February 2026, the FTC finalized a consent order requiring building-services contractor Adamas and affiliated businesses to stop enforcing no-hire agreements that the FTC alleged restricted customers from hiring Adamas workers without a significant penalty.

In In re Papa John’s Employee and Franchisee Employee Antitrust Litigation, workers challenged franchise-agreement provisions that allegedly restricted hiring among Papa John’s locations.

Law360 reported on August 17, 2026, that a Kentucky federal court had granted final approval to a $5 million settlement. According to Law360, the settlement class covers workers employed at Papa John’s-branded restaurants in the United States from December 18, 2014 through December 31, 2021 who received more than $200 in compensation during that period.

The article also reported that Papa John’s agreed to prohibit the use of no-poach provisions in its franchise agreements for five years and that company executives would receive antitrust compliance training. The court observed that the settlement also provides “meaningful forward-looking protection.” The settlement is not a finding that Papa John’s violated the law; Papa John’s has denied the claims and has not admitted wrongdoing or liability.

What Workers Should Preserve

If you suspect a hiring restriction, preserve records lawfully. Useful materials may include job postings, applications, offers, rejection messages, transfer requests, emails or texts discussing hiring limits, pay records, and the names of managers or recruiters with relevant knowledge. Do not take trade secrets, customer information, or materials you are not authorized to possess.

Contact Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is available to evaluate potential claims involving no-poach, no-hire, wage-fixing, worker-mobility, and related antitrust practices. A confidential consultation can help a worker understand which laws may apply and whether filing deadlines may affect potential claims.

For a free, no-obligation legal evaluation, contact:

Michael Yarnoff, Esq.
(215) 792-6676, Ext. 804
[email protected]
[email protected]

About Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is a nationally recognized, plaintiff-side class action law firm representing investors, consumers, and workers in matters involving securities fraud, corporate misconduct, mergers and acquisitions, antitrust violations, whistleblower claims, data breaches, consumer fraud, employment law violations, and retirement-plan mismanagement. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.

All representation is provided on a contingency-fee basis, and plaintiffs are not responsible for attorneys’ fees, court costs, or litigation expenses. Any request for attorneys’ fees and expenses will be subject to court approval. 

 

 

 

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Security Guard Unpaid Wages & Break Rights

Aug 21, 2026 | KLF Blog

Security guard unpaid wages may arise when hourly guards perform required work before clocking in, after clocking out, during unpaid meal periods, or outside scheduled hours. Employers generally must record and pay for compensable work they require or permit, even when the work takes only a few minutes at a time.

When Security Guards May Be Working Off the Clock

Security work often includes responsibilities beyond the scheduled post. Depending on the facts and applicable law, compensable time may include:

  • Arriving early for required briefings, shift handoffs, equipment checks, or assignments.
  • Waiting to use an employer’s timekeeping system after required work has begun.
  • Answering work calls or text messages before a shift, after a shift, or on a day off.
  • Monitoring a radio or remaining available to respond during an unpaid meal period.
  • Working through paid rest periods or staying after a scheduled shift to complete reports or other duties.

All Compensable Time Can Affect Overtime

The U.S. Department of Labor’s off-the-clock guidance explains that covered, non-exempt employees generally must be paid for all time they are required or permitted to work. Under federal law, those employees generally must receive at least one and one-half times their regular rates for hours worked over 40 in a workweek. The DOL also provides guidance specifically for the security guard and maintenance-service industry.

Small amounts of unpaid time can add up. If omitted pre-shift, post-shift, call, or break time pushes total weekly hours above 40, the missing time may also affect overtime pay. Colorado law can provide additional overtime protection, including overtime after more than 12 hours in a workday or 12 consecutive hours, subject to applicable exemptions and rules.

Colorado Meal and Rest Period Rights

The Colorado Department of Labor and Employment states that most Colorado employees must receive meal periods and paid rest periods. Under the Colorado COMPS rules cited in the complaint discussed below, covered employees working more than five consecutive hours generally are entitled to an uninterrupted, duty-free meal period of at least 30 minutes. Covered employees also generally are entitled to a paid 10-minute rest period for each four-hour work segment or major fraction of four hours.

A meal period may be unpaid only if the employee is relieved of all duties. If a guard must carry and monitor a radio, answer calls, respond to incidents, or otherwise remain on duty, the period may be compensable depending on the facts. Workers should also be paid for required work performed during a rest period.

PalAmerican Security Guard Wages Class Action

On August 19, 2026, Agustin Lopez Herrera filed a proposed class action against PalAmerican Security, Inc. in the U.S. District Court for the District of Colorado. The case is Herrera v. PalAmerican Security, Inc., No. 1:26-cv-03811.

The complaint asserts claims under Colorado law only; it does not plead a nationwide FLSA collective action. The plaintiff alleges having worked as a non-exempt, hourly security guard in Aurora, Colorado since approximately October 2025. 

What the PalAmerican Complaint Alleges

According to the complaint, PalAmerican allegedly paid plaintiff and putative Class Members based only on their scheduled work hours and did not record or pay all time worked. The complaint alleges that:

  • Guards had to arrive approximately 20 to 30 minutes early, park in a designated lot, take a shuttle to the job site, and complete a handoff with outgoing security personnel.
  • Workers allegedly could not clock in until the scheduled start time and sometimes had to wait to use PalAmerican’s telephone timekeeping system.
  • PalAmerican allegedly called or texted workers about job matters while they were off the clock, several times a week, for approximately 10 minutes to one hour or more per occasion.
  • Workers allegedly had to carry and monitor employer-provided radios and respond during unpaid meal periods and attempted rest periods.
  • The complaint asserts that the alleged unrecorded time resulted in unpaid regular wages, minimum wages, and overtime under Colorado law.

Who the Complaint Seeks to Represent

The proposed class is defined as all current and former non-exempt, hourly employees of PalAmerican Security who worked in Colorado during the three years preceding the complaint’s filing through the conclusion of the litigation.

Review the PalAmerican Security Guard Wages Class Action Complaint.

Records Workers Should Preserve

Workers should consider preserving paystubs, timecards, schedules, timekeeping records, required-arrival instructions, shuttle information, post orders, shift-handoff requirements, call and text logs, and personal notes showing dates and estimated time spent on unpaid work. Keep records lawfully and do not take confidential or customer information you are not authorized to possess.

Security Guards: Contact Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is available to evaluate potential wage claims involving off-the-clock work, unpaid minimum wages, unpaid overtime, and interrupted meal or rest periods.

For a free, no-obligation legal evaluation, send us a message or contact:

Michael Yarnoff, Esq., (215) 792-6676, Ext. 804
[email protected]
[email protected]

About Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is a nationally recognized, plaintiff-side class action law firm representing investors and consumers in matters involving securities fraud, corporate misconduct, mergers and acquisitions, antitrust violations, whistleblower claims, data breaches, consumer fraud, employment law violations, and retirement-plan mismanagement. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.

Kehoe Law Firm’s class action legal services are provided on a contingency-fee basis, meaning clients are not responsible for attorneys’ fees or litigation expenses. Any request for attorneys’ fees and expenses may be subject to court approval.

 

 

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Personalized Pricing & Your Data

Aug 20, 2026 | KLF Blog

On August 19, 2026, the Federal Trade Commission (“FTC”) released a proposed enforcement policy statement addressing personalized pricing. The draft says that when consumers reasonably expect a non-personalized price, a business using personal data to set an individualized price should clearly and conspicuously disclose that the price is personalized, the basis for the personalization, and the types of data used.

The FTC’s proposed enforcement position is that failing to make those disclosures is likely to be unfair or deceptive under Section 5 of the FTC Act. The draft does not itself ban personalized pricing, is not a final rule, and is not a finding that any identified company violated the law.

What Is Personalized Pricing?

Personalized pricing occurs when a business uses data connected to a particular consumer to determine the price offered to that consumer. The FTC’s proposal focuses on markets in which consumers reasonably expect that people shopping at the same place and time will see the same price.

That is different from ordinary price changes that apply broadly because of supply and demand, regional taxes, market conditions, or characteristics intrinsic to the transaction. The proposal also recognizes that individualized pricing is an established feature of some markets, including credit and insurance, where price can depend on a consumer’s individual risk characteristics.

What Does the Draft Say Businesses Should Disclose?

The draft describes the FTC’s proposed approach to enforcing existing law; it does not create a new disclosure rule by itself. Under that approach, an effective disclosure should be clear and conspicuous and explain:

  • That the displayed price is personalized;
  • Why or on what basis the price was personalized; and
  • The types of personal data used to generate the price.

The FTC indicates that vague language—such as saying only that a consumer received a “specially selected” price—would likely be misleading if it omits important information. The FTC also states that collecting, using, or disclosing personal data for personalized pricing without adequate disclosure or consent may violate Section 5, and that using personal data without sufficiently verifying consent for that pricing purpose may also violate Section 5.

Examples Identified by the FTC

The proposed statement gives non-exhaustive, discussion-only examples of undisclosed personalized pricing that could raise Section 5 concerns, including a business charging more because data suggests that a consumer:

  • Cannot easily leave home to buy food or has children in the household;
  • Is traveling for a funeral or another can’t-miss personal obligation;
  • Does not have a rideshare competitor’s app installed;
  • Needs transportation to a medical facility for a serious emergency;
  • Recently experienced a crime and is shopping for home-security equipment; or
  • Is physically inside a retailer’s store or parking lot while browsing the retailer’s website.

Why the Proposal Matters to Consumers

A consumer who does not know that a price is personalized may be unable to comparison-shop effectively, correct inaccurate data, change the behavior triggering a higher price, limit future data collection, or decline the transaction. The FTC states that a higher concealed personalized price may constitute substantial injury that consumers cannot reasonably avoid.

For consumers, the proposal creates a practical investigation screen across online retail, grocery and food delivery, travel and lodging, rideshare services, ticketing, and other platforms using algorithmic pricing. Relevant questions include whether similarly situated consumers saw different prices, whether the difference was tied to personal data, what the business disclosed, and whether the consumer paid more as a result.

Limitations of the FTC’s Personalized Pricing Proposal

The FTC’s August 19 document is a proposed enforcement policy statement—not a ban on personalized pricing, a final policy statement, a rule, or an accusation against any particular business. The FTC states that Congress has not authorized it to prohibit personalized pricing outright; instead, the draft explains how undisclosed or misleading practices associated with personalized pricing may violate existing federal law.

The proposal remains subject to public comment, with a 30-day comment period beginning upon publication in the Federal Register, and the FTC may revise it following that process. Its examples are hypothetical and non-exhaustive, not findings of liability. Likewise, seeing different prices does not by itself establish that unlawful personalized pricing occurred.

Evaluating a potential matter would require examining whether personal data caused the difference, whether consumers reasonably expected a non-personalized price, what disclosures were made, whether the challenged price was paid, and what federal or state laws apply. The proposed statement expressly provides that it confers no rights, does not bind the FTC or the public, and would not relieve the FTC of proving a violation of an existing statute or regulation in any enforcement action.

Sources:

FTC Proposed Enforcement Policy Statement Regarding Personalized Pricing (PDF)

Associated Press: “FTC proposal would require retailers to be transparent about personalized pricing”

FTC press release: “FTC Seeks Comment on Enforcement Policy Statement Regarding Personalized Pricing”

About Kehoe Law Firm, P.C. 

Kehoe Law Firm, P.C. is a nationally recognized, plaintiff-side class action law firm representing investors and consumers in matters involving securities fraud, corporate misconduct, mergers and acquisitions, antitrust violations, whistleblower claims, data breaches, consumer fraud, employment law violations, and retirement-plan mismanagement. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.

All representation is provided on a contingency-fee basis, and plaintiffs are not responsible for attorneys’ fees, court costs, or litigation expenses. Any request for attorneys’ fees and expenses will be subject to court approval. 

 

 

 

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SEC Charges Former Tricolor Executives With Fraud

Aug 18, 2026 | KLF Blog

On August 18, 2026, the SEC announced it charged Daniel Chu (“Chu”), Jerome Kollar (“Kollar”), and Ameryn Seibold (“Seibold”), the former CEO, CFO, and Senior Director of Finance, respectively, at Texas-based Tricolor Holdings, LLC (“Tricolor”), for their roles in an alleged multi-year scheme to defraud investors by double pledging hundreds of millions of dollars of subprime auto loans to multiple asset-backed securities (“ABS”) offerings and lenders.

According to the SEC’s complaint, from at least 2020 through Tricolor’s bankruptcy in September 2025, Tricolor raised more than $1.9 billion through ABS offerings while Tricolor, Chu, and Kollar made numerous false and misleading representations to investors about the lender’s overall financial health, portraying the company as financially sound despite knowing that Tricolor was facing significant liquidity constraints and struggling to fund its operations.

In offering materials and meetings, Tricolor allegedly represented that the loans included in the ABS collateral pools were free and clear of any other liens when the defendants knew that many had been or would soon be double pledged. The complaint further alleges that the defendants deceived underwriters and investors, including by manipulating various loan metrics to make non-paying or defaulted loans appear current and therefore eligible for inclusion in the securitization pools. According to the complaint, more than $945 million of principal associated with the ABS offerings remained outstanding and payable to investors at the time of Tricolor’s bankruptcy.

The SEC’s complaint charges Chu, Kollar and Seibold with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The complaint also charges Chu with control person liability and all of the defendants with aiding and abetting liability. The complaint seeks injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties against all the defendants as well as officer and director bars against Chu and Kollar. 

The SEC stated that in a parallel action, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Chu, Kollar, and Seibold in December 2025. 

Source: SEC Press Release No. 2026-75 (August 14, 2026)

About Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is a nationally-recognized, plaintiff-side class action law firm representing investors and consumers in matters involving securities fraud, corporate misconduct, mergers and acquisitions, antitrust violations, whistleblower claims, data breaches, consumer fraud, employment law violations, and retirement-plan mismanagement. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.

All representation is provided on a contingency-fee basis, and plaintiffs are not responsible for attorneys’ fees, court costs, or litigation expenses. Any request for attorneys’ fees and expenses will be subject to court approval. 

 

 

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Staffing Agency Employees: Minimum Wage and Overtime Rights

Aug 18, 2026 | KLF Blog

Staffing agency and temporary employees are protected by wage laws even when one company issues the paycheck and another company directs the daily work. If the wrong minimum-wage rate is used, overtime is calculated incorrectly, or not all compensable time is recorded, the worker may be owed additional wages.

Responsibility does not always stop with the staffing agency named on the paystub. Depending on the facts, the staffing agency, the worksite company, or both may be responsible for complying with federal, state, and local wage laws.

Check the Wage Rate Where You Work

Minimum wage can depend on the location where the work is performed, the date, the employer’s size or classification, and whether an exemption applies. Workers should not assume that the rate listed in an offer letter or staffing-agency assignment remains lawful after a state or local increase.

Compare each pay period with the official wage rate for the place where you actually worked. If federal, state, and local wage laws apply, a covered worker generally must receive the highest applicable minimum. Some jurisdictions use different schedules for smaller employers or particular industries, so coverage and effective dates must be checked.

Overtime Must Use the Correct Regular Rate

Under the U.S. Department of Labor’s Fact Sheet #23, covered, nonexempt employees generally must receive at least one and one-half times their regular rate for hours worked over 40 in a workweek. Hours may not be averaged across two or more workweeks.

The regular rate cannot be lower than the applicable minimum wage and may include more than the stated hourly rate. The U.S. Department of Labor’s (“DOL”) Fact Sheet #56A on the regular rate explains that certain nondiscretionary bonuses, shift differentials, and other compensation may need to be included.

Staffing Agency or Worksite Company: Who Is Responsible?

The Fair Labor Standards Act (“FLSA”) uses a broad employment concept, and the DOL’s Fact Sheet #13 on the employment relationship explains that labels and technical arrangements do not determine whether a worker is an employee. The economic reality of the relationship controls.

A worker can have more than one employer under the FLSA. Whether a staffing agency and a worksite company are joint employers is a fact-specific legal question. Relevant facts can include who hires or can end the assignment, determines pay, controls schedules, directs the work, supervises performance, and maintains employment records. No single fact automatically decides every case.

The company that signs the timesheet or issues the paycheck is, therefore, not necessarily the only company whose conduct matters. Staffing employees should preserve information showing what each business actually did.

All Compensable Time Must Be Counted

The DOL’s Fact Sheet #22 on hours worked explains that covered employees generally must be paid for time they are required or permitted to work. Depending on the facts, this may include work before clocking in, work after clocking out, required training, or time spent completing assignment-related tasks.

A rule requiring advance authorization for overtime generally does not erase the obligation to pay for compensable overtime that the employer knew or had reason to know was worked, although an employer may separately enforce a workplace rule against unauthorized overtime.

Staffing Agency Wage Case Example: Workbridge Workers at Misfits Market

In Gonzalez v. Imperfect Foods, Inc. d/b/a Misfits Market, et al., No. 1:26-cv-03229-JRR (D. Md.), plaintiff Rodrigo Gonzalez (“Gonzalez”) alleges that he sought employment through staffing agency Workbridge LLC and was assigned to work as a stocker at a Misfits Market warehouse in Hanover, Maryland. According to the complaint, Gonzalez and other workers supplied by Workbridge worked at the warehouse under the supervision of both Workbridge and Misfits personnel. Gonzalez allegedly worked there from approximately April 2024 through April 2025 and frequently worked more than 40 hours per week.

The complaint alleges that these staffing-agency workers were not paid the wage rates required after Howard County increased its minimum wage for employers with 15 or more employees to $16 per hour on January 1, 2025. According to the complaint, Workbridge continued paying Gonzalez and other Workbridge-supplied warehouse workers $15 per hour for regular hours and $22.50 per hour for overtime. The allegedly required rates were at least $16 and $24, respectively—an asserted shortfall of $1 for each regular hour and $1.50 for each overtime hour. The complaint also alleges that workers employed directly by Misfits who performed similar work received at least $16 per hour.

The lawsuit alleges that Workbridge hired and paid the staffing-agency workers and typically set their schedules, while both Workbridge and Misfits tracked their time, supervised their work and had authority to terminate them. Based on these allegations, Gonzalez claims that Workbridge and the Misfits defendants jointly employed the Workbridge-supplied workers at the warehouse.

Gonzalez seeks to represent a proposed FLSA collective of individuals who performed work for Workbridge in Howard County and allegedly were not paid the required overtime rate beginning January 1, 2025. He also seeks to represent a proposed Maryland class of Workbridge workers in Howard County who allegedly were denied the applicable minimum wage or overtime rate during that period. The complaint estimates that at least 70 Workbridge workers in Howard County were affected. 

Signs a Staffing Agency Employee May Be Underpaid

  • Your pay rate did not change after a state or local minimum-wage increase.
  • Your overtime rate is based on an hourly rate below the applicable minimum.
  • Agency workers receive less than direct employees performing similar work at the same site.
  • The staffing agency issues your paycheck, but the worksite company controls your schedule, duties, supervision, or continued assignment.
  • Your paystub or time records do not allow you to verify regular hours, overtime hours, and rates.

Records Workers Should Preserve

  • Paystubs, wage statements, timecards, schedules, and payroll-app records.
  • Offer letters, assignment notices, wage-rate notices, and messages about pay.
  • Notes showing the dates, locations, hours, and rates worked, including overtime.
  • Communications showing who assigned work, set schedules, supervised duties, or handled discipline.

Keep records lawfully and do not take confidential information or materials you are not authorized to possess. The DOL’s Fact Sheet #21 on FLSA recordkeeping describes records covered employers must maintain, including daily and weekly hours, the basis of pay, regular hourly rate, straight-time and overtime earnings, deductions, total wages, and the pay period covered. A worker’s own contemporaneous records may still be useful.

Can an Employer Retaliate?

The FLSA prohibits retaliation against an employee for filing a complaint or cooperating in an investigation. Other protected wage complaints may also be covered. Document any threats, reduced hours, discipline, termination, or other adverse action and seek advice promptly, because filing deadlines apply.

Contact Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is available to evaluate potential claims involving staffing-agency employment, joint-employer responsibility, unpaid minimum wages, unpaid overtime and employee misclassification. A confidential consultation can help you understand how federal, state or local wage laws may apply to your staffing assignment and whether the staffing agency, worksite company or both may be responsible.

For a free, no-obligation legal evaluation, contact:

Michael Yarnoff, Esq.
(215) 792-6676, Ext. 804
[email protected]
[email protected]

About Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is a nationally recognized, plaintiff-side class action law firm representing investors and consumers in matters involving securities fraud, corporate misconduct, mergers and acquisitions, antitrust violations, whistleblower claims, data breaches, consumer fraud, employment law violations, and retirement-plan mismanagement. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.

All representation is provided on a contingency-fee basis, and plaintiffs are not responsible for attorneys’ fees, court costs, or litigation expenses. Any request for attorneys’ fees and expenses will be subject to court approval. 

 

 

 

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401(k) Target-Date Funds and ERISA Fiduciary Duties

Aug 18, 2026 | KLF Blog

The Eleventh Circuit reversed the district court’s grant of summary judgment to Royal Caribbean and remanded an ERISA class action challenging target-date funds offered in the Royal Caribbean Cruises Ltd. Retirement Savings Plan.

In a decision filed on August 17, 2026, the Eleventh Circuit Court of Appeals held that a retirement-plan participant does not always need an identical, “apples-to-apples” investment comparison to show that a challenged investment was objectively imprudent. The decision may be significant for 401(k) participants concerned about target-date fund fees, performance, risk, asset allocation, or fiduciary monitoring.

The decision did not find that Royal Caribbean breached ERISA or that the Russell target-date funds were imprudent. The court expressly made no determination about whether summary judgment is warranted under the correct standard and remanded the case for further proceedings.

What Did the Eleventh Circuit Decide?

Ann Johnson (“Johnson”), representing a certified class of similarly situated participants, alleged that Royal Caribbean breached ERISA’s duty of prudence in connection with Russell target-date funds added to the plan. The plan replaced Vanguard target-date funds with Russell funds in 2015 and replaced the Russell funds with American Funds target-date funds in 2019.

Johnson pointed to several categories of evidence. According to the appellate record, the Russell funds had relatively few clients, and an allegedly similar Russell retail target-date series had received a negative Morningstar rating. Johnson also relied on evidence concerning the funds’ fees, performance, glide path, asset allocation, and internal communications about performance and cost.

Royal Caribbean responded that the Vanguard and American Funds target-date series were not suitable apples-to-apples comparisons, because the funds used different strategies, glide paths, asset allocations, and risk profiles.

The Eleventh Circuit did not decide which side was correct. It held that the district court should consider the full record rather than requiring an identical comparator and excluding the other evidence.

Why the Decision Matters

The district court treated an apples-to-apples comparator as mandatory and declined to consider other evidence of alleged objective imprudence. The Eleventh Circuit rejected that approach.

The appellate court explained that a participant may use appropriate comparisons, but an identical comparator is not required in every case. Qualitative evidence—such as industry ratings or whether comparable plans widely use a fund—may also be relevant. When a participant relies on quantitative comparisons of fees or performance, however, the analysis must account for differences in risk, strategy, asset allocation, and investment objectives.

What Should 401(k) Participants Review?

Target-date funds with the same retirement year can have materially different fees, risks, holdings, and glide paths.

Participants with concerns may want to review:

  • Annual fee disclosures, quarterly account statements, and the plan’s investment comparison chart;
  • The target-date fund’s expense ratio, underlying-fund fees, glide path, and asset allocation;
  • Performance against an appropriate benchmark over a meaningful period; and
  • Notices showing when the plan added, removed, or replaced investment options or managers.

Questions About Your Retirement Plan?

Investment losses or underperformance alone do not establish an ERISA violation. Questions may arise, however, when substantial retirement savings were allegedly affected by excessive fees, imprudent investments, inadequate monitoring, conflicts of interest, missing contributions, incorrect benefit calculations, or denied benefits.

Kehoe Law Firm, P.C. reviews potential claims involving 401(k), 403(b), pension, and other employee benefit plans. Participants and beneficiaries may submit a confidential inquiry at no cost or obligation.

Contact Kehoe Law Firm, P.C. 

Michael Yarnoff, Esq.
(215) 792-6676, Ext. 804
[email protected]
[email protected]

About Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is a nationally recognized, plaintiff-side class action law firm representing investors and consumers in matters involving securities fraud, corporate misconduct, mergers and acquisitions, antitrust violations, whistleblower claims, data breaches, consumer fraud, employment law violations, and retirement-plan mismanagement. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.

All representation is provided on a contingency-fee basis, and plaintiffs are not responsible for attorneys’ fees, court costs, or litigation expenses. Any request for attorneys’ fees and expenses will be subject to court approval. 

 

 

 

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