Whole Foods Market has agreed to settle a class-action lawsuit that alleged the company failed to prudently manage the administrative fees of its $1.9 billion 401(k) plan, resulting in millions in losses for employees.
The lawsuit, filed in 2023 by former employees under the case name: Winkelman v. Whole Foods Market, Inc., accused the Amazon-owned grocery chain of breaching its fiduciary duties under the Employee Retirement Income Security Act (ERISA).
Specifically, the plaintiffs claimed that Whole Foods allowed excessive recordkeeping fees charged by Fidelity Investments, the plan’s recordkeeper, between 2016 and 2020. These fees reportedly ranged from $31 to $34 per participant annually, which the plaintiffs argued were significantly higher than those charged by comparable plans at companies like Apple, Costco, Lowe’s, Google, and Macy’s, where fees ranged from $8 to $23 per participant.
The plaintiffs contended that given the size of Whole Foods’ 401(k) plan—classified as a “jumbo” plan due to its substantial assets and participant count—the company had significant bargaining power to negotiate lower fees but failed to do so. They asserted that this oversight constituted a breach of the company’s fiduciary responsibilities to plan participants.
After a private mediation session, both parties reached an agreement to settle the lawsuit. While the specific terms of the settlement have not been disclosed to the public, the parties plan to file details for court approval by mid-June 2025.
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