Judge Denied Motion to Dismiss Justworks Lawsuit
Chicago area retirement savers may see case impacts as fiduciary claims move forward in the US District Court.
Updated on Oct. 13, 2026 in Retirement Planning
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A federal judge has allowed a lawsuit alleging fiduciary disloyalty and self-dealing against Justworks Employment Group LLC to proceed. The case centers on claims regarding unauthorized payments from the company 401(k) plan.
Why it matters
The ruling suggests that allegations of self-dealing involving retirement funds have reached a threshold of plausibility. This outcome establishes that the court will examine whether 401(k) plan assets were handled in compliance with federal law.
The 401(k) plan allegedly authorized payments of nearly $1 million to Justworks Employment Group LLC or an affiliate in 2024. These figures remain under review as the court investigates claims of prohibited transactions.
The players
Jeremy C. Daniel
The US District Court judge for the Northern District of Illinois who evaluated the fiduciary claims.
Justworks Employment Group LLC
A provider of payroll, benefits, and HR services that manages a 401(k) retirement plan for participants.
The details
Judge Jeremy C. Daniel ruled that the allegations of fiduciary disloyalty are sufficient to continue in court after evaluating whether the complaint met necessary legal standards. While claims regarding administrative fee levels were dismissed, the core self-dealing accusations remain active. This process helps determine if the plan sponsor followed the Employee Retirement Income Security Act, which mandates that assets be used exclusively for the benefit of plan participants.
Timeline
The 401(k) plan authorization for the $1 million payment occurred in 2024.
The federal judge issued the opinion regarding the dismissal motion on October 12, 2026.
Money Landscape
This case sits within the broader regulatory environment defined by the Employee Retirement Income Security Act, which sets strict fiduciary standards for retirement plan management. The ruling underscores the high level of scrutiny applied to potential self-dealing in corporate 401(k) plans.
Plan participants should verify their 401(k) statements for any unexplained transaction patterns or shifts in administrative costs. For questions regarding the security of your specific retirement plan assets, speak with a qualified financial or tax professional.
The takeaway
This case highlights the importance of monitoring how plan sponsors manage retirement funds, especially regarding transactions between the company and its own plan. Keep a current record of your 401(k) statements and fee disclosures as a reference for any future inquiries about your account.
Further reading
For more on how retirement plan regulations work, review our guide to Retirement Planning.
Source note: This article includes information reported by Bloomberglaw.
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Do you trust that your employer manages your retirement plan funds transparently and without self-dealing?
