Summary of the Lawsuit
This lawsuit alleges that Wawa and other fiduciaries of the Wawa, Inc. Employee Stock Ownership Plan (“ESOP” or “Plan”) violated ERISA and breached their fiduciary duties with respect to the administration of the Plan and by adopting and implementing two amendments to the Plan that divested employee participants of their benefit and right to continue holding Wawa stock in the ESOP and forced liquidation of their Wawa stock at share prices less than fair market value.
Summary of the Claims
This lawsuit was filed as a class action on behalf of former Wawa employees whose ESOP accounts with a balance greater than $5,000 as of their termination date were liquidated on or after September 12, 2015, including those retired between January 2011 and December 2014 (“Retiree Employee Subclass”), and those employed before January 2014 and terminated after January 2015 (“Terminated Pre-2014 Employee Subclass”), The Complaint alleges violations of the Employee Retirement Security Act of 1974 (“ERISA”), the federal law governing pension plans, and breach of fiduciary duties, and challenges the post-termination change to the Wawa ESOP forcing the divestment of Wawa stock in ESOP accounts of the Class members.
Prior to amendments to the Plan in 2014 and 2015, the Plan document for the ESOP provided that all former employees had the right to remain as participants in the ESOP and continue to hold Wawa stock in their ESOP accounts until age 68, at which time they would be offered the same benefit options as retired participants. Beginning in 2014, Wawa amended the ESOP in an effort to remove former employees from the Plan, by forcing liquidation of ESOP stock of any Participant who terminates employment on or after January 1, 2015. In August 2015, Wawa amended the ESOP again, requiring the liquidation of shares for participants who had terminated or retired before January 1, 2015. The Complaint alleges that these forced sales of Wawa stock and liquidation of ESOP accounts violated ERISA and breached promises that Wawa and the ESOP fiduciaries had made to Plaintiffs and other Retired or Terminated Pre-2014 Employee Participants.
The Complaint alleges that the forced sale was based on a stale and unreliable valuation of the stock. The Complaint alleges that the Class received less than fair market value for their Wawa stock, lost the right to continue to own Wawa stock, as well as the continued appreciation in value of Wawa stock, dividends paid by Wawa stock, and the opportunity to benefit from future dividends and appreciation in value of Wawa stock. The lawsuit seeks to recover the losses suffered by the Class and the ESOP that stem from the incorrect price and the application of the 2014 and 2015 Amendments, as well as other appropriate equitable relief, and reformation of the ESOP Plan terms to eliminate the applicability of the amendments to any participant who retired or terminated prior to its implementation.
This lawsuit is brought on behalf of the following class:
All Participants in the Wawa, Inc. Employee Stock Ownership Plan (“Wawa ESOP”) with account balances greater than $5,000.00 as of the date that they terminated employment whose accounts were liquidated between September 12, 2015 and December 31, 2019 and the beneficiaries of such participants.
This lawsuit is brought on behalf of the following Subclass (the “Retired Employee Subclass”):
All Participant members of the Class who Retired (terminated employment after attaining age 50 with 25 Years of Credited Service, or attaining age 62 with 15 Years of Credited Service, and not terminated for Cause) between January 1, 2011 and December 31, 2014 and the beneficiaries of such Participants.
This lawsuit is brought on behalf of the following Subclass (the “Terminated Pre-2014 Employee Subclass”):
All Participant members of the Class who were employed by Wawa and participated in the ESOP before January 1, 2014 and who terminated employment on or after January 1, 2015 and the beneficiaries of such participants.
Excluded from the Plaintiff Class are: (a) the Defendant Trustees and members of the Defendant Committee and their immediate families; the current officers and directors of Defendant Wawa and their immediate families; (b) participants who were members of the Class in Pfeifer, et al. v. Wawa, Inc., et al., No. 2:16-cv-00497-PD (E.D. Pa); and (c) the legal representatives, successors, heirs, and assigns of any such excluded persons.
Status of the Litigation
The complaint was filed with the District Court for the Eastern District of Pennsylvania on August 8, 2018. Defendants filed a Motion to Dismiss and Motion to Strike Class Allegations on October 29, 2018. The Court denied the Motion to Strike Class Allegations on November 6, 2018. On January 10, 2019 the Court denied Defendants’ Motion to Dismiss as to all claims, but granted a portion of Defendants’ motion as to Plaintiffs’ anti-cutback claims to the extent those claims rely on Plaintiffs’ right to hold Wawa stock or receive distributions. Plaintiffs filed a Motion for Class Certification on March 18, 2019, which Defendants opposed as to certain claims by the Subclasses. The Court held a hearing on Plaintiffs’ Motion for Class Certification on April 18, 2019. On July 2, 2019, the Court issued an order granting Plaintiffs’ Motion for Class Certification and granted the Motion on July 2, 2019.
Plaintiffs reached a settlement on behalf of the Class to settle the claims in this Litigation. On July 9, 2020, Plaintiffs’ filed theMotion for Preliminary Approval of Settlement. The settlement needs to be approved by the Court, which consists of a three part process (1) the Court granting preliminary approval of the settlement, (2) formal notice mailed to class members and class members will be provided with the ability to comment on the Settlement, and (3) the Court granting final approval of the settlement.
Whom to Contact for More Information
If you are a member of the proposed class or you have information which might assist us in the prosecution of these allegations, please contact one of the following persons: