Law firm accused of using employee retirement funds to cover its expenses

KANSAS CITY, Mo.

A class action lawsuit has been initiated against a local law firm, raising concerns about the alleged mishandling of employee retirement funds.

The legal action, announced on September 16, references the firm Sanford Heisler Sharp McKain. It was filed in the US District Court for the Western District of Missouri.

Complaints state that the law firm Husch Blackwell LLP and its executive committee members have failed to uphold their fiduciary responsibilities as mandated by the Employee Retirement Income Security Act (ERISA).

“The fiduciary duties under ERISA are well-known,” remarked a spokesperson. “Employees trust that when retirement contributions are withheld from their paychecks, they will be allocated directly to retirement savings—not used for the employer’s expenses. Diverting these contributions to cover operational costs is a serious breach of that trust.”

According to the allegations, Husch Blackwell has withheld salary portions intended for the employees’ 401(k) plans. Instead of depositing the funds promptly, they reportedly kept them in the company’s general operating account for extended periods, using the money for operational expenses.

The lawsuit further alleges that Husch Blackwell created a large pot of assets which the beneficiaries could not access, effectively stripping them of the opportunity to earn returns on their retirement funds.

The lawyers representing the plaintiffs assert that the defendants have breached ERISA anti-infringement rules, violated fiduciary duties, and engaged in prohibited transactions.

Sanford Heisler Sharp McKain and Fell revealed that they are filing on behalf of Tyler M. Petkou and approximately 400 affected employees.

“Law firms shouldn’t be shifting their financial responsibilities onto their employees,” the spokesperson added. “We aim for cases like Petkou’s to help correct these practices.”

A complaint was filed shortly after several significant class action settlements, the most recent being a $69 million settlement against UnitedHealth Group.