Federal Court Delivers Blow to UnumProvident in Class Action, Refusing to Dismiss Case

UnumProvident's employees who owned and held some UnumProvident stock in their 401k plans brought a class action against the company. The federal court presiding over both this class action and the other disability class actions issued a ruling refusing to dismiss the case.

The Plaintiffs and the class allege, among other things, that UnumProvident failed to disclose its systematic scheme of denying and terminating disability claims, falsely inflating the value of the company's stock. UnumProvident's stock dropped, it is alleged, upon news of financial wrongdoing concerning accounting for its junk bonds and news of the other class actions and jury verdicts regarding the company's disability claims practices.

Judge Curtis Collier emphasized the importance of the company's fiduciary duties to its employees under ERISA, indicating that sufficient allegations of wrongdoing were made to sustain the breach of fiduciary duty claims.

Judge Collier will also be ruling upon the ERISA breach of fiduciary duty claims in the class actions involving disabled individuals covered under their employer-sponsored plans. Quadrino & Schwartz previously obtained a legal victory in one of those class actions -- the first filed in the country -- defeating UnumProvident's motion to dismiss.

 

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