DOL Sues Third Profit-Sharing Plan in 2024

The Department of Labor has sued the Rochester Overnight Plating LLC 401(k) Profit Sharing Plan & Trust and Katherine Hurd, president of Rochester Overnight Plating, alleging the company failed to deposit employee contributions to the retirement plan and to obtain a fidelity bond.  

Hurd, the firm and the profit-sharing plan stopped promptly and consistently depositing all employee contributions to the plan in 2021—although they continued to withhold retirement contributions from employee pay, the DOL claimed in the April 30 complaint filed in U.S. District Court for the Western District of New York. Instead, the firm allowed participants’ retirement money to remain undivided in a general operating account, alleged the complaint

Hurd, Rochester Overnight Plating and the profit-sharing plan “allowed plan assets to commingle with the company’s general funds, which the company could access for impermissible purposes such as paying everyday business expenses,” DOL attorneys wrote.

The defendants are also alleged to have failed to obtain a fidelity bond, as required under the Employee Retirement Income Security Act, DOL attorneys wrote.

In the complaint, the DOL requested a court order directing the defendants to restore all plan losses, with interest and/or lost opportunity earnings that occurred as a result of the alleged violations of ERISA. The DOL is seeking to have any money currently in the defendants’ accounts used to satisfy in part the defendants’ obligation to restore the withheld contributions; and demanding the plan obtain proper fidelity bonds.

The DOL alleged the accused violated their ERISA fiduciary duties to retirement plan participants of exclusive purpose, prudence and loyalty, caused the plan to enter into prohibited transactions and engaged in self-dealing, claimed the DOL.

The Rochester Overnight Plating LLC 401(k) Profit Sharing & Trust held $63,736 in retirement assets for 32 participants, as of the plan’s latest regulatory filing to the DOL in 2023.  

The DOL has filed three separate lawsuits against profit-sharing retirement plans this year.

In January, the department sued the profit-sharing plan of defunct company Jones Dykstra and Associates Inc., and last month, the Trees R Us Inc. Profit Sharing Plan.

In 2023, the DOL sued at least six different profit-sharing plan sponsors.

Rochester Overnight Plating LLC specializes in the production of alloyed metals. The company established the plan in 2010.

Representatives of Rochester Overnight Plating LLC did not return requests for comment nor did representatives of the DOL.

The lawsuit is Julie Su, acting secretary of Labor, U.S. Department of Labor v. Rochester Overnight Plating LLC et al.