US Foods Faces Class Action for Misusing $13M in 401(k) Forfeitures
Employees sued US Foods alleging improper use of $13 million 401(k) forfeitures.
Why it matters: Retirement plan fiduciary compliance is under growing scrutiny amid rising forfeiture disputes. Legal and benefits counsel must monitor evolving litigation risks.
- Employees filed class action on May 29, 2026, alleging misuse of over $13 million in forfeitures by US Foods.
- US Foods reportedly retroactively amended its plan to permit forfeiture use for employer contribution offsets.
- Department of Labor supports forfeiture use to offset contributions if plan terms explicitly allow it.
- Eighth Circuit upheld dismissal of a similar 2026 lawsuit against Wells Fargo endorsing permissible forfeiture use.
On May 29, 2026, US Foods Inc. was sued in federal court for allegedly misusing more than $13 million in forfeitures from its 401(k) retirement plan. The plaintiffs assert that instead of applying forfeitures to plan expenses as intended, US Foods used them to reduce its own required employer contributions, potentially violating the plan's terms and breaching fiduciary duties under the Employee Retirement Income Security Act (ERISA).
The complaint further alleges that US Foods retroactively amended its retirement plan document to authorize these actions after the fact, which plaintiffs contend was an attempt to justify or conceal prior misuse rather than a bona fide policy update. This legal claim highlights ongoing debate about how forfeitures can validly be used within retirement plans.
This case is part of a wider trend: over 80 similar class actions have been filed since September 2023, challenging companies' use of 401(k) forfeitures. The Department of Labor has filed multiple amicus briefs explaining its position that using forfeitures to offset employer contributions or pay plan expenses is permissible if explicitly allowed by the plan document.
Specifically, the DOL states, "where a plan allows forfeitures to be used to offset employer contributions or pay plan expenses, fiduciaries do not breach their duties by doing so." This position was cited in the Eighth Circuit's May 2026 ruling in Wells Fargo & Co. v. Martins, which dismissed a similar lawsuit and upheld such forfeiture use.
The Wells Fargo ruling is particularly influential because it sets district and circuit precedent supporting fiduciaries’ discretion. Legal experts caution, however, that courts may evaluate plan document clarity and amendment timing critically, especially retroactive changes.
The outcome of the US Foods litigation will be closely monitored for its impact on fiduciary duty interpretation, plan amendment practices, and emerging forfeiture-related litigation risks. Corporate counsel and benefits administrators should review their plan terms regarding forfeitures to ensure compliance and mitigate exposure.
By the numbers:
- $13M — amount of 401(k) forfeitures allegedly misused by US Foods
- 80+ — similar class actions filed since September 2023 over forfeiture use
- May 2026 — Eighth Circuit decision affirming permissible forfeiture use in Wells Fargo case
Yes, but: While the Department of Labor and the Eighth Circuit support forfeiture use to offset employer contributions if authorized by plan terms, courts may scrutinize retroactive plan amendments and fiduciary intent, adding uncertainty to such claims.
What's next: The US Foods case will proceed through federal court, with potential motions challenging the retroactive plan amendment; similar cases continue to shape ERISA forfeiture law.