One outstanding illustration of how group will can hold even the most venerable financial institutions responsible is the Elevator ERISA Settlement. Two elevator employees, Bradley McLachlan and Alex Graham, filed a complaint against the trustees in charge of their retirement plan, claiming that inadequate supervision and exorbitant fees had covertly depleted millions of dollars from the savings of diligent craftsmen. Their tenacity resulted in a $5 million settlement that may change the way pension trustees function in all labor unions across the country.
The Elevator Constructors Annuity and 401(k) Retirement Plan, which has over 30,000 members, was at the center of the case, which was heard in a federal court in Pennsylvania. The plan’s fiduciaries, according to McLachlan and Graham, did not act prudently as required by the Employee Retirement Income Security Act, or ERISA. Their allegation bore a striking resemblance to other well-known cases that have revealed financial inefficiencies in pension systems run by corporations and unions.
The plaintiffs proved that, in comparison to similar large-scale plans, the trustees permitted administrative fees that were much higher. Members of this plan were paying more than $100 annually, whereas similar funds charged about $25 per participant. This disparity, when multiplied by the large number of fund members, resulted in millions of dollars in lost savings, which was especially detrimental to long-term contributors who were getting close to retirement.
The parties came to a $5 million agreement after months of negotiating. The settlement, which was reached in August 2024, covers class compensation, litigation costs, and attorney fees. $75,000 is set aside for litigation costs, and approximately $1.67 million will go toward legal fees. The two class representatives who spearheaded the legal challenge will each get $8,000 for their efforts. An independent fiduciary was chosen to supervise the distribution of the funds in order to maintain impartiality and guarantee that each participant gets their fair share.
Table – Elevator ERISA Settlement Overview
| Category | Details |
|---|---|
| Case Title | Elevator ERISA Settlement |
| Plaintiffs | Bradley McLachlan and Alex Graham |
| Defendant | Trustees of the Elevator Constructors Annuity and 401(k) Retirement Plan |
| Court | U.S. District Court, Pennsylvania |
| Settlement Amount | $5 million |
| Class Members | Approx. 30,000 union elevator workers |
| Main Allegation | Breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA) |
| Key Issue | Excessive fees and poor investment options in the retirement plan |
| Date Filed | October 2022 |
| Settlement Reached | August 2024 |
| Duration of Class Period | October 2016 to settlement approval |
| Allocation | Legal fees, litigation costs, and participant compensation |
| Reference | www.elevatorerisasettlement.com |
Despite starting out as a financial dispute, the case developed into something deeper—a reflection of the intersection of financial integrity, responsibility, and trust. The International Union of Elevator Constructors and its executive board were initially named by the plaintiffs in the lawsuit, but in 2022, those parties were dropped. The trustees’ duty to act in the best interests of employees whose careers depend on them managing their retirement contributions honestly remained the main focus.
The case also demonstrated the complexity and opacity of pension administration, especially in systems run by unions. A large number of participants believed their contributions were treated with the highest care. However, the revelation of exorbitant fees and underperforming investments sparked a strong sense of betrayal. This case wasn’t just about money for those workers, many of whom have spent decades constructing the actual framework of contemporary cities. It was about making sure that their future security was safeguarded with the same accuracy and dependability that they use in their work.
Because the Elevator ERISA Settlement focused on systemic accountability by utilizing ERISA’s fiduciary provisions, labor lawyers and financial analysts have characterized it as especially innovative. The case looked at structural failures that allowed inefficiencies to continue for years, rather than just mismanagement after damage occurred. This change in emphasis may lead to new litigation tactics in other sectors where multiemployer funds oversee employee benefits.
The precedent has also been compared to the seminal Supreme Court case from 2016, Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, which elucidated the boundaries of ERISA’s enforcement authority. The Elevator ERISA case changed the rules by making fiduciaries responsible for what they did not stop, whereas Montanile limited how they could recover money. According to legal experts, such as Darryl K. Brown of the University of Virginia School of Law, this changing interpretation of ERISA shows that fiduciary responsibility is becoming increasingly recognized as both morally and legally right.
The settlement was an emotional win for a lot of union members. It conveyed a strong message: blue-collar workers can demand financial justice from those in charge of their futures if they band together and are well-informed. Similar initiatives have been sparked by the bravery of McLachlan and Graham in other trade unions, especially in industries like manufacturing and construction where pension plans frequently manage billions of dollars’ worth of assets but are not regularly supervised.
Labor organizations’ financial transparency has long been a touchy subject. A lot of members don’t understand how their money is being used. However, a number of union boards have already been prompted by the settlement to review their administrative contracts and renegotiate fee arrangements. Although the change may not seem like much, thousands of workers who rely on these funds for retirement may benefit greatly in the long run.
