Law Firms

Husch Blackwell accused of using employee 401(k) contributions for months to cover operating expenses

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A would-be class action lawsuit filed Tuesday alleges that Husch Blackwell engaged in “a deliberate scheme” to temporarily use its employees’ retirement plan contributions for its benefit in violation of the Employee Retirement Income Security Act. (Image from Shutterstock)

A would-be class action lawsuit filed Tuesday alleges that Husch Blackwell engaged in “a deliberate scheme” to temporarily use its employees’ retirement plan contributions for its benefit in violation of the Employee Retirement Income Security Act.

The suit filed by former Husch Blackwell partner Tyler M. Paetkau claims that the law firm deducted contributions to the 401(k) plan from employee paychecks and then used the money “for months at a time” to pay firm operating expenses. As a result, plan participants were deprived of a right to seek an investment return on their retirement savings during that period, according to the suit.

Paetkau left Husch Blackwell in August after working for a little more than three years, according to the suit filed in the U.S. District Court for the Western District of Missouri. Defendants are the firm and members of its executive committee.

Citing an example, the suit says Husch Blackwell withheld $2,475 from Paetkau’s semimonthly paychecks from July through December 2023 as a mandatory year-end contribution to the plan. The withheld funds were deposited to the plan the first three months of 2024.

Withdrawn funds in lower amounts continued to be deposited after a delay, until Paetkau received a refund of more than $15,000 when he left the firm. The amount represented money deducted from his paycheck but not deposited into the 401(k) from January through Aug. 15, according to the suit.

Paetkau seeks to represent a class of 400 members whose wages were withheld but not sent to the plan by the 15th business day of the following month. The suit seeks to restore to the 401(k) plan profits that Husch Blackwell may have made through use of the funds.

Paetkau is represented by Sanford Heisler Sharp McKnight and Fell Law.

A spokesperson for Husch Blackwell did not immediately respond to the ABA Journal’s request for comment.