The U.S. Court of Appeals for the Third Circuit affirmed the dismissal of a claim brought by Johnson & Johnson employees who alleged that the administrators of the company’s Employee Stock Ownership Plan were “corporate insiders” who violated their fiduciary duties by failing to protect employees from a drop in stock price amid the company’s baby powder controversy.
J&J offers an ESOP as an option within its retirement savings plans, which invests solely in the company’s own stock, according to the opinion. There are three J&J-sponsored defined contribution plans, all governed by the provisions of the Employee Retirement Income Security Act: the J&J Savings Plan, the J&J Savings Plan for Union Represented Employees, and the J&J Retirement Savings Plan. The plans are administrated by the J&J Pension and Benefits Committee.
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