David C. Japha- When Employee Money Isn’t the Company’s Money Part 1

Okay.

So on the twenty-eighth of September, just about a week ago, uh, a district court, a United States district court in Massachusetts decided a case.

It was tried to the court.

It was not tried to the jury.

Trader Joe's was the business.

So many of our listeners may not be able to relate to that.

Trader Joe's a fairly large business.

But what I'm gonna talk about applies to small businesses as well.

The case is Stephan versus Trader Joe's.

It was a class action suit, and it was brought by employees and former employees who said that Trader Joe's mis-managed their 401(k) retirement plan.

Now, this is important because almost everyone has a 401(k).

And if you're in a medium-sized company, and you are in the management side of a medium-sized company, this is something I think applies to you.

Why? Because under a, a statute, a federal statute called ERISA, which, uh, many people, uh, may not, uh, know exactly.

ERISA is a, a, a, a retirement fund for employees.

And the, this case, this Trader Joe's case that was decided, addressed the question of what kind of oversight does the m-management have for funds that are taken out of a paycheck of an employee and placed in a separate fund in order to then reward the employees in their 401(k) plan.

And the reason I thought this was important is because small companies sometimes are strapped for cash, and they may think that the money that they are pulling out of a paycheck is their money, when in fact it is not.

It is still the employee's money.

And so how you deal with that is very important.

And that's the, that's the background.

Yeah.

So that's what I want to, um, talk about today because i-in all things that a company does with your employee's money, then that's important because it's not your money.

It's not the company's money.

Yeah.

And so when they-

I mean, the most common example is-

Okay.

So on the twenty-eighth of September, just about a week ago, uh, a district court, a United States district court in Massachusetts decided a case.

It was tried to the court.

It was not tried to the jury.

Trader Joe's was the business.

So many of our listeners may not be able to relate to that.

Trader Joe's a fairly large business.

But what I'm gonna talk about applies to small businesses as well.

The case is Stephan versus Trader Joe's.

It was a class action suit, and it was brought by employees and former employees who said that Trader Joe's mis-managed their 401(k) retirement plan.

Now, this is important because almost everyone has a 401(k).

And if you're in a medium-sized company, and you are in the management side of a medium-sized company, this is something I think applies to you.

Why? Because under a, a statute, a federal statute called ERISA, which, uh, many people, uh, may not, uh, know exactly.

ERISA is a, a, a, a retirement fund for employees.

And the, this case, this Trader Joe's case that was decided, addressed the question of what kind of oversight does the m-management have for funds that are taken out of a paycheck of an employee and placed in a separate fund in order to then reward the employees in their 401(k) plan.

And the reason I thought this was important is because small companies sometimes are strapped for cash, and they may think that the money that they are pulling out of a paycheck is their money, when in fact it is not.

It is still the employee's money.

And so how you deal with that is very important.

And that's the, that's the background.

Yeah.

So that's what I want to, um, talk about today because i-in all things that a company does with your employee's money, then that's important because it's not your money.

It's not the company's money.

Yeah.

And so when they-

I mean, the most common example is-