Sanford Heisler Sharp McKnight Files ERISA Class Action Case Against Discount Tire and Empower Trust Company on Behalf of More Than 16,000 Retirement Plan Participants

Suit alleges Discount Tire and Empower failed to remove and replace habitually underperforming funds

/EIN News/ -- PHOENIX, April 30, 2025 (GLOBE NEWSWIRE) -- Sanford Heisler Sharp McKnight filed a class action complaint today in the U.S. District Court for the District of Arizona alleging that The Reinalt-Thomas Corporation, d/b/a Discount Tire Co., Inc., and Empower Trust Company breach basic fiduciary duties under ERISA and violate the trust of plan participants by mismanaging the Discount Tire/America’s Tire Retirement Plan. The Complaint alleges that Discount Tire and Empower failed to remove from the Plan a family of nine target date retirement funds managed by American Century Investment Management, Inc. that have significantly underperformed investment benchmarks and similar target date retirement funds for over fifteen years, costing participants millions of dollars in retirement savings.

The American Century funds have over $500 million in plan assets invested in them, representing nearly half the value of the Plan.

According to the allegations in the Complaint, the American Century Funds have been in the Plan under various names and forms since on or before January 2010. By December 2019, the cumulative investment performance of each of the nine target date funds had lagged their investment benchmark – Standard & Poor’s Target Retirement Date Index – for ten years. Each of the nine funds also underperformed other target date retirement fund alternatives over the same period. American Century’s underperformance continues to this day. Yet, Discount Tire has taken no action to replace American Century. As alleged, the consequences to employees are substantial: the decision not to remove the American Century Funds has cost the Discount Tire/America’s Tire Retirement Plan and its participants millions of dollars in retirement savings.  

The named plaintiff, Cory McGeathy, filed this case on behalf of the Discount Tire plan, which has approximately 16,000 participants and over $1 billion in assets. Named as Defendants are The Reinalt-Thomas Corporation, d/b/a Discount Tire Co., Inc.; The Reinalt-Thomas Board of Directors and its members; and Empower Trust Company, LLC.

“As fiduciaries of the plan, Defendants are duty-bound to monitor the plan’s investments continuously and remove imprudent ones,” said Charles Field, Co-Chair of the firm’s Financial Mismanagement and ERISA Litigation Practice Group and counsel for Plaintiff and the proposed class. “This obligation is especially critical since these nine funds make up over 40% of the Plan’s assets. Cases like this are an important tool for protecting the hard-earned retirement savings of employees.”

Leigh Anne St. Charles, Co-Chair of the firm’s Financial Mismanagement and ERISA Litigation Practice Group and counsel for Plaintiff and the proposed class, added “Plan participants have over $500 million invested in these nine target retirement date funds. As fiduciaries to the Plan, Discount Tire and Empower are obligated to monitor the Plan to ensure these investments are prudent. It is precisely that duty that this complaint alleges the Defendants have breached by failing to remove the American Century Funds.”

Sanford Heisler Sharp McKnight has filed the Discount Tire ERISA complaint on the heels of several significant ERISA class settlements in 2024. In December 2024, the firm filed for preliminary approval of a record $69 million settlement in its multi-year class action against UnitedHealth Group. Earlier in 2024, Sanford Heisler Sharp McKnight, together with co-counsel, also obtained final approval of a $61 million settlement in a long-running ERISA class action against General Electric. The UnitedHealth and GE settlements were among the most significant ERISA settlements of 2024. They were also among the highest value settlements ever in cases involving allegedly poor-performing plan investments.

About Sanford Heisler Sharp McKnight

Sanford Heisler Sharp McKnight is a public interest and civil rights law firm with offices in New York, Washington, DC, San Francisco, Palo Alto, Nashville, and San Diego. The firm focuses on executive representation, wrongful termination, employment discrimination, sexual harassment, retaliation, wage theft and overtime violations, whistleblower and qui tam, sexual violence, Title IX violations and victims’ rights, financial mismanagement and ERISA litigation, and Asian American litigation and finance matters. Our lawyers have recovered over $1 billion for our clients through many verdicts and settlements.

In 2024, Forbes named Sanford Heisler Sharp McKnight Chairman and Co-Founder David Sanford to its inaugural list of America’s Top 200 Lawyers. The National Law Journal has selected Sanford Heisler Sharp McKnight as Civil Rights Firm of the Year, and it has recognized the firm as both Employment Rights Firm of the Year and Human Rights Firm of the Year. Benchmark Litigation has named the firm Labor & Employment Firm of the Year, and Law360 has recognized the firm as Employment Practice Group of the Year.

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If you have potential legal claims and are seeking counsel, please call 646-768-7070 or email david.sanford@sanfordheisler.com. Attorneys at Sanford Heisler Sharp McKnight would like to have the opportunity to help you.

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