DOL Backs Employers Again, Escalates Warning in Forfeiture Cases

The Department of Labor filed its fourth amicus brief supporting employers in 401(k) plan forfeiture disputes, offering its starkest warning yet that a pro-plaintiff ruling could jeopardize employee benefits.

The agency wrote in a brief filed on January 30 that employers might not offer matching contributions or a retirement plan at all if plaintiffs’ arguments prevail, insisting that “large corporations like Honeywell may eventually decide that the press of ever-increasing, cynical, lawyer-fabricated headaches like this case constitute a real impediment to the flexibility they need to provide their employees with retirement plans. Either way, the American worker loses.”

The brief was filed in Luciano Barragan v. Honeywell International Inc. et al., currently being considered by the U.S. 3rd Circuit Court of Appeals.

The DOL has remained active in recent months in filing amicus briefs in favor of employers. The department filed three other amicus briefs supporting employers in forfeiture cases, arguing in each that while choosing how to allocate forfeitures based on the plan’s terms is a fiduciary decision, the decision on how to use those forfeitures is a settlor function—and therefore cannot constitute a fiduciary breach under the Employee Retirement Income Security Act.

The agency was busy in January. In addition to the forfeiture filings, EBSA also submitted for White House review its intended rule on expanding alternative investments in defined contribution plans; deemphasized ESOP enforcement; and supported employers in pension risk transfers.

Barragan had been dismissed, amended and refiled before a district court dismissed the case with prejudice in August 2025, leading to an appeal to the 3rd Circuit.

The DOL has now filed briefs in support of employers in three separate 401(k) forfeiture complaints filed in the 3rd Circuit (which hears appeals from Delaware, New Jersey and Pennsylvania), while one brief was filed in the 9th Circuit Court of Appeals (which hears appeals from nine western states, including California).