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Participants in the 80/20 Inc. employee stock ownership plan when the company terminated it who received a distribution may be eligible to claim a cash payment from a class action settlement.
80/20 Inc. agreed to pay $7,000,000 to settle a class action lawsuit alleging improper administration and termination of its ESOP, as well as violations of the Employee Retirement Income Security Act of 1974. The settlement will provide compensation to eligible class members after deductions for attorneys’ fees, administrative expenses and service awards to class representatives.
Who are the class members?
The class includes all participants in the 80/20 Inc. employee stock ownership plan at the time of the plan’s termination who received a termination distribution. This includes beneficiaries or alternate payees of record associated with those participants (such as through a qualified domestic relations order).
There are 328 class members identified based on plan records.
How much can class members get?
The total settlement fund is $7,000,000. However, the settlement administrator will reduce this amount by court-approved deductions for attorneys’ fees, administrative costs and service awards to class representatives. It will distribute the remaining amount, known as the net settlement fund, among class members.
The administrator will calculate each class member’s share on a pro rata basis, meaning their payment will be proportional to the amount they received from the plan’s termination distribution compared to all other class members. This ensures that those who received a larger distribution at the time of plan termination will receive a correspondingly larger share of the settlement.
No action needed to receive compensation
Class members do not need to file a claim to receive their share of the settlement. The settlement administrator will attempt to mail a check to the last known address of each eligible class member. However, class members can choose to receive their payment via direct rollover to an IRA or qualified employer plan, or by electronic funds transfer to a bank account by submitting the appropriate form by July 14, 2026.
Those who wish to update their address can do so online or by contacting the settlement administrator.
Payout options
- Direct rollover to an individual retirement account or qualified employer plan (not subject to automatic tax withholding)
- Electronic funds transfer to bank account (subject to automatic tax withholding and reporting)
- Paper check (subject to automatic tax withholding and reporting)
$7 million settlement fund breakdown
The $7,000,000 settlement fund covers:
- Settlement administration costs: To be determined
- Attorneys’ fees: Up to $2,333,333.33
- Attorneys’ expenses: To be determined
- Service awards to class representatives: Up to $5,000 each for seven representatives ($35,000 total)
- Payments to eligible class members: Remainder of the fund
Important dates
- Deadline to submit rollover or EFT forms: July 14, 2026
- Final approval (fairness) hearing: July 14, 2026
When is the 80/20 ESOP settlement payout date?
The settlement administrator will issue payments after the court resolves any appeals and grants final approval of the settlement.
Why is there a class action settlement?
The class action lawsuit alleged 80/20 Inc. improperly administered and terminated the employee stock ownership plan in violation of ERISA.
The defendants deny all allegations but agreed to settle to avoid the uncertainty, expense and burden of ongoing litigation.
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