On February 1, 2016 a lawsuit was filed in federal district court alleging Wawa, Inc. violated ERISA laws when administering its Employee Stock Ownership Plan (ESOP). Plaintiff Greg Pfeifer alleges he and more than 3,000 other former employee participants in the plan, each who had a balance of more than $5,000, were divested from the benefits of the plan in August 2015. The lawsuit alleges that the divestiture caused significant loss of benefits and was contrary to the specific written terms of the ESOP.
The lawsuit further alleges that the Wawa ESOP plan purchased and held Wawa private stock for participants, and allowed participants to direct additional funds from their savings account for stock purchase. Regular ESOP related written communication stated that employees could continue to hold the stock after termination until retirement, when the employee could choose a lump sum or ten years of payments.
The lawsuit, which seeks class action status, alleges that by forcing Wawa terminated employee participants to sell their Wawa stock, Wawa deprived the class members of future benefit from the appreciation of the stock and related dividends. Wawa stock has appreciated significantly over the past few years, including above market average growth since the divestiture. In addition, because the stock sale was in August, 2015 the lawsuit alleges they did not receive their expected dividend in September and will be deprived of all subsequent dividends.
Donahoo & Associates, PC joined Feinberg, Jackson, Worthman & Wasow and Cohen Milstein Sellers and Toll PLLC in bringing the class action complaint in U.S. District Court for the Eastern District of Pennsylvania.
For additional information, please contact Richard E. Donahoo.
Read this recent Philadelphia Magazine story “Former Wawa Employee Proposes Big Class-Action Suit Against Convenience Store Chain” for more detail.
