Duke has resolved a pair of lawsuits that alleged mishandling of the University’s employee retirement plan.
The University has been sued for mismanaging its retirement fund twice in the past two years. Details on the terms of the resolutions are not yet publicly known. Stipulations of dismissal are due in court Jan. 2, 2019.
"The parties have reached a resolution of both cases in principle but we’re not able to comment further until the settlement is finalized and approved by the court," wrote Michael Schoenfeld, vice president for public affairs and government relations, in an email.
In the case David Clark, et al. v. Duke University, filed in August 2016, the University was accused of violating its fiduciary responsibilities for the Faculty and Staff Retirement Plan. Employees argued that Duke spent excessively on record-keeping and made poor investment decisions, violating the Employee Retirement Income Security Act (ERISA), which set standards on retirement plan fiduciaries and makes them liable for mismanagement.
Then, this past summer, the same law firm accused Duke of "self-dealing" with funds from the retirement plan. In the suit, Kathi Lucas v. Duke, plaintiffs claimed that the University used pension money to pay salaries and certain benefits to its human resources staff.
The settlement comes after Judge Catherine Eagles of the U.S. District Court for the Middle District of North Carolina refused to dismiss David Clark v. Duke in May 2017. Since negotiations are still underway, official details of that settlement won't be available until Jan. 2, 2019, according to Law360.
"The parties are working out the details and expect to seek preliminary approval by the court in the coming weeks," revealed Jerome Schlichter, the lead attorney in the case, to Law360 about David Clark v. Duke.
The plaintiffs are represented by Schlichter Bogard & Denton, a St. Louis law firm which has brought lawsuits against more than a dozen universities for mismanaging their retirement plans since August 2016. Only the University of Chicago had settled thus far, whereas New York University, Northwestern University, the University of Pennsylvania and Washington University in St. Louis all won their cases.
“Apparently some of [these institutions] thought they weren’t governed by the law that makes them fiduciaries and makes them liable for such fees and that history has been there for many universities for many years,” Schlichter told The Chronicle in August.
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