Giant Eagle Worker Seeks Initial OK For $669K ERISA Deal

By Matthew Santoni

Law360 (May 30, 2025, 2:59 PM EDT) -- A proposed class of employees at Pennsylvania-based gas and grocery chain Giant Eagle asked a federal court for preliminary approval of an almost $669,000 settlement of their claims that the company overspent their retirement savings on administrative fees.

Proposed lead plaintiff Cheryl Kehrer said that, if approved, the proposed settlement would cover more than 15,000 retirement plan participants and beneficiaries who worked at Giant Eagle and contributed to the plan as far back as August 2018. The settlement would be quicker and less risky to the proposed Employee Retirement Income Security Act class than trying to prove their claims through a trial, Kehrer said in her request for preliminary approval Thursday.

"In this complex ERISA class action, plaintiff would proffer an expert for liability and damages, which defendants undoubtedly would counter with their own proffered expert(s). Ultimately, a battle of experts presenting differing opinions as to the prudence of the conduct of defendants and starkly different views on liability would ensue," the brief in support of preliminary approval said. "… Although a trial on the merits in any case always entails some risk, in the context of ERISA breach of fiduciary duty class actions, the risk is even more considerable as plaintiffs in various cases have been unable to satisfy their burdens of proof in analogous cases."

Thursday's motion sought preliminary approval of the settlement so that potential class members could be contacted.

Kehrer had filed suit in August 2024, claiming Giant Eagle breached its fiduciary obligations to 401(k) plan participants by failing to control administrative and record-keeping costs, wasting the assets of the plan and failing to act in the best interests of the plan participants.

By December, Giant Eagle had filed a motion to dismiss the case and Kehrer had filed a response, but both sides agreed to try mediation before the motion was decided, the brief said.

After a daylong mediation session in February, led by Babst Calland's Mark Shepard, the parties reached the basics of an agreement, which they continued working on and announced in April.

According to the proposal presented for preliminary approval, Muhic Law and Wade Kilpela Slade LLP would request up to one-third of the $668,750 settlement fund as fees and up to $15,000 for costs. Kehrer would seek a $5,000 award as the lead plaintiff.

The brief said the proposed settlement should meet all the requirements for approval, since it was reached after an arm's length negotiation and significant discovery during the pre-complaint and mediation stages.

If the case were to continue, Kehrer acknowledged that Giant Eagle would strongly contest her assertions that the plan's recordkeeping and administrative services, or RKA fees, were unreasonable and consumed millions of dollars unnecessarily.

"Plaintiff's assessment of maximum potential damages to the plan, in a best-case scenario, was approximately three million dollars," the brief said. "… Not only did defendants assert facts to demonstrate a purported prudent process of fiduciary review, defendants challenged the comparators utilized by plaintiff in calculating potential damages, as well as the per-participant RKA fees put forth by plaintiff. While plaintiff was confident in her theory of liability and calculation of potential damages, she acknowledges that defendants would raise a strong challenge to her claims."

The suit would face an additional challenge of convincing the court to stick to the proposed class period, which, if shortened, could further reduce the damages below the amount in the settlement, Kehrer said. Giant Eagle was also looking for new proposals for recordkeeping that could reduce the fees at issue in the case for the future, further complicating the calculation of damages going forward, she said.

"Given the wide range of potential damages, the outcomes at trial, and the uncertainty of proving actual losses to the plan, the monetary settlement is fair and reasonable," the brief said.

Any objections to the settlement or the reaction of proposed class members would have to be assessed after class members are notified, the brief said.

Counsel for the parties did not immediately respond to requests for comment Friday.

Kehrer and the proposed class are represented by Edwin J. Kilpela and Paige T. Noah of Wade Kilpela Slade LLP and Peter A. Muhic of Muhic Law LLC. Giant Eagle is represented by Emily Byrne, Jeremy P. Blumenfeld, and Stephanie R. Reiss of Morgan Lewis & Bockius LLP.

The case is Kehrer v. Giant Eagle Inc., case number 2:24-cv-01211, in the U.S. District Court for the Western District of Pennsylvania.

--Additional reporting by Hailey Konnath.

--Editing by Patrick Reagan.

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