Sean K. McMahan of Alston & Bird LLP summarizes a recent U.S. court of appeals case, Edgar v. Avaya, Inc., et al.:

Edgar is an important development in the jurisprudence surrounding employee stock in 401(k) plans. It raises the bar for plaintiffs to survive motions to dismiss such cases, and it adds to the growing list of opinions that reject these claims.

In the unanimous panel opinion authored by Judge Julio M. Fuentes, the court holds that a deferential "abuse of discretion" standard applies to a 401(k) plan fiduciary’s decision to follow plan terms that require employer stock to be an investment option...

Read more at the Alston & Bird website (pdf).