Grainger 401(k) $2.85M Forfeiture Settlement — Awaiting Approval

ERISA · Awaiting Preliminary Approval

Current Status

The settlement has not been approved yet, and there is nothing to file. Plaintiffs filed a motion for preliminary approval on October 23, 2026, in the U.S. District Court for the Northern District of Illinois, before Judge Mary M. Rowland. If the court grants final approval, payments would be automatic: account credits for people with a plan account and checks for everyone else. There is no settlement website yet, and no payment date has been set.

What Changed Recently?

On October 23, 2026, plaintiffs asked the court to preliminarily approve a $2.85 million settlement, certify a settlement class, approve the notice plan and appoint Analytics Consulting LLC as settlement administrator. The settlement agreement was signed the same day. The parties had mediated before Robert A. Meyer on July 28, 2026, reached an agreement in principle on August 4 and told the court on August 10.

The case is Gardner-Keegan v. W.W. Grainger, Inc., No. 1:25-cv-05233, filed May 12, 2025. The plaintiffs claim the plan’s fiduciaries used forfeitures, the unvested employer contributions left behind when employees leave, to offset Grainger’s own contributions instead of first paying the plan’s reasonable administrative expenses. On January 26, 2026, the court dismissed the prohibited-transaction claims but let the fiduciary-breach claims proceed, reading the plan’s Section 8.4 as requiring forfeitures to be used for reasonable administrative expenses before offsetting employer contributions. Grainger and its Profit Sharing Investment Committee deny all liability, and the settlement is not an admission of wrongdoing.

Who Qualifies?

The proposed settlement class is everyone who participated in the W.W. Grainger, Inc. Retirement Savings Plan at any time from May 12, 2019 through the date the court enters a preliminary approval order. It includes the beneficiary of a deceased participant and the alternate payee of a participant subject to a qualified domestic relations order. The plaintiffs estimate the class at more than 30,000 people.

How Much Could Class Members Get?

No per-person estimate has been published. The $2.85 million fund would pay, subject to court approval, attorneys’ fees of up to $950,000 (one-third of the fund), up to $60,000 in litigation costs and up to $10,000 for each of the three class representatives. If all of those were awarded in full, $1,810,000 would remain before administration expenses, taxes and any reserve are deducted.

The remaining net amount would be divided by adding up each class member’s quarterly plan account balances, starting with the April to June 2019 quarter and ending with the quarter of preliminary approval. People with an active plan account would receive a credit to that account; people without one would receive a check. People without an active account whose initial share comes to $5 or less would be left out of the first distribution, with that money redistributed to others.

The plaintiffs told the court they estimate recoverable losses at about $14.25 million, including claimed lost investment earnings through the first quarter of 2026, so the $2.85 million settlement represents about 20% of that estimate.

What Proof or Notice ID Is Required?

None. The proposed plan of allocation uses plan records, and no claim form is required. Notice would go by email where a valid address is available, with a postcard by mail to everyone else and to anyone whose email bounces.

What Is the Deadline?

There is no claim deadline because no claim is needed. The plaintiffs ask for certification under Rule 23(b)(1), which has no opt-out right. Class members could object to the settlement; under the proposed schedule, objections would be due 30 days before the final approval hearing, which would be held no earlier than 120 days after the October 23 motion. The court sets the actual dates if it grants preliminary approval.