Five ex-Dell employees are suing the tech giant, alleging its 401(k) plan mismanagement cost workers over $318 million. The lawsuit claims Dell violated federal law by keeping workers in underperforming investment funds while profiting from its own products. This class action seeks to recover losses and reform the retirement plan’s operations.

Five former Dell Technologies employees are suing the company, claiming mismanagement of its 401(k) plan that cost workers more than $318 million. The proposed class action was filed on January 28 in a federal court in Austin, Texas. It accuses Dell of violating the Employee Retirement Income Security Act by sticking with underperforming investment funds for years when better options existed.The plaintiffs—Allison Lowbruck, Adam Moss, Eric Rodgers, Michael Schwartz, and John Vedamanikam—say Dell’s in-house products, including the Dell Pre-Mixed Portfolio Target Date Series and Dell Core Funds, consistently trailed comparable market funds.

The self-dealing accusation

Here’s where it gets interesting. The lawsuit alleges Dell designed the funds, picked the managers, controlled asset allocation, and then collected fees from all those decisions. The plaintiffs argue this created a conflict of interest that violates federal retirement regulations.Dell’s 401(k) is no small operation. It covers roughly 63,000 people and held about $14.6 billion in assets in 2024. According to the complaint, one-third of that money sat in the underperforming funds.Dell declined to comment, citing pending litigation.

What happens next

The former employees want the losses recovered for all plan participants. They’re also pushing for Dell to return fees earned through alleged self-dealing and demanding reforms to how the retirement plan operates.These lawsuits aren’t rare. Large companies often settle rather than go to trial. UnitedHealth paid $69 million in 2015 to resolve a similar case. Boeing shelled out $57 million that same year after nearly nine years of litigation.The Dell case could take years to resolve. For now, thousands of current and former employees wait to see if they’ll get any of that $318 million back.