In 2008 the ESOP portion of the plans was merged with SLI's other defined contribution plan, and participants were given the option of liquidating company stock annually without the previous restrictions of a qualifying event.

By the fall 2008, SLI's revenues were dropping sharply, potentially threatening the firm's relationship with its creditors. By the end of 2008, SLI had engaged Blackstone, a private-equity company with a stake in the firm, about seeking a potential buyer of the company.

The process was kept confidential, but the four named plaintiffs in the case, all longtime SLI employees, were made aware of the process. In April 2009, GSK acquired SLI for about $2.9 billion.

Participants in SLI's ESOP plan received about $70,000 per share in the deal, substantially more than the previous valuations employees' sold shares for.

The case hinges on releases that each employee signed waiving their rights to sue Stiefel after they left the company.

The plaintiffs all alleged that SLI breached its fiduciary obligations under the Employee Retirement Income Security Act when it "controlled the flow of information" as the company engaged in acquisition negotiations.

And setting up the sale of the company to GSK "for prices well in excess of the amount paid to the employees for their company stock," amounts that were established by the independent auditor at share prices well below the $70,000 per share GSK paid for SLI shares, was also a fiduciary breach, according to the plaintiffs' complaint.

Those allegations amounted to the communication of "false and misleading" statements to participants regarding the value of the company stock and their options to sell shares prior to the acquisition.

The three plaintiffs whose claims the court dismissed all signed general releases upon receiving severance compensation packages.

Those contacts "unconditionally and forever" waived three of the plaintiffs' right to sue, specifically including "any and all claims arising under the Employee Retirement Income Security Act," according to court documents.

ERISA, of course, allows participants to bring civil claims for alleged fiduciary breaches against plan trustees, but in seeking to have all the claims dismissed, SLI argued the the defendants lacked standing to bring suit, given that they "knowingly and willingly" released their right to.

ERISA does not "explicitly address waivers," wrote Judge Mark Cohen, but courts have generally applied federal law to waivers to long as they are made in "good faith."

Cohen threw out the claims made by three plaintiffs, ruling the contracts they signed waiving their right to sue were enough to override ERISA's protections. The three claims that were dismissed were seeking damages to individual retirement accounts.

But one plaintiffs' claim, John Wagner's, will proceed, because his claim was brought on allegations that affected all participants in the plan, not just a claim seeking recovery for "individual injury," as was the basis for the three dismissed claims.