The case is one of several alleging that various companies violated the Employee Retirement Income Security Act by not treating forfeited employer contributions to 401(k) plans properly. Cases against Qualcomm. and Intuit have advanced, while such claims failed against JP Morgan and Kaiser Foundation were recently dismissed.

In 2024, Wells Fargo was sued for violating ERISA and "wrongfully and consistently" misusing $2,020,000 in forfeited 401(k) plan assets for the company's own benefit instead of its participants. In Matula v. Wells Fargo & Co., former employee Thomas Matula, Jr. alleged the Wells Fargo & Company 401(k) Plan violated ERISA and "wrongfully and consistently" misused 401(k) plan assets for the company's own benefit instead of its participants, in a lawsuit in California federal court. Plan assets "have been wrongfully diverted out of the Plan," according to the suit.

As has been cited in more than 50 such forfeiture suites against major employers, Wells Fargo used the forfeited plan assets – those forfeited by employees leaving the company before becoming fully vested in the plan – to reduce its own contributions for year ended December 31, 2022, citing a Form 5500 filing in the suit. The lawsuit further alleged a breach of fiduciary duty and a failure to monitor plan fiduciaries.

Related: JPMorgan gets 401(k) case dismissed, as courts reject more forfeiture lawsuits

However, in dismissing the lawsuit, Judge John R. Tunheim of the U.S. District Court for the District of Minnesota noted that “while it is true that the Plan authorizes the use of forfeited funds ‘to pay expenses of the Plan,’ expenses in this context refer to the necessary administrative expenses of the Plan, not the optional and investment expenses for which Matula is advocating … Because the Plan does not authorize Wells Fargo to use forfeited funds to pay optional services and operating expenses, Matula cannot have been injured by Wells Fargo’s alleged failure to use forfeited funds to pay for such expenses.”