A group of professors who accused NYU of mismanaging their retirement plans in a 2016 lawsuit are pushing for the case — which alleged that the university cost the group $358 million — to be tried in front of a jury, a demand the university says the group of faculty has “no right” to. A judge had dismissed the case in 2018, and while an appeal partially reversed the dismissal, it also affirmed that the professors do not have the right to a jury trial because they had waived it earlier on.
The case accuses NYU of violating the Employee Retirement Income Security Act of 1974 — which determines minimum standards for pension plans for private institutions — by choosing to include high-cost retail mutual funds attached to costly fees in its retirement plans over existing more affordable options.
This past summer, the group of professors filed an amended complaint with additional defendants named, again asking for a jury trial. In a recent memo, NYU argued that the updated complaint aims to retry claims the professors already lost in the original suit, saying the previous ruling against the plaintiffs’ right to a jury trial still stands. Plaintiffs filed a separate memo in response yesterday, calling NYU’s argument “invalid.”
In a written statement to WSN, retirement plan attorney Jerome Schlichter, who works at the firm representing the plaintiffs in the case, said the professors’ request for a jury trial differs from others because they “have had multiple rulings by courts granting jury trials since those requests.”
“We believe that juries understand very well the importance of building their retirement assets and don’t usually have the expertise of financial experts,” Schlichter wrote to WSN.
In August 2017, the university told the court to reject the professors’ initial request for a jury trial, and the court granted the motion. The court then held a bench trial — where the judge hears the testimony and reviews the evidence instead of a jury — where the court ruled in favor of NYU on all claims.
That decision was later partially reversed, with an appeals court ruling that one of the professors’ claims had been incorrectly dismissed. Following the professors’ appeal, the university attempted to bring the case to the U.S. Supreme Court in 2021, but the court refused to review the case without explanation.
NYU was one of more than 10 universities to have been hit with a similar lawsuit, all brought by Schlichter. In one such case against Northwestern University that made it to the Supreme Court, the court ruled in favor of the university’s employees.
David Bloomfield, a professor of education leadership, law and policy at Brooklyn College and The City University of New York Graduate Center, said in a written statement that the case might experience further delays.
“Whether there’s a jury trial or a bench trial, it will still take some time,” Bloomfield wrote. “Bottom line: a decision is probably not imminent unless there’s a settlement between the parties before a trial.”
A university spokesperson declined to comment on this story.
Contact Bruna Horvath at [email protected].
