The lawsuit [PDF], filed on behalf of plaintiff Paul Hutchins in a US federal court in northern California, claims HP has taken forfeited funds – money the IT giant pledged to contribute to workers' 401(k) pots but unclaimed because employees left before their vesting periods – and used the money for its own benefit rather than keeping the cash in the staff retirement plan.
In America, it's still relatively common for employers, particularly large ones, to match some portion of the amount employees contribute from their own paychecks to their 401(k) retirement accounts.
The HP 401(k) Plan, a defined contribution retirement plan, offers to fully match up to four percent of an employee's eligible earnings for each pay period. So an employee earning $100,000 per year who opted to set aside $4,000 annually would be given another $4,000 by HP.
But those matching funds would not be fully paid by HP until three years later – the vesting period. The lawsuit is about what happens to undistributed funds forfeited by employees who left before that deadline.