Federal District Court Rules Record Keepers May Use Participant Data to Cross-Sell Retail Products

Harman et al vs. Shell Oil Company et al


  • This class action suit, filed in January of 2020, was brought on behalf of participants in the Shell Provident Fund 401(k) Plan. The case was filed in the Federal District Court for the Southern District of Texas. The allegations are typical of such suits and include contentions such as the plan fiduciaries allowed the Plan to bear unreasonable administrative costs and failed to adequately monitor the investment lineup.


  • Fidelity is the recordkeeper. It was named as a defendant on the grounds that it allegedly engaged in prohibited transactions under ERISA by using participant data to cross-sell. The cross-selling practices Fidelity is alleged to have engaged in are typical of many large record keepers. The complaint alleges that participant data was used to cross-sell brokerage and advisory services, insurance, credit cards and other banking services. Recent settlements of some class action lawsuits have included a provision prohibiting the plan record keeper from using participant data to cross-sell retail products.


  • Fidelity argued that it is not a plan fiduciary and did not engage in prohibited transactions through its use of participant data because, contrary to the allegations of the plaintiffs, such data is not a plan asset. The judge examined the Department of Labor regulations defining what constitutes a plan asset and agreed with Fidelity, granted their motion to dismiss them as a defendant.¬†


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