A settlement has been reached in a class action lawsuit that involved allegations of collusion between Mariner Wealth Advisors and two other firms in the Kansas City area, Advisor Hub reports.
The original antitrust lawsuit, filed in federal court in February 2024, alleged that the firms conspired to refrain from competition when it came to hiring and recruiting each other’s employees in order to stifle pay. It was filed by Jakob Tobler and Michelle McNitt, previous and current employees, respectively, of former Mariner subsidiary TortoiseEcofin. The class includes individuals who were employed in non-executive roles by Mariner, Tortoise and another advisory firm, American Century, between 2012 and 2020.
Under the settlement, the firms agreed to a $25.5 million fund to pay members of the class-action suit.
Tobler and McNitt brought their claims on behalf of themselves and roughly 5,000 former and current employees of the group of wealth and asset management firms. They alleged that the firms conspired “to suppress and eliminate competition in the labor market by agreeing not to solicit, recruit or hire each other’s employees.”
The plaintiffs claimed that as a result of the defendants’ misconduct, the class members’ compensation “was artificially deflated and lower than what their wages should have been in a competitive marketplace.”
The settlement followed a Department of Justice investigation in which Mariner and American Century reached agreements to avoid prosecution, admitting that they had suppressed competition and wage growth by agreeing to not solicit each other’s employees between 2014 and 2018.
Tobler and McNitt said that is when they became aware of the collision and filed their lawsuits, claiming that the companies’ actions had prevented them from negotiating for higher pay while having a negative impact on their long-term earnings potential and retirement savings.
A federal judge still must approve the settlement, which entitles each class member to at least $50, with remaining funds distributed proportionally based on the compensation they received over the eight-year period, up to a $250,000 cap.
Court documents said the companies contended they should not be responsible for damages in the civil case, but “have nevertheless agreed to enter into this Settlement Agreement to avoid the further risk, expenses, inconvenience, and distraction of burdensome and protracted litigation.”
“Civil litigation commonly follows government enforcement actions, and with this class settlement, we are glad to be in the process of resolving this matter,” an American Century spokesperson wrote in a statement. “American Century remains committed to fair and honest competition in compliance with all laws and regulations.”
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