On Wednesday the National Chamber Litigation Center filed an amicus brief in a controversial class action lawsuit against perhaps the largest 401(k) plan in the country. Wal-Mart's 401(k) plan hold about $10 billion in savings for its nearly 1 million employee participants.

The plaintiffs' theory – unsupported by any actual facts – is that Wal-Mart shortchanged its plan participants by choosing investment funds that allegedly charged excessive administration fees. The district court tossed the case, noting that the plan participants were free to choose other options outside the plan and to decide whether they thought the fees were unreasonable. The plaintiffs now appeal that decision in the Eighth Circuit.

If the lawsuit prevails, the plan participants might receive, at most, mere dollars in compensation.  But the attorneys representing them stand to earn tens of millions in attorneys fees.

And, as NCLC explained in its amicus brief, this lawsuit is just the tip of the iceberg; the plaintiffs bar is hoping to turn this novel legal theory into their newest cash cow – between September 2006 and November 2007, at least eighteen virtually identical lawsuits were filed against major employees.

So what impact will this litigation have on employees – whose interests the plaintiffs' bar is allegedly protecting? Most likely, it will be harder and less likely for employers to sponsor retirement plans. A victory in this case would expose employers that choose to offer carefully selected and negotiated retirement plans to incredible litigation risks.

Fortunately, there's a bright light: the Seventh Circuit recently declared that these 'fee disclosure' lawsuits are meritless. The Eighth Circuit should follow the Seventh Circuit's lead and bring some rationality to ERISA litigation.

You can check out NCLC's amicus brief in Braden v. Wal-Mart on our website.