July 26, 2026  ·  Complaint filed July 15, 2026  ·  United States District Court for the Northern District of Illinois, Eastern Division, No. 1:26-cv-08375

Newman News, By David Brunk

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Jon C. Fredbeck v. Medline Industries Alleges Defendants kept $97 million in underperforming TRP Growth Stock

Jon C. Fredbeck and Colt R. Nelms, individually and on behalf of approximately 30,000 current and former employees and beneficiaries, filed a class action complaint on July 15, 2026, alleging that Medline and its fiduciaries breached their duties under the Employee Retirement Income Security Act by retaining an underperforming T. Rowe Price Growth Stock investment option that cost plan participants "tens of millions of dollars" in retirement savings (Compl. ¶122, ¶143). The complaint emphasizes the gravity of the alleged breaches, stating, "ERISA’s fiduciary duties are ‘the highest known to the law.’" (Compl. ¶35).

The complaint names Medline Industries, LP, its Board of Directors, the Medline Industries, LP Qualified Plans Committee, and the Plan Administrator as defendants (Compl. ¶1). The complaint alleges that the T. Rowe Price Growth Stock strategy, selected as the Plan’s large-cap growth investment option on or before 2009, underperformed its benchmark and comparable funds over 3-, 5-, and 10-year periods (Compl. ¶4, ¶10, ¶121). The filing further asserts that "persistent long-term underperformance relative to that benchmark is therefore a significant fiduciary red flag" (Compl. ¶9).

The plaintiffs contend that "no prudent fiduciary would have retained the investment option, like Medline has, throughout the Class Period," and seek to hold the defendants personally liable for plan losses under 29 U.S.C. § 1109(a) (Compl. ¶127, ¶41). Plaintiffs also allege that "Defendants owed a fiduciary duty to remove the TRP Growth Stock investment option within a reasonable time after it manifested poor performance" (Compl. ¶126).

Selection and Retention of the T. Rowe Price Growth Stock Strategy in the Medline 401(k) Plan

The complaint alleges that on or before 2009, the Medline Industries, LP Qualified Plans Committee selected the T. Rowe Price Growth Stock strategy as the Plan’s sole large-cap growth investment option. According to the filing, the strategy’s core characteristics—an actively managed, large-cap growth portfolio benchmarked against the Russell 1000 Growth Index—remained unchanged throughout its tenure in the Plan, despite subsequent changes to its investment vehicle (Compl. ¶4, ¶5). The TRP Growth Stock strategy is described as employing a bottom-up fundamental research process for stock selection, with a minimum market capitalization threshold of $4 billion for its holdings (Compl. ¶64).

The TRP Growth Stock strategy is further described as an actively managed fund with approximately 80% of its assets invested in large-capitalization companies (Compl. ¶67). The complaint quotes the fund’s disclosure materials, stating that "T. Rowe Price charges fees for active management on the premise that it can pick a mix of stocks that beat the benchmark" (Compl. ¶48). Medline offered the strategy to Plan participants through both mutual funds and collective trusts (Compl. ¶62).

Plaintiffs contend that the Plan Committee’s selection and continued retention of the TRP Growth Stock strategy violated ERISA’s prudence standard, as the strategy consistently underperformed its benchmark and comparable funds over multiple time horizons. The complaint alleges that the Defendants failed to replace the strategy with any of the hundreds of better-performing large-cap growth alternatives available (Compl. ¶11, ¶12). The filing highlights that the TRP Growth Stock strategy’s investment process, which relies on bottom-up fundamental research, failed to justify its fees or performance relative to its benchmark and peers (Compl. ¶64).

Underperformance of the TRP Growth Stock Strategy: 2019–2025

The complaint alleges that by December 31, 2019, the T. Rowe Price Growth Stock strategy underperformed its benchmark, the Russell 1000 Growth Index, and six comparator funds over rolling 3-, 5-, and 10-year periods (Compl. ¶10, ¶114). According to the filing, this underperformance was not an isolated event but reflected "a sustained inability to add value relative to its own stated benchmark," which the complaint describes as "a significant fiduciary red flag" (Compl. ¶10, ¶9).

The complaint contends that the TRP Growth Stock strategy's persistent underperformance should have triggered a duty to remove or replace it, citing the availability of hundreds of better-performing large-cap growth alternatives (Compl. ¶11, ¶12). The filing states that the Defendants had access to performance data tracking the strategy’s returns against its benchmark and comparator funds, yet took no action to address the underperformance (Compl. ¶121). Comparator funds referenced in the complaint include the Fidelity Blue Chip Fund (FBGKX), which allocates 84% of its assets to large-cap stocks and 46% to growth-oriented stocks, and the Fidelity Growth Company Fund (FGCKX), which invests at least 85% of its assets in blue-chip companies (Compl. ¶78, ¶84). Additional comparators include the JPMorgan Large Cap Growth Fund, which invests at least 80% of its net assets in Russell 1000 Growth Index-sized companies, the Alger Fund, which maintains a 50-stock concentrated portfolio, and the Voya Russell Large Cap Growth Index Port I Fund, which allocates 90% of its assets to large-cap stocks (Compl. ¶91, ¶98, ¶104).

Plan Assets and Investments in the TRP Growth Stock Strategy

The complaint alleges that as of December 31, 2024, the Medline Industries, LP 401(k) Plan had over $1.6 billion in total assets, with approximately $97 million (~6%) invested in the T. Rowe Price Growth Stock strategy.

The complaint alleges that the Defendants’ failure to remove the underperforming strategy violated their fiduciary duties under ERISA, as the TRP Growth Stock strategy consistently trailed its benchmark and comparable investment options over multiple time horizons (Compl. ¶11, ¶122).

"The failure to remove the TRP Growth Stock investment option cost Plan participants tens of millions of dollars in retirement savings," the complaint alleges (Compl. ¶122). Plaintiffs further assert that participants "would have substantially more dollars in retirement savings had Defendants replaced the TRP Growth Stock investment option" with any of the hundreds of better-performing large-cap growth alternatives available (Compl. ¶124).

The complaint highlights that the TRP Growth Stock strategy’s underperformance was not isolated but persisted over 3-, 5-, and 10-year periods, which Plaintiffs argue should have triggered a duty to remove it under ERISA’s "continuing duty" to monitor and replace imprudent investments. The filing states that "persistent long-term underperformance relative to that benchmark is therefore a significant fiduciary red flag" (Compl. ¶9).

Parties: Plan Participants, Fiduciaries, and Comparator Fund Providers

The complaint names two individual plaintiffs—Jon C. Fredbeck and Colt R. Nelms—who sue both individually and as class representatives for approximately 30,000 participants and beneficiaries of the Medline Industries, LP 401(k) Plan. According to the filing, the class includes current and former employees of Medline Industries, LP, along with their beneficiaries, who held accounts in the Plan during the proposed class period beginning July 15, 2020 (Compl. ¶1).

Defendants include Medline Industries, LP, described as both the Plan sponsor and a fiduciary; the Board of Directors of Medline Industries, LP; the Medline Industries, LP Qualified Plans Committee; and the Medline Industries, LP Qualified Plans Committee Plan Administrator. The complaint alleges that "the Medline Defendants are all fiduciaries to the Medline Plan," exercising discretionary control over Plan assets and investment options (Compl. ¶2, ¶27, ¶39).

The filing identifies several non-party entities that serve as investment advisers or benchmark providers for funds referenced in the complaint. T. Rowe Price is named as the investment adviser for the TRP Growth Stock strategy, the Plan’s large-cap growth investment option that the complaint alleges underperformed its benchmark and comparable funds. Fidelity is identified as the adviser for comparator funds, including the Fidelity Blue Chip Fund (FBGKX) and the Fidelity Growth Company Fund (FGCKX), which the complaint cites as better-performing alternatives to the TRP Growth Stock strategy. FTSE Russell is listed as the provider and maintainer of the Russell 1000 Growth Index, the benchmark against which the TRP Growth Stock strategy’s performance is measured. Additional non-party fund providers—JPMorgan, Alger Fund, and Voya—are referenced as offering comparator funds that the complaint alleges outperformed the TRP Growth Stock strategy during the relevant period.

Counts I and II: Breach of Fiduciary Duty Under 29 U.S.C. §§ 1104(a)(1)(A), (B), 1109(a)

The complaint alleges that Medline Industries, LP and its fiduciaries—the Board of Directors, the Qualified Plans Committee, and the Plan Administrator—breached their duties under the Employee Retirement Income Security Act (ERISA) by failing to monitor and remove an underperforming investment option from the company’s 401(k) Plan. Count I asserts that Defendants violated their duty to prudently monitor and remove the T. Rowe Price Growth Stock strategy ("TRP Growth Stock"), which the complaint describes as persistently underperforming its benchmark and comparable funds over multiple periods. Count II alleges that Defendants breached their duty to prudently select and retain the TRP Growth Stock strategy in the first place. Together, the counts form the core of the Plaintiffs’ claim that the Defendants’ conduct was "imprudent" and caused "tens of millions of dollars" in losses to Plan participants (Compl. ¶15, ¶122).

ERISA imposes a "continuing duty" on fiduciaries to monitor Plan investments and remove those that become imprudent, a duty the complaint argues is "separate and apart from the [fiduciary’s] duty to exercise prudence in selecting investments." The complaint cites precedent for the proposition that fiduciaries must act with "care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity... would use" (Compl. ¶138). Plaintiffs allege that the Defendants failed to meet this standard by retaining the TRP Growth Stock strategy despite its chronic underperformance relative to the Russell 1000 Growth Index and six comparator funds over 3-, 5-, and 10-year periods. By December 31, 2019, the TRP Growth Stock strategy had underperformed all comparator funds, and its underperformance persisted through the Class Period, which began on July 15, 2020 (Compl. ¶114, ¶117).

The complaint contends that no prudent fiduciary would have retained the TRP Growth Stock strategy under these circumstances. "No prudent fiduciary would have retained the investment option, like Medline has, throughout the Class Period," the complaint alleges (Compl. ¶127). Plaintiffs further assert that the Defendants’ failure to act was not merely a passive oversight but a breach of their duty to engage in an "imprudent process for investigating, evaluating, and monitoring investments" (Compl. ¶140). The complaint highlights that the Plan’s assets totaled over $1.6 billion as of December 31, 2024, with approximately $97 million invested in the TRP Growth Stock strategy. Plaintiffs allege that had the Defendants replaced the TRP Growth Stock strategy with any of the hundreds of better-performing large-cap growth alternatives available, Plan participants would have avoided losses amounting to "tens of millions of dollars" (Compl. ¶122, ¶124).

Under 29 U.S.C. § 1109(a), the complaint seeks to hold the Defendants personally liable for the Plan’s losses, arguing that their breaches of fiduciary duty directly resulted in damages to the Plan. The statute provides that any fiduciary who breaches their duties "shall be personally liable to make good to such plan any losses to the plan resulting from each such breach" (Compl. ¶41). Plaintiffs request that the Court adjudge the Defendants liable for these losses, order them to restore all losses and profits to the Plan, and remove any breaching fiduciaries from their roles in the Plan. The complaint also seeks reformation of the Plan to include only prudent investments and an award of reasonable attorney’s fees, costs, and interest under 29 U.S.C. § 1132(g)(1).

Co-Fiduciary Liability and Failure to Monitor Under ERISA

The complaint alleges two additional causes of action against the Defendants: Co-Fiduciary Liability under ERISA (29 U.S.C. § 1105(a)) and Failure to Monitor Fiduciaries under ERISA (29 U.S.C. § 1104). Under the Co-Fiduciary Liability claim, the complaint contends that Medline Industries, LP, its Board of Directors, and the Plan Committee are liable for breaches committed by co-fiduciaries in their oversight of the Plan. The filing asserts that the Defendants "failed to monitor, investigate, and replace the TRP Growth Stock strategy" despite its persistent underperformance, thereby enabling the Plan’s losses (Compl. ¶139).

The Failure to Monitor Fiduciaries claim alleges that Medline, the Board, and any Defendant with appointment or monitoring authority failed to fulfill their duty to oversee the Plan Committee and other fiduciaries. The complaint cites precedent for the principle that ERISA fiduciaries have a duty to monitor investments and remove imprudent ones, a duty the Defendants allegedly ignored. According to the filing, the Defendants’ failure to act "led to Plan losses" and breached their obligation to ensure the Plan’s investments were prudently managed (Compl. ¶149-150).

The complaint alleges that the Defendants "failed to monitor fiduciaries and appointees," allowing the TRP Growth Stock strategy to remain in the Plan despite its underperformance relative to the Russell 1000 Growth Index and comparator funds (Compl. ¶149). The filing emphasizes that this duty is ongoing, quoting ERISA’s prudence standard: fiduciaries must exercise "care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity... would use" (Compl. ¶138). The complaint contends that no prudent fiduciary would have retained the TRP Growth Stock strategy throughout the Class Period, given its nearly 65% underperformance from 2020 to 2025 (Compl. ¶117, ¶127).

Plaintiffs seek to hold the Defendants personally liable for the Plan’s losses under 29 U.S.C. § 1109(a), which provides that fiduciaries "shall be personally liable to make good to such plan any losses to the plan resulting from each such breach." The complaint alleges that the Defendants’ failure to replace the TRP Growth Stock strategy cost Plan participants "tens of millions of dollars" in retirement savings (Compl. ¶122). As relief, Plaintiffs request the removal of breaching fiduciaries and reformation of the Plan to include only prudent investments, alongside restitution and disgorgement of profits. Additionally, Plaintiffs seek a surcharge against the Defendants for ERISA violations and an accounting of Plan losses (Relief ¶8, ¶6).

Alleged Losses of Tens of Millions and Request for Relief Under 29 U.S.C. § 1132(a)(2)

The complaint alleges that the Defendants’ failure to remove the T. Rowe Price Growth Stock strategy from the Medline Industries, LP 401(k) Plan cost participants "tens of millions of dollars in retirement savings" (Compl. ¶122). According to the filing, the TRP Growth Stock strategy’s persistent underperformance relative to its benchmark and comparator funds from 2020 to 2025 resulted in significant losses for the approximately $97 million invested in the option as of December 31, 2024. Plaintiffs contend that "participants would have substantially more dollars in retirement savings had Defendants replaced the TRP Growth Stock investment option" with any of the hundreds of better-performing alternatives available (Compl. ¶124).

The complaint cites a hypothetical comparison used to illustrate the alleged losses over the period from January 1, 2020, to December 31, 2025 (Compl. ¶123). Plaintiffs argue that the Defendants’ inaction violated their "continuing duty" under ERISA to monitor and remove imprudent investments, and that no prudent fiduciary would have retained the underperforming option throughout the Class Period (Compl. ¶127). The filing asserts that the Plan suffered "tens of millions of dollars" in damages as a direct result of these breaches (Compl. ¶143).

To remedy these alleged violations, Plaintiffs seek relief under 29 U.S.C. § 1132(a)(2), including an adjudication that the Defendants breached their fiduciary duties and are personally liable for the Plan’s losses under 29 U.S.C. § 1109(a). The complaint quotes the statute’s mandate that fiduciaries are "personally liable to make good to such plan any losses to the plan resulting from each such breach" (Compl. ¶41). Plaintiffs request that the Court order the Defendants to restore all losses and profits to the Plan, remove any breaching fiduciaries from their roles, and reform the Plan to include only prudent investments. Additionally, they seek certification of the action as a class action under Federal Rule of Civil Procedure 23, with Jon C. Fredbeck and Colt R. Nelms appointed as class representatives, and an award of reasonable attorney’s fees, costs, and interest under 29 U.S.C. § 1132(g)(1). Plaintiffs also request an accounting of Plan losses and a surcharge against the Defendants for ERISA violations (Relief ¶6, ¶8).

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.