BP should have warned employees to dump stock, complaint claims

Steve Korris Sep. 27, 2011, 3:59am


HOUSTON – No employee ever knocked an employer as hard as BP employees knock the company in federal court.

Their lawyers heaped scorn on BP on Sept. 23, to support a claim that the company should have warned employees to dump its stock from their retirement plans.

"BP's Texas City refinery explosion in March 2005, which killed 15 workers, was one of the worst industrial accidents in American history," a team of 16 lawyers wrote. "Subsequent tragedies and narrowly averted accidents then followed."

"Significantly, these accidents, including the Deepwater Horizon, are linked to internal BP policies putting profits before safety," they wrote.

"These incidents culminated in the fateful Deepwater Horizon explosion, which killed several BP workers, unleashed an environmental catastrophe in BP's largest market, and branded the company as an international pariah."

They wrote that their complaint "chronicles BP's abhorrent safety record and describes how the defendants turned a blind eye to BP's systemic safety problems and the lessons learned from BP's prior accidents and disasters from 2002 forward, while reassuring the public and participants of BP's commitment to improving its safety culture."

"Despite these reassurances, several decisions in the days leading up to the Deepwater Horizon explosion were based on an effort to save time or money, regardless of safety implications," they wrote.

Earlier this year, the legal team filed a consolidated complaint on behalf of current and former employees in national proceedings before U. S. District Judge Keith Ellison in Houston.

BP moved to dismiss it, arguing no one breached a fiduciary duty.

Lawyers for the employees opposed BP's motion on Sept. 23, alleging failures not only among fiduciaries but also among "de facto fiduciaries."

They wrote that the board of BP North America had fiduciary responsibility to monitor fiduciaries in a pension oversight committee.

They wrote that board members were fiduciaries for at least three reasons and that BP North America was a de facto fiduciary. They wrote that former chief executive Anthony Hayward was a fiduciary for at least two reasons.

"Plaintiffs allege that defendants' fiduciary breaches caused the plans' losses and nothing more is required at this stage of the litigation."

They didn't indicate the amount of the losses they claim.

"Indeed, prior to discovery it would be impossible for participants to allege exactly which entities took what steps in plan administration and management, and it would be unreasonable to hold participants to such a standard," they wrote.

Mark Lanier of Houston filed the brief for liaison counsel and an executive committee.

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