Johnson & Johnson employees who trusted the company with their retirement savings by investing in the company’s stock are suing the consumer health care giant. They accuse the company of overvaluing its stocks while hiding the fact that its talcum powder products contained cancer causing asbestos, according to a proposed class action complaint filed in New Jersey federal court, Law360 reported.
Lead plaintiff Michael Perrone claims that J&J and some of its senior executives violated the Employee Retirement Income Security Act (ERISA) by failing to act in the best interest of their retirement plans because they knew for decades that the talc in some of the company’s products contained asbestos but never told the public.
“Defendants had ample authority, and every opportunity to correct the record and make the truth about asbestos in Johnson & Johnson’s talc products known to the public,” Perrone’s lawsuit states. “Had they done so, the plans’ participants could have avoided millions of dollars of losses from the loss in value of the Johnson & Johnson stock in their plan accounts.”
According to the lawsuit, a fiduciary with the best interests of plan participants in mind would have known that corrective disclosures would have caused less harm to the plans as early as April 2017, when it became apparent to executives that evidence disclosed in trials involving asbestos contamination claims with its talcum powders would reveal the company was hiding the fact that its powders contained asbestos. Instead, the company chose to make false statements about the presence of asbestos in its products.
In December, Reuters reported that Johnson & Johnson’s top executives had known for decades that the talc it used in its products contained asbestos, a known carcinogen. The company’s stock value dropped 10 percent shortly after the story ran – representing a $30 billion loss in the company’s market value, Perrone’s lawsuit contends.
Johnson & Johnson faces more than 9,000 lawsuits alleging its talc containing products like Johnson’s baby powder and Shower to Shower body powder caused ovarian cancer and mesothelioma. Many of those lawsuits name asbestos as the culprit.