Chicago Judge Allows ESOP Class Action Suit Against West Monroe Partners

Consulting firm accused of undervaluing stock and shortchanging workers cashing out of employee stock ownership plan

Apr. 2, 2026 at 9:55pm

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A photorealistic studio still life featuring a stack of financial documents, a calculator, and a pen arranged elegantly on a clean white background, conceptually representing the abstract corporate strategy and finance issues at the heart of an ESOP valuation dispute.A legal dispute over the valuation of an employee stock ownership plan reveals the complex financial risks and transparency issues facing private company workers.West Monroe Today

A federal judge in Chicago has certified a class of former employees suing the consulting firm West Monroe Partners, allowing their claims to proceed collectively. The plaintiffs allege that the company undervalued its stock and shortchanged workers cashing out of its defined contribution employee stock ownership plan (ESOP) in 2021, before selling a 50% stake at a much higher valuation to a private equity firm.

Why it matters

The decision highlights the growing scrutiny on ESOPs, particularly those in private companies, where valuations can be less transparent than in public markets. Such plans can expose workers to significant risk if valuations are inaccurate or influenced by company insiders, as alleged in this case.

The details

The complaint centers on a striking discrepancy - weeks after employees were paid out at $515.18 per share for their ESOP shares in 2021, West Monroe sold a 50% stake in the company to a private equity firm at $1,616 per share, more than three times the earlier valuation. The plaintiffs argue the earlier valuation 'grossly undervalued' the company and that fiduciaries failed to act prudently or disclose key information that might have influenced employees' decisions to sell.

  • In March 2026, U.S. District Judge John Robert Blakey certified the class action lawsuit against West Monroe Partners.
  • The employees sold their ESOP shares in 2021 based on a company valuation of $515.18 per share.
  • Weeks later, West Monroe sold a 50% stake in the company to a private equity firm at $1,616 per share.

The players

West Monroe Partners Inc.

A consulting firm charged with shortchanging workers who cashed out of its defined contribution employee stock ownership plan.

Matthew Daly

A former employee of West Monroe Partners and the lead plaintiff in the class action lawsuit.

John Robert Blakey

The U.S. District Judge presiding over the class action lawsuit against West Monroe Partners.

Daniel Aronowitz

The assistant secretary of Labor and current head of the Employee Benefits Security Administration, who has sworn to 'end the war on ESOPs'.

Sanford Heisler Sharp McKnight LLP and Berger Montague P.C.

The law firms representing the plaintiffs in the class action lawsuit.

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What’s next

The case now moves into the next phase of litigation, in which the merits of the plaintiffs' claims - whether the valuation process was flawed and whether fiduciary duties were breached - will be tested.

The takeaway

This case highlights the growing scrutiny on ESOPs, particularly in private companies where valuations can be less transparent. It raises concerns about the risk exposure for workers if valuations are inaccurate or influenced by company insiders, and the need for greater oversight and transparency in ESOP transactions.