A federal judge in Philadelphia ruled Monday that a lawsuit alleging discount retailer Five Below defrauded investors can move forward as a class action on behalf of numerous shareholders.
U.S. District Judge Gerald Austin McHugh’s 34-page order handed a win to the lead plaintiffs, two Arkansas public employee retirement plans. The pension funds say that for more than a year, Philadelphia-based Five Below misled investors about its ability to identify and stock popular products — a skill company executives referred to as their “secret sauce.”
Once investors learned the full extent of the company’s challenges in July 2024, Five Below’s stock price plummeted, wiping out almost $8 billion in shareholder value, the suit says. The company’s CEO resigned around that time.
The Arkansas Public Employees’ Retirement (APER) and the Arkansas Teacher Retirement System say they lost more than $5 million combined due to the alleged fraud.
McHugh granted their motion asking him to certify a class of people and entities who bought Five Below stock between December 2022 and July 2024.
“We are pleased to be able to represent the interests of these public pension funds, where teachers and other public servants were invested in this company and lost a considerable amount of money,” Michael Dell’Angelo, executive shareholder and general counsel of Philadelphia-based law firm Berger Montague, said in a statement.
“Our clients lost millions of dollars after they relied on the exaggerated expectations set by this retailer,” he said.
Five Below has 1,800 stores in 44 states and says most of its products are priced between $1 and $5, many of them aimed at children and teens. The company didn’t respond to a request for comment. Attorneys for Five Below and two other defendants — former CEO Joel Anderson and chief operating officer Kenneth Bull — didn’t respond to requests for comment.
The defendants have denied the allegations in court papers.
“Being honest with the market about the pitfalls of a business strategy as they are learned in no way reveals advance knowledge that the approach would fail, and failing to make accurate predictions does not amount to securities fraud,” Jay A. Dubow and Erica H. Dressler of the Philadelphia firm Troutman Pepper Locke LLP wrote in a court filing last year.
The suit alleges that despite management’s repeated assertions that Five Below could identify and capitalize on trends, the company in fact “did not operate with any real ability to stock its stores with in-demand products.”
Nevertheless, Five Below told investors it planned to triple its number of locations and double its sales based on this “trend-right” strategy, the suit says. The “plan was abruptly throttled down” shortly after Anderson, the CEO, resigned in July 2024, according to the complaint.
Even as Five Below’s problems with product assortment, inventory, and expansion dragged on its operating performance, executives falsely blamed shoplifting, the suit says.
The company eventually allegedly admitted its shortcomings in a series of disclosures to investors, with executive Bull conceding in late 2024 that Five Below had “lost our way.”
While investors suffered losses, Bull and Anderson sold more than $9 million in Five Below shares during the period in question, “while also receiving incentive compensation valued at over $10 million based on the inflation in the company’s share price,” the suit says.
The company has since rebounded, with executives citing the popularity of games and viral toys, as well as artificial-intelligence tools that help with inventory.
New Jersey Attorney General Jennifer Davenport filed the state’s fourth open lawsuit against Amazon on Tuesday, accusing the tech giant of creating worse work conditions for lower pay through its “anticompetitive” delivery driver network.
“Today, my office is acting to stand up for thousands of New Jersey delivery drivers who are being exploited every day by one of the world’s biggest, richest corporations,” Davenport said at a news conference.
The suit homesin on Amazon’s Delivery Service Partners (DSPs) program, which the company advertises as an opportunity for prospective entrepreneurs to open their own business while partnering with the tech giant by managing a local system of drivers. But these businesses are beholden to Amazon, Davenport argues, and the tech giant’s system prevents drivers from unionizing or getting better work conditions.
“These are the workers who bring Amazon packages to our front doors,” she said. “They often show up in Amazon vans, wearing Amazon vests, carrying boxes with the Amazon logo on them. And in our view, they are working longer hours in worse conditions and for less money because of Amazon’s anticompetitive behavior.”
These drivers earn “significantly less” than drivers for UPS, FedEx, and the U.S. Postal Service, according to the complaint.
The complaint describes a work environment of employee surveillance, union busting, and drivers having no choice but to urinate in water bottles to meet Amazon’s metrics.
“They must accept invasive surveillance that monitors their every moment and action while at work and face the possibility of immediate termination for the smallest infraction or failure to meet these unreasonable requirements,” the complaint states.
Steve Kelly, a spokesperson for Amazon, pushed back strongly on the claims made in the suit and accused Davenport of choosing to hold a news conference rather than seeking a greater understanding of the program.
“This complaint is not grounded in fact. The Attorney General’s characterization of the DSP Program and the claims about working conditions are just wrong. The truth is, DSPs are independent business owners who make their own decisions about hiring, fleet management, and capacity planning — and they choose whether to work with other companies besides Amazon,” Kelly said in a statement.
“Had the Attorney General bothered to look at the facts, they would have also seen that the vast majority of routes are finished on-time or early — built on real-world data accounting for stop complexity, traffic, and geography. DSPs manage their drivers’ workday and route execution, and DSP employees are free to choose their employer and associate with who they want, full stop.”
Kelly said the company was confident that it would prevail in court.
On its website, Amazon advertises the DSP program as providing “the unique opportunity to create jobs in your neighborhood and lead a team that delivers gifts, textbooks, and pet food to your community.”
But Davenport’s office argues that the DSPs “are anything but independent.”
“Rather, Amazon keeps control of the levers that matter — setting demanding operational requirements, monitoring driver performance, controlling route allocations, and restricting DSPs from hiring one another’s drivers — with exploitative consequences for the drivers themselves,“ her office said in a release.
Amazon did not immediately respond to a request for comment on the suit.
Davenport also alleges that Amazon monitors DSP workers with artificial intelligence and cameras inside the vehicles they drive, and that the company has intimidated and retaliated against drivers who were suspected of union organizing.
The complaint cites an incident in Queens, N.Y., in which Amazon allegedly sent drones to blacklist striking workers. It also cites an instance in Edison where workers were allegedly told that labor organizing could endanger DSP’s partnership with Amazon, putting their jobs in jeopardy.
The suit claims also accuses Amazon of blacklisting workers who support unionization from a broad network of DSPs, and cites workers who were terminated after their bosses learned they supported labor organizing.
Amazon is the dominant purchaser of this delivery driver labor, and since it is about buying rather than selling, their alleged anticompetitive practice is called a monopsony, rather than a monopoly. Davenport’s office said this is the first time a state has filed a monopsony complaint.
It adds to a list of court battles with the company.
In September 2023, former Attorney General Matthew Platkin joined the Federal Trade Commission and other states in suing the tech giant for allegedly maintaining a monopoly. Last October, Platkin filed one complaint over the company’s treatment of pregnant people and workers with disabilities, and another over how Amazon classifies certain workers as independent contractors and therefore denies them rights and benefits.
Davenport’s lawsuit Tuesday is the first lawsuit against Amazon filed under Democratic Gov. Mikie Sherrill’s administration, but the state’s top lawyer said the three other cases are ongoing.
The complaint, filed in the U.S. District Court for the District of New Jersey, alleges violation of the federal Sherman Antitrust Act and New Jersey’s Antitrust Act and seeks damages for DSP drivers and for Amazon to stop the alleged behavior.
Employees of the Fabric Workshop and Museum in Philadelphia adopted their first union contract this month, joining a wave of museum worker organizing in recent years.
The 22 workers covered by the new contract are represented by the AFSCME District Council 47, Local 397, and work in visitor services, education, marketing, and communications roles, among other jobs.
“The Fabric Workshop and Museum’s commitment to creating a space of artistic experimentation is propelled by its staff, who bring a unique sense of creativity and care to their work,” Local 397 president Halcyone Schiller said. “Our collective bargaining agreement ensures that on-the-job protections and pay structures will enable staff to continue to do this exciting work for years to come.”
The museum voluntarily recognized the union in May 2025, and bargaining started in October. The workers ratified the new contract on July 23, a spokesperson for the Fabric Workshop and Museum confirmed.
Aeniah Godwin (center) and Saoni Lorenzo (right) participate in a sewing workshop at the Fabric Workshop and Museum in Philadelphia as part of a 2023 internship through the Greater Philadelphia Cultural Alliance.
The three-year contract went into effect Aug. 1 and includes raises, as well as a guarantee that internal candidates get preference during hiring for union jobs.
Under the new union contract, the minimum annual salary increased to $45,000 from $40,000, and the minimum hourly wage is increasing to $17 from $16.
Over the course of the contract, salaried employees will see an 11% pay increase as well, according to a spokesperson for the Fabric Workshop and Museum. The starting hourly wage will increase to $18.04 over the course of the three-year contract, the spokesperson said.
Workers are also guaranteed “at least one dedicated, annual professional development opportunity focused on core museum or studio skills,” the spokesperson said, as part of the new agreement.
“The negotiation process called on us to work together with kindness and respect to achieve the best outcome for our staff and the institution we all care for deeply,” said Kelly Shindler, executive and artistic director of the Fabric Workshop and Museum. “This contract proudly affirms our commitment to artists — first and foremost those on our staff — and to fostering a vibrant and accountable organization.”
The Korean-owned yard’s leaders thought they had found just the place, four miles by barge down the Delaware River at the New Jersey-funded Paulsboro facility, vacated by the offshore wind industry when President Donald Trump killed that program. In December, Hanwha agreed to take over the lease.
Philadelphia Shipyard as seen from southbound I-95 expressway in 2024.
This despite the fact Hanwha’s proposal enjoyed support from federal, state and local officials and even made it into the U.S. military budget for fiscal year 2026, which called for $110 million “to support shipbuilding industrial capacity” and steel fabrication in a manufacturing facility “formerly used for offshore wind manufacturing.”
Paulsboro Mayor John Giovannitti estimates that on a given day, there are fewer than 50 workers at the port.
Leo Holt, whose century-old company runs ports in Gloucester City and South Philadelphia, said he’s not completely averse to manufacturing around the Paulsboro terminal after his family’s plans to beef up container and bulk shipping there accelerate.
Hanwha declined to comment, confirming only that the shipyard is still looking for space “in the U.S.”
A rendering of a 600-acre shipyard that the Port of Tampa Bay has offered to build for Hanwha.
What went wrong?
Since the early 2010s, New Jersey borrowed and spent more than $500 million building a Paulsboro wharf, highway ramps and other facilities to attract big employers to the port. It replaced lost oil industry jobs and also compensated for nearby Camden’s loss of piers due to Holtec Inc.’s redevelopment in that city’s aging port district.
In borrowing documents and news releases, the public spending was justified by predictions that the port would draw hundreds, even thousands, of port and industrial jobs, which in more than a decade have yet to arrive.
Paulsboro sublets the facility to Holt as the port operator. Holt paid $1.6 million to use the property last year.
At the urging of then-Gov. Phil Murphy, then-State Senate President and iron workers union leader Steve Sweeney, then-Paulsboro Mayor John Burzichelli and other officials, Holt in 2020 agreed to let EEW, a global pipemaker based in Germany, build supports up to 400 feet long and 40 feet across for the federally subsidized offshore wind-electric generation facilities that its Danish partner Orsted planned to locate off the New Jersey coast.
Orsted canceled in 2023, citing rising costs. Trying to cut his company’s losses, EEW executive vice president Esben Strandgaard began looking for new tenants, attracting more than 200 inquiries and initiating talks with Hanwha.
Hanwha needed the landlord’s permission to take over the lease. Hanwha Defense USA President Tom Anderson, a retired Navy rear admiral, and the Holts met last fall to discuss the proposal.
Instead of approving, the Holts sued, challenging EEW’s authority to pick a replacement and demanding control of the facility.
Hanwha, aided by its political supporters, tried to make a deal, but Holt stood firm. In March, Hanwha canceled the agreement.
What the Holts want
“The north star for redevelopment at Paulsboro has been marine terminal operations,” said Leo Holt, president of the Gloucester City-based company. “We stretched to assist the state in any way we could,” but “Hanwha was never a part of the plan, nor was shipbuilding.”
Holt spoke of the failed industrial proposals — wind, shipbuilding, and others to build power plant equipment on site — as an obstacle, not a goal.
“The detour imposed on New Jersey is over, and the road is clear to the Paulsboro Marine Terminal,” he said. “We were glad to see that the page was turned on the detour.”
Holt Logistics, which has been expanding containerized cargo facilities on both sides of the river, has shipped containers to Paulsboro and hopes to augment Paulsboro’s current port tenants, Holt said.
Those include Novolipetsk Steel (NLMK), owned by Russian billionaire Vladimir Lisin, which due to Ukraine war sanctions stopped importing Russian steel through the port for its plant in Farrell, Pa., and has switched to steel from Latin America, East Asia, and other countries, according to Holt.
The port also ships containers to the U.S. Navy base in Rota, Spain, and to ports in Cyprus, Israel, and other Mediterranean countries.
More than a container port
New Jersey has spent more than half a billion dollars improving the Paulsboro site with a wharf, highway connections to I-295, and other public works, the mayor said.
“I’m not aware of Paulsboro people, Gloucester County people, working there right now,” said Burzichelli, now a state senator and a supporter of both the wind and the Hanwha projects.
New Jersey invested in the BP site to make it more than a container port, Burzichelli says.
“That [state-built] wharf was designed to handle any industry, and the public investment was designed to create the maximum amount of high-paying jobs that can be created,” he said.
The port section “was always intended to be a bulk port,” requiring plenty of longshoremen’s labor, and “certainly not a container port,” which “take up a lot of space but don’t generate big jobs,” Burzichelli said.
“They don’t pay taxes the way an [industrial] building will pay,” he added.
The Holts’ “choices and the interest of the state of New Jersey, the interests of Gloucester County, and the interests of the borough of Paulsboro, are not aligned, at this point,” Burzichelli said. “I hope we can get them aligned.”
Mayor Giovannitti said, “We thought we had a deal last year with Hanwha” but are left with “a $750,000 hole in our budget” — the annual payment, in lieu of taxes, that EEW and its partners paid the borough while it was operating. The town’s annual budget is $13 million.
Instructors and graduates of the union-backed preapprenticeship program Global Skills Union Pathways Project at Philly Hanwha Shipyard in February.
What Paulsboro could offer
Strandgaard says he’s not surprised Hanwha decided not to “waste any more of their time” on Paulsboro: “They could not see themselves working with a hostile landlord.”
It’s an ideal site for shipbuilding or any other industry that needs a deep water port, he said. But “Holt Logistics really controls what comes in and out. This was very upsetting, for us and Hanwha, that Hanwha with the support of the Navy did not have enough leverage.”
Other East Coast sites would take a year or more to prepare. “The beauty of Paulsboro is they could start the day after” concluding a deal, Strandgaard said.
He said he was surprised the new administration of New Jersey Gov. Mikie Sherrill didn’t make landing Hanwha a priority.
Sherrill was “disappointed that EEW could not reach an agreement with Hanwha or other parties despite the state’s efforts to facilitate discussions and bring stakeholders together,” spokesperson Maggie Garbarino said in a statement.
Holt’s goal: A modern marine terminal
On any given day, between 500 and 900 Holt employees are moving cargo at the company’s South Jersey operations, Holt said. He declined to estimate how many of those were in Paulsboro.
According to tax records, the port handled about 250,000 tons of cargo last year. That’s less than one-tenth of all South Jersey Port Corp. cargoes.
Holt called the state “vital partners in the renovation of the facility. We are working to have both marine operations and manufacturing operations. But we cannot be deterred from taking it where we promised: to be an active modern marine terminal.”
He said he expects the Sherrill administration will prove to be more congenial to the Holts’ vision for the property — “manufacturing, distribution, or anything” that makes sense to his family.
South Jersey officials say they haven’t given up. “The people of Paulsboro were told this was about jobs, jobs, jobs, and those would be manufacturing jobs. Not stacking containers four high with automated forklifts,” Giovannitti said.
Burzichelli still hopes Hanwha and Holt can be brought to the same page. “Many of us still don’t think we are done with manufacturing,” he said.
