Fortunately, the description of the achievement can be taken quite literally. You do not need to play a level with 4 players, merely complete
a level with 4 players. This is local only, so assuming you do not have three other people wanting to play this game with you (it's not bad, but it sure ain't great), do this:
Play any level without a boss battle. The first level has a boss battle but the next two levels do not--I used the third level, The Bone Yard. When you get to the end of the level, it will have a little whirlwind to step into. Before you step into it, find three more controllers and add them to the game (no need to sign in a profile). Move all four characters into the whirlwind. *ping*
Note: not all small whirlwinds signify the end of a level. Most levels have at least one small whirlwind that is nothing but a transition point to the rest of the level. If you do not get the achievement after passing through a small whirlwind, unplug the extra controllers and try again at the next small whirlwind.
I hope this helps. Assuming it does, enjoy your shiny new achievement.
b30118218 has another suggestion. I have not tried it myself, but it sounds like it works and may be the way you prefer to do itb30118218 said:
Easiest way to do this achievement especially if you are using rockband or guitar hero controllers instead is to use level select then use the last level in the whirlpool on the left, this will take you to the plankton boss level, with all 4 controllers active just leave 3 standing doing nothing then defeat the boss with the other controller, that way you dont need to play around with moving idle characters, the achievement will pop after the short cutscene where they are talking about the next key.