Senior Counsel Louis Joseph and Partner Chelsea McCarthy shared their input with Law360 on the Epic Systems decision by the U.S. Supreme Court, specifically regarding worker's rights and arbitration of fiduciary breach claims. The high court’s 5-4 decision made it clear that employers could legally bar workers from banding together to sue, but left it uncertain what that proclamation means for fiduciary breach claims under ERISA, where individual workers can sue on behalf of their retirement plan.
"Had Epic Systems been decided in the opposite manner — had the employees prevailed — that might have strongly suggested that perhaps mandatory arbitration or at least waiver of class action claims might not have been available in ERISA claims," said Mr. Joseph. "But the fact it was decided in the way that it was holds out the possibility that those waivers could be enforced against plan participants."
Ms. McCarthy agreed that the difficulty of overturning an arbitrator’s decision poses a risk for plan fiduciaries, which can face multimillion-dollar judgments in fiduciary breach suits. "If you are the plan and you get a bad decision, you’re stuck with it. There is no clear path for appeal," she said.
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