In the Headlines
January 13, 2023

10th Circ. to Mull Forced Arbitration of ERISA Class Actions


ERISA Litigation attorney Todd Wozniak spoke with Law360 about a case before the U.S. Court of Appeals for the Tenth Circuit on the issue of whether Employee Retirement Income Security Act (ERISA) suits brought on behalf of an entire retirement plan can be forced into individual arbitration. Envision Management Holding Inc.'s employee stock ownership plan (ESOP) committee recently turned to the Tenth Circuit after a lower court denied its motion to compel arbitration. The appeal turns on whether employers can force the individualization of ERISA claims through an arbitration provision written in plan documents. Envision's ESOP specified that plan participants can't sue in court and that any arbitration has to be brought individually. Core to Envision's argument is the view that seeking plan-wide monetary relief is a procedural right, not a substantive or statutory right under ERISA, which can be waived in favor of individual arbitration. 

"It does seem to me that there's nothing inherently unique about this ERISA 502(a)(2) concept. It does seem to me that if this gets to the Supreme Court, this ought to be viewed as a procedural right that can be waived," Mr. Wozniak said.

He explained that some courts have ruled individual plaintiffs don't have the right under ERISA to bring a non-class representative action individually. "The majority of the courts that have reached the issue have said that there is no right to bring a non-class representative action," Mr. Wozniak continued.

More broadly, he's watching to see how the appellate court responds to the argument from plaintiffs that ERISA gives substantive rights to individual employees to bring claims on behalf of the entire plan. "That's what the court is wrestling with. Is it a procedural right? Or a substantive right and that there's something inherently inconsistent with ERISA to say you're going to pursue your claims solely on an individual basis," he said. "It's a complicated issue, and there's no doubt the courts are struggling with it." 

READ: 10th Circ. to Mull Forced Arbitration of ERISA Class Actions (Subscription required)

Related News and Headlines