A Ninth Circuit Ruling Repaves the Intersection of ERISA and Arbitration Law

“On August 29, 2019, in what was a significant development in the intersection of the Employee Retirement Income Security Act (ERISA) and arbitration law, the Ninth Circuit Court of Appeals ruled in Dorman v. The Charles Schwab Corp. that Charles Schwab Corp. could send a 401(k) plan mismanagement lawsuit to arbitration rather than face a proposed class-action lawsuit.

Breach of Fiduciary Claim Under ERISA
There has been a slew of cases where retirement plan participants have sued their employers for mismanaging their retirement plan under ERISA Section 502(a)(2). These claims generally assert that employers acting as plan administrators engage in self-dealing and/or other practices that violate ERISA’s fiduciary standards, such as imprudently selecting investment options and administrative services, or selecting funds that earn high fees for the plan sponsor while performing worse than other competitors.” Continue reading.

Source: Pillsbury Winthrop Shaw Pittman LLP