ERISA Fiduciary Claims Not Subject to Arbitration Thursday, March 11, 2021
The Second Circuit has ruled in a significant decision that ERISA breach of fiduciary claims are not subject to arbitration under an employment arbitration agreement with the employer plan sponsor.
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In reversing a New York district court’s order to compel arbitration, the Second Circuit emphasized that the arbitration agreement the employee signed when he was hired only banned him from filing claims in court related to his employment, not ERISA claims alleging breach of fiduciary duty which, according to the Court, are not “related to” his employment. Moreover, the Second Circuit said, Congress explicitly authorized plan beneficiaries and others to sue individual fiduciaries in federal court for breach of their duties under ERISA and seek remedies on behalf of the plan.