ERISA and Arbitration
New - Summer 2018:
Plan sponsors and ERISA fiduciaries may require that ERISA disputes be resolved through mandatory binding arbitration. Shearson/American Express v. McMahon, 482 U.S. 220 (1987). This case involves claims for plan benefits, as well as for claims involving breach of fiduciary duty and discrimination or interference with ERISA rights. See the following cases enforcing mandatory arbitration -- under the Federal Arbitration Act -- for ERISA claims:
|2nd||1991||Bird v Shearson/Lehman, 926 F. 2d 116|
|3rd||1993||Pritzker v. Merrill Lynch, 7 F. 3d 1110|
|5th||1996||Kramer v Smith Barney, 80 F. 3d 1080|
|6th||2014||Shafer v.Multiband Corp.|
Simon v. Pfizer, 2005 U.S. App. LEXIS 2881 (re enhanced severance plan, but no arbitration for COBRA and ERISA 510 claims).
|8th||1988||Sulit v Dean Witter, 847 F. 2d 475|
Williams v Imhoff, 203 F. 3d 758
Group Health Plans - Special Rule
Department of Labor FAQ B-6 re Group Health and Disability Benefits and Regulations re Claims Procedures:
2014.Jan.07 Arbitration Decision "Wrong" but Binding -- ERISA Trustee's Lose Indemnification. In the wake of the Supreme Court decisions re internal statutes of limitation, employers should be thinking about how to improve their plan provisions that address claims and litigation. A disadvantage of binding arbitration comes from the 6th Circuit's opinion affirming an arbitrator's invalidation of indemnification agreements for ESOP trustees, even though "The arbitrator's decision would doubtless be reversed if it were a decision under the precedent of this court." Given an arbitrary and capricious standard of judicial deference for ERISA plan decisions, it must be difficult to swallow aberrant arbitration decisions such as that in Shafer v.Multiband Corp. (6th Cir. 1/6/14).
2012.June.13 Class Action Waiver Enforced. An arbitration agreement's broad reference to "any controversy" was first held to require arbitration of ERISA claims, but its silence about allowing class actions in arbitration foreclosed that remedy for an employee group bringing health plan claims. Accordingly, the Middle District of Alabama District Court granted the employer's motion to compel arbitration, in Hornsby v. Macon County Greyhound Park. Here is an excerpt from the decision:
Articles re ERISA and Arbitration
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