In the News

ESOP Participants Urge Justices to Reject Arbitration Plea


August 29, 2023

Participants in a radiology company’s employee stock ownership plan urged the U.S. Supreme Court to reject a management-side petition for certiorari seeking to force arbitration of their benefits lawsuit, arguing the Tenth Circuit rightly found a provision in ESOP plan documents unenforceable because it purported to eliminate statutory remedies.

The proposed class of participants in an ESOP for employees of radiology company Envision, led by ESOP participant and former Envision MRI and CT scan technician Robert Harrison, entered a brief on Friday in the Employee Retirement Income Security Act lawsuit. Defendants named in Harrison’s suit include Envision’s holding company; the company’s ESOP committee, board of directors and individual executives; and ESOP trustee Argent Trust Co. The Supreme Court requested a response from the proposed class after ESOP trustee Argent Trust Co., Envision Management Holding and others overseeing the plan petitioned for certiorari on July 7.

Harrison said in the response brief that petitioners couldn’t justify their bid to overturn a Tenth Circuit decision from February upholding a Colorado district court’s March 2022 arbitration denial in the workers’ case. The suit, first filed in January 2021, accuses the companies and selling shareholders of breaching their duty to participants in the ESOP, an ERISA-protected defined contribution plan created in 2017, by overcharging the plan in a $163.7 million sale of company stock in a transaction approved by Argent.

“They drafted an arbitration clause that purports to eliminate substantive statutory remedies that an individual participant may pursue in court, including removal of a breaching fiduciary. Every court of appeals to consider this particular arbitration clause has invalidated it for that reason, and that reason alone,” the participants said in their 32-page filing.

. . .

Robert Harrison and the proposed class are represented by Bridget C. Asay, Rachana Pathak, John Stokes and Peter K. Stris of Stris and Maher LLP and Michelle C. Yau and Kai H. Richter of Cohen Milstein Sellers & Toll PLLC.

Read ESOP Participants Urge Justices to Reject Arbitration Plea.