January 20, 2021

A proposed class of current and former Triad Manufacturing Inc. employees urged the Seventh Circuit to keep their ERISA suit in the courthouse, saying an Illinois federal judge correctly ruled that companies can't compel individual arbitration of class actions alleging benefit plan mismanagement.

In a brief lodged Tuesday at the Seventh Circuit, the proposed class said the mandatory arbitration clause in Triad's employee stock ownership plan was null and void because it attempted to restrict workers' Employee Retirement Income Security Act-protected right to sue collectively.

"The Supreme Court has explained — and defendants do not dispute — that arbitration agreements are invalid and unenforceable if they 'operate … as a prospective waiver of a party's right to pursue statutory remedies,'" the proposed class said, adding that Triad's arbitration clause impermissibly restricts ERISA's statutory remedies.

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The proposed class is represented by Karen L. Handorf, Michelle C. Yau and Jamie L. Bowers of Cohen Milstein Sellers & Toll PLLC and Peter K. Stris, Rachana A. Pathak, Douglas D. Geyser and John Stokes of Stris & Maher LLP.

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