Appeals courts will get to decide whether arbitration agreements can nullify workers' ability to sue on behalf of their retirement plan, and what it takes for a lawsuit claiming retirees lost savings due to excessive fees to survive a dismissal bid.
Here are five Employee Retirement Income Security Act cases attorneys should watch in the New Year.
Argent Looks to Push ESOP Suit Into Arbitration
Argent Trust Co. on Dec. 9 said it would file an interlocutory appeal at the Second Circuit seeking to force a proposed class of workers to arbitrate their suit alleging a barbecue chain's employee stock ownership plan overpaid for company shares.
Argent's notice of appeal came after U.S. District Judge Denise L. Cote denied Argent's motion to compel arbitration on Dec. 6. Judge Cote said participants in the W BBQ Holdings Inc. employee stock ownership plan didn't have to arbitrate ERISA claims against plan trustee Argent because the agreement in plan documents was invalid.
It's because the plan's arbitration procedures prohibited representative actions seeking relief on behalf of a plan, "even though ERISA expressly provides for such actions," Judge Cote said.
The Argent appeal goes up to the Second Circuit as several other arbitration-related cases are on appeal. For example, oral arguments are expected in January or February in another Second Circuit appeal brought by Argent Trust and other financial services companies related to claims against the Strategic Financial Solutions employee stock ownership plan.
The Third Circuit heard oral arguments in November in another arbitration denial appeal, with a three-judge panel appearing skeptical of Wilmington Trust's argument that a district court's refusal to compel arbitration should be upended.