ERISA Arbitration and Class Action Waivers: Drafting Arbitration Provisions, Minimizing Risks and Class Actions

The trend towards binding participants in ERISA plans to arbitration agreements and waiver of class action claims continues as courts grapple with various legal theories and other issues. ERISA counsel must know the opportunities and ramifications the provisions have on benefits claims, fiduciary breaches, and other terms and provisions when amending plan documents and structuring related agreements.

Participants of ERISA plans can pursue a claim for plan benefits under 1132(a)(1)(B), breach of fiduciary duty under 1132(a)(2), and a claim for injunctive or other appropriate equitable relief to enforce the terms of the plan or ERISA or to remedy violations of a plan or ERISA under 1132(a)(3). Properly structured arbitration provisions and class action waivers can significantly minimize potential costly litigation and the possibility of a court declining to enforce such provisions.

Plans that wish to add arbitration provisions to a plan document should consider how to communicate to plan participants and whether to couple the arbitration provision with a class action waiver. Attorneys representing plan sponsors should take a look at arbitration clauses and class action waivers and consider modifying existing plan documents to include class action waivers and arbitration clauses in the future.

Listen as our panel discusses legal theories and results from recent court rulings, key provisions for plan amendments and employment agreements, and best practices for ERISA counsel and fiduciaries.