It’s a significant ruling because although employees sign an arbitration agreement when they’re hired, that agreement is not also signed by anyone with the authority to bind an ERISA plan and it is also not a part of plan documents.

Therefore, the plan itself has not agreed to be bound by arbitration.

And, according to Phillips’ ruling—which, according to the report, relied on multiple cases that have held that a release and agreement not to sue doesn’t prevent a participant from suing for fiduciary breach on behalf of the plan—while participants suing on behalf of a plan can’t waive the plan’s right to pursue claims, they also can’t waive a plan’s right to file its claims in court.

If an arbitration agreement could control participants’ ERISA claims, fiduciaries could mitigate their own ERISA obligations by compelling prospective employees to sign those agreements, including their provisions of confidentiality, expedited arbitration procedures, limited discovery and mandatory splitting of arbitrators’ fees, or else not be hired.

The judge pointed out that not allowing arbitration agreements to affect participants’ fiduciary breach claims under ERISA is “closely aligned” with the goals of the statute.