The U.S. Court of Appeals for the Ninth Circuit recently upheld a lower court ruling that a group of ERISA plan participants' claims under ERISA Section 502(a)(2) for breach of fiduciary duty were not required to be arbitrated despite the fact that they had entered into employment agreements requiring them to arbitrate all of their claims.

In reaching this holding, the court emphasized that the participants had raised claims not on their own behalf, but on behalf of an ERISA plan, which was not a party to the employment agreement with the arbitration clause. Munro v. Univ. of Southern Cal., No. 2:16-cv-06191, 2018 WL 3542996 (9th Cir. July 24, 2018).

The ERISA claims and rulings

Allen Munro and eight other current and former employees of the University of Southern California were participants in the USC Retirement Plan Oversight Committee. They sued the University, the Retirement Plan, and a committee member for breaching their fiduciary duties by failing to reduce the retirement plan's fees and expenses and by failing to use sound judgment when determining what investments to include in the plan. The participants seek monetary and equitable remedies that benefited the plans and its participants and beneficiaries, including a determination about how to calculate losses, removal of certain fiduciaries, an accounting of plan losses, reformation of the plans, and an order concerning future investments.