Key Takeaways:

• The Supreme Court has twice declined to review ERISA arbitration cases, offering no signal that it plans to resolve the growing appellate divide.
• The Second and Sixth Circuits have struck down individual arbitration provisions, while a recent Central District of California decision, relying on Ninth Circuit precedent, upheld similar language.
• Courts applying the Effective Vindication Doctrine continue to interpret ERISA §502(a)(2) as protecting the right to seek plan-wide relief, limiting the enforceability of individual-only arbitration clauses. A pending Eleventh Circuit appeal may further test whether specifically tailored arbitration language can survive scrutiny under this doctrine.
• Plan sponsors and trustees considering mandatory arbitration provisions should consult ESOP counsel to assess risk and ensure the plan language aligns with the evolving case law in their jurisdiction.

Mandatory arbitration provisions have become increasingly common across many industries, and retirement plans are no exception — with both sponsors and trustees attempting to lessen the impact of costly lawsuits. Although appellate circuits are struggling to find common ground on arbitration in ERISA litigation, the Supreme Court has declined — for the second time in a matter of months — to take up the issue directly.

While the Supreme Court’s refusal to grant review implies a lack of appetite for addressing individualized arbitration requirements, the appellate circuits...

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