Cintas Corp. called on the US Supreme Court to send a dispute over its 401(k) plan fees into arbitration, saying the federal circuit courts are split over whether arbitration agreements in employment contracts can cut off ERISA class litigation.
Federal courts including the Second, Fifth, and Tenth Circuits have long agreed that claims under the Employee Retirement Income Security Act are generally arbitrable, even if they allege violations of the statute’s fiduciary obligations, Cintas said in a petition docketed Monday. But in the past few years, both the Sixth and Ninth Circuits have incorrectly allowed ERISA class claims to advance despite arbitration agreements contained in individual employment contracts, the company said.
The Sixth Circuit’s April decision against Cintas was rooted in the erroneous idea that ERISA fiduciary breach claims belong to the relevant benefit plan and thus can’t be forced into arbitration without the plan’s consent, the company said. It makes “particularly little sense” to ask whether a plan has consented when the claims at issue “involve participants suing to vindicate their own interests in plan assets,” Cintas said.
A Supreme Court decision on arbitration of ERISA fiduciary breach claims could have big implications for litigation over retirement plan fees, which has exploded in recent years. Several employers have...
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