ERISA Arbitration Clause Faces Skeptical Seventh Circuit (1)

An attorney defending a mandatory arbitration clause in an ERISA plan document on Tuesday fielded tough questions from a panel of Seventh Circuit judges, which wanted to square statutory language authorizing plan-wide relief with a plan term requiring individual arbitration of claims alleging fiduciary mismanagement.

The judges’ questions highlighted tensions between the Employee Retirement Income Security Act—which authorizes retirement plan participants to file lawsuits seeking relief that benefits the entire plan—and a provision in the Triad Manufacturing Inc. employee stock ownership plan requiring these disputes to be resolved through binding arbitration.

The case asks the judges to consider a 2020 ...