Triad Stock Plan Suit to Stay in Court After 7th Cir. Ruling

Employers hoping to curb class litigation by writing mandatory arbitration clauses into their employee benefit plans got bad news, when the Seventh Circuit declined to force a dispute over Triad Manufacturing Inc.'s employee stock ownership plan into arbitration.

An Employee Retirement Income Security Act claim is generally arbitrable, but the arbitration clause in this particular case couldn’t be enforced because it included a prohibition on a participant’s right to pursue certain statutory remedies, the U.S. Court of Appeals for the Seventh Circuit said. Since the plan’s arbitration clause couldn’t be severed, no fiduciary breach claim may be arbitrated, the panel ...