Arbitration Rulings Suggest Courts Need More Information on ERISA

Benefits and executive compensation partner Rick Pearl authored an article for Law360, discussing the Federal Arbitration Act (FAA), a federal policy signed into law in 1925 to enforce arbitration agreements as written, according to their terms.

Pearl explains how district courts and circuit courts have sidestepped the FAA’s mandate and refused to compel individualized arbitration of an Employee Retirement Income Security Act (ERISA) Section 502(a)(2) claim, which entitles a plaintiff to bring an action for appropriate relief under ERISA Section 409(a).

The author discusses the arbitrability issue, explaining that many courts have interpreted ERISA Sections 502(a)(2) and 409(a) as creating a statutory right for an individual participant to recover all loss to an ERISA plan, not just loss to the individual claimant’s own plan account.

Pearl also outlines the need for assistance and adds that ERISA provisions are generally not a model of clarity, often because Congress wanted to provide flexibility to courts that have to interpret provisions in the context of widely varying types of benefit plans.