ERISA Class Claims Subject to Individual Arbitration
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ERISA Class Claims Subject to Individual Arbitration

A former Charles Schwab employee who participated in his employer's defined contribution 401(k) retirement plan along with more than 25,000 participants filed a putative class action for violations of the Employee Retirement and Income Security Act (ERISA) and breach of fiduciary duties as a result of including employer-affiliated investment funds in the plan, despite the funds’ poor performance, in a scheme to generate fees for themselves. This raised an issue of first impression and the Ninth Circuit boldly ruled that class action claims brought on behalf of an ERISA plan are subject to individual arbitration. In a companion ruling, the Court enforced the arbitration agreement’s class action waiver and sent the putative ERISA class action to individual arbitration limiting relief to the employee’s individual plan losses.

Dorman v Charles Schwab Corporation;Dorman v Charles Schwab Corporation