Fifth Circuit Finds Arbitration Clause Enforceable in ERISA Benefits Suit

Fifth Circuit Finds Arbitration Clause Enforceable in ERISA Benefits Suit

Plaintiffs are former UBS financial advisors and branch managers.  During the course of the Plaintiffs’ employment with UBS, the company distributed annual Compensation and PartnerPlus Plans.  The Compensation Plan provides information regarding benefits for UBS’s branch managers and financial advisors.  These provisions are located in a separate section of the Compensation Plan entitled “Arbitration”.  The Plaintiffs each signed Letters of Understanding and Acknowledgements and agreed to be bound by the terms of the Plan.  The PartnerPlus Plan, one of the benefits plans described in the Compensation Plan, contained an arbitration provision.  The Plaintiffs and UBS made contributions to the PartnerPlus Plan with the provision that upon separation from UBS, the unvested contributions would be forfeited unless the plan participants signed a separation agreement.  When the Plaintiffs left UBS and refused to sign separation agreements, UBS determined that its unvested contributions to the PartnerPlus Plan were forfeited.  The Plaintiffs sued UBS, asserting that the PartnerPlus Plan is an employee retirement plan governed by ERISA and the vesting and forfeiture provisions violated ERISA.  The district court denied UBS’s motion to compel arbitration.  The Fifth Circuit reversed and remanded, concluding that the arbitration clause is enforceable.

Hendricks v. UBS Financial Services, Inc., Nos. 13-40692 & 13-40693 (5th Cir. Nov. 11, 2013). 

Hendricks v UBS Financial Services.pdf

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