PLANSPONSOR - October/November 2019 - 12
Rules & Regulations
Schwab Arbitration Ruling Leaves
Unanswered Questions
T
he 9th U.S. Circuit Court of
Appeals in August issued a ruling
in Michael F. Dorman et al. v. The
Charles Schwab Corp. et al. that Schwab
could enforce its retirement plan's arbitration
clause requiring participants to file
individual claims and to waive class action
claims. Legal experts say the case raises
questions that should give plan sponsors
pause before including an arbitration
clause in their plan.
The court ruled that the plan
expressly said all Employee Retirement
Income Security Act (ERISA) claims
should be individually arbitrated and
that the plan also included a waiver of
class action suits. Dorman's original suit
accused Schwab of breaching its fiduciary
duties by including poorly performing
Schwab-affiliated funds in its plan. He
brought the suit on his own, seeking class
action remedy for the plan in its entirety.
The 9th Circuit's decision is " significant
because it is the first case in the nation
to explicitly permit the implementation of
an arbitration provision in a plan document, "
says Nancy Ross, a partner in Mayer
Brown. " However, the ramifications of this
are still very much uncertain. "
Joan Neri, counsel in the ERISA practice
of Drinker, Biddle & Reath LLP, says
the case " does not address how a fiduciary
breach claim seeking plan-wide relief
aligns with the individual recovery sought
in arbitration. This is something that
advisers and sponsors should continue
to watch in the litigation sphere before
making any amendments to a plan. "
12 PLANSPONSOR.com October - November 2019 Art by Mar Hernández
Neri further explains, " The 9th
Circuit in Dorman focused on whether the
plan or the individual had agreed to the
arbitration. Because the arbitration provision
was in the plan, the court concluded
that the plan had expressly agreed that the
ERISA claim could be arbitrated. This was
a factor that distinguished this decision
from the 9th Circuit's earlier decision in
Munro v. University of Southern California
in which the arbitration agreement was
signed by the individual as part of her
employment agreement. "
What Dorman did not address was
" how the relief provided in an individual
arbitration-i.e., the participant's individual
damages-reconciles with the
plan-wide relief for the breach of fiduciary
claim, " Neri says. " That is the
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PLANSPONSOR - October/November 2019
Table of Contents for the Digital Edition of PLANSPONSOR - October/November 2019
Investment-Driven
2019 DC Survey: Plan Benchmarking
Projecting Participant Outcomes
Just Around the Corner?
The Search for Basis Points
It Could Be Time to De-Clutter
PLANSPONSOR - October/November 2019 - C1
PLANSPONSOR - October/November 2019 - FC1
PLANSPONSOR - October/November 2019 - FC2
PLANSPONSOR - October/November 2019 - C2
PLANSPONSOR - October/November 2019 - 1
PLANSPONSOR - October/November 2019 - 2
PLANSPONSOR - October/November 2019 - 3
PLANSPONSOR - October/November 2019 - 4
PLANSPONSOR - October/November 2019 - 5
PLANSPONSOR - October/November 2019 - 6
PLANSPONSOR - October/November 2019 - 7
PLANSPONSOR - October/November 2019 - 8
PLANSPONSOR - October/November 2019 - 9
PLANSPONSOR - October/November 2019 - 10
PLANSPONSOR - October/November 2019 - 11
PLANSPONSOR - October/November 2019 - 12
PLANSPONSOR - October/November 2019 - 13
PLANSPONSOR - October/November 2019 - 14
PLANSPONSOR - October/November 2019 - 15
PLANSPONSOR - October/November 2019 - 16
PLANSPONSOR - October/November 2019 - 17
PLANSPONSOR - October/November 2019 - 18
PLANSPONSOR - October/November 2019 - 19
PLANSPONSOR - October/November 2019 - 20
PLANSPONSOR - October/November 2019 - 21
PLANSPONSOR - October/November 2019 - 22
PLANSPONSOR - October/November 2019 - 23
PLANSPONSOR - October/November 2019 - 24
PLANSPONSOR - October/November 2019 - 25
PLANSPONSOR - October/November 2019 - Investment-Driven
PLANSPONSOR - October/November 2019 - 27
PLANSPONSOR - October/November 2019 - 28
PLANSPONSOR - October/November 2019 - 29
PLANSPONSOR - October/November 2019 - 30
PLANSPONSOR - October/November 2019 - 31
PLANSPONSOR - October/November 2019 - 2019 DC Survey: Plan Benchmarking
PLANSPONSOR - October/November 2019 - 33
PLANSPONSOR - October/November 2019 - 34
PLANSPONSOR - October/November 2019 - 35
PLANSPONSOR - October/November 2019 - 36
PLANSPONSOR - October/November 2019 - 37
PLANSPONSOR - October/November 2019 - 38
PLANSPONSOR - October/November 2019 - 39
PLANSPONSOR - October/November 2019 - Projecting Participant Outcomes
PLANSPONSOR - October/November 2019 - 41
PLANSPONSOR - October/November 2019 - 42
PLANSPONSOR - October/November 2019 - 43
PLANSPONSOR - October/November 2019 - Just Around the Corner?
PLANSPONSOR - October/November 2019 - 45
PLANSPONSOR - October/November 2019 - 46
PLANSPONSOR - October/November 2019 - 47
PLANSPONSOR - October/November 2019 - The Search for Basis Points
PLANSPONSOR - October/November 2019 - 49
PLANSPONSOR - October/November 2019 - It Could Be Time to De-Clutter
PLANSPONSOR - October/November 2019 - 51
PLANSPONSOR - October/November 2019 - 52
PLANSPONSOR - October/November 2019 - 53
PLANSPONSOR - October/November 2019 - 54
PLANSPONSOR - October/November 2019 - 55
PLANSPONSOR - October/November 2019 - 56
PLANSPONSOR - October/November 2019 - C3
PLANSPONSOR - October/November 2019 - C4
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