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Meet the Law Firms Fighting 401(k), Health Plan Class Actions

"For the second year in a row, [Morgan Lewis & Bockius LLP is] the law firm getting the most ERISA class action business.... Dorsey & Whitney LLP follows closely in number of ERISA class actions.... Skadden Arps Slate Meagher & Flom has been hired to defend eight ERISA class actions in the past year.... Proskauer Rose LLP, Alston Bird, Groom Law Group Chartered, and Reed Smith LLP are defending seven class actions, respectively.... Steptoe & Johnson LLP was hired to defend six ERISA class actions.... O'Melveny & Myers LLP and Sidley Austin LLP are defending four class actions each."

District Court Enjoins 401(k) Plan from Considering ESG

"The case will almost certainly focus more attention on the proxy voting policies and procedures of ERISA plans, and the extent to which the managers of funds in which ERISA plans invest are attempting to pursue ESG objectives through proxy voting and other types of shareholder activism. However, it appears unlikely that the case will prompt a wave of ERISA class actions by plaintiffs' attorneys in the absence of a coherent nexus between a fund manager's consideration of ESG factors and a loss to the plan." [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Sep. 30, 2025)]

Identifying Exemptions to the Prohibited Transaction Rules (PDF)

16 pages. "This practice note addresses exemptions to the prohibited transactions rules of [ERISA] and the similar rules under the Internal Revenue Code.... The specific topics addressed in this practice note are (1) Statutory Exemptions, (2) Individual Exemptions, (3) Application for Class Exemptions, and (4) EXPRO (Expedited Processing) Applications for Exemption."

DOL Fiduciary Rule: Summary and Anticipated Effects

"Under the proposal, there does not need to be any agreement or understanding between the parties as to whether the recommendations are merely examples of choices available, education, or individualized advice. The definition is not likely to address the concerns of the industry or a reviewing court applying the reasoning of the Fifth Circuit.... [Amendments to PTE 84-24] seem destined to draw challenge from the insurance industry."

ESG-Driven Litigation Soars to New Heights in Class Action Lawsuits Against Airlines

"[T]he American Airlines lawsuit is the first that focuses on the use of ESG factors by investment managers in a defined contribution plan. Both highlight the need for companies to pay attention to the evolving ESG legal landscape in order to mitigate risk." [Spence v. American Airlines, Inc., No. 23-0552 (N.D. Tex. complaint filed Jun. 2, 2023)]

Second Circuit to Decide Whether 401(k) Plans Can Be Garnished to Enforce Criminal Restitution Order

"Last week, the Second Circuit heard oral argument ... about whether the government can garnish two retirement accounts held by the defendant to aid in the execution of an over $10 million criminal restitution award against the defendant.... This case will be an interesting one to watch, to see how much protection -- even in the criminal context -- qualified retirement plans receive from the courts and whether private victims will have the same powers to enforce." [U.S. v. Greebel, No. 15-637 (E.D.N.Y. Apr. 16, 2021; on appeal to 2d Cir. No. 21-993)]

SCOTUS Agrees to Hear ERISA 'Excessive Fee' Case

"While the Seventh Circuit in Hughes affirmed the dismissal of the plaintiffs' complaint, many of these excessive fees cases have survived motions to dismiss, subjecting plan sponsors and fiduciaries to costly and time consuming discovery.... The Supreme Court's decision to review this issue should bring some clarity to the pleading standard in this hotly litigated area[.]" [Hughes v. Northwestern Univ., No. 18-2569 (7th Cir. Mar. 25, 2020; cert. pet. granted No. 19-1401, Jul. 2, 2020)]

The SECURE Act in 2020

"Many of the tasks assigned to them will be familiar to [pooled plan providers (PPPs)] from their experience with prototype plans, but others will not, such as adjudicating claims disputes, approving qualified domestic relations orders, and tracking credit for vesting service.... [T]he mandated assumptions [for disclosure of annuity estimates] may yield results so approximate as to be useless, if not seriously misleading.... [E]mployers [should] make sure that they track part-timers' hours in order to identify those who may have to be offered participation [starting in 2024].... [W]ithdrawals [for childbirth or adoption expenses] may be repaid to an IRA (or, in some cases, to the defined contribution plan from which they were taken), in which case they will be treated as having been rolled over (and therefore not subject to income tax)."

ERISA Arbitration Looks Safer; Ninth Circuit Reverses District Court, Sends Fiduciary Dispute to Arbitration

"From Munro and Dorman, taken together, one can glean that the Federal Arbitration Act's support for arbitration agreements is alive and well ... While the defendants failed to compel arbitration in Munro, their defeat was technical rather than substantive.... The Ninth Circuit's opinion notably eschewed the anti-arbitration effusions of the court below and instead concentrated on the question of what party's consent was needed to create an enforceable arbitration agreement. The obvious lesson is that arbitration clauses are most effective when included in the terms of the plan rather than left to individual participants' employment agreements."

Ninth Circuit Reverses District Court, Sends Fiduciary Dispute to Arbitration

"The Ninth Circuit's opinion notably eschewed the anti-arbitration effusions of the court below and instead concentrated on the question of what party's consent was needed to create an enforceable arbitration agreement. The obvious lesson is that arbitration clauses are most effective when included in the terms of the plan rather than left to individual participants' employment agreements." [Dorman v. The Charles Schwab Corp., No. 18-15281 (9th Cir. Aug. 20, 2019; also unpub. memo. opinion)]