Member Article

Reasons for Not Enforcing Arbitration

Ways to Address

With respect to claims brought on behalf of the plan (e.g., fiduciary breach), the plan has not agreed to arbitration.

Include the arbitration provision in the plan document and reference the provision in the trust agreement if possible.

Participants received no consideration.

Include the arbitration provision in the plan as early as possible.

Specify that further benefits are conditioned on arbitration.

Make the arbitration provision expressly mutual.

Participants have not agreed to arbitration.

Include a requirement to arbitrate plan claims in employment, severance, or other agreements, although this may not be binding on the plan.

Participants did not receive notice of the arbitration requirement.

Ensure the arbitration provision is conspicuously included in the summary plan description or a summary of material modifications and is provided to all participants as early as possible.

Consider other overt methods of providing notice of the arbitration provision.

Claims are not included in the scope of the arbitration provision.

Ensure the arbitration provision broadly defines the parties and types of claims subject to the arbitration.

Individual arbitration of fiduciary breach claims violates purposes of ERISA.

Ensure the arbitrator can award all remedies under ERISA, including the removal of the trustee.

Make arbitration provisions as participant friendly as possible (e.g., pay for expenses, offer telephonic hearing, make venue convenient).