ERISA Class Action Review – 2025

plan document required individual arbitration, meaning the plaintiff could not seek monetary relief on behalf of other participants, but the plaintiff argued that this restriction prevented her from effectively vindicating the ERISA’s statutory remedies. Id. The court sided with the defendant, holding that § 502(a)(2) merely authorizes a plan participant to sue a fiduciary for “appropriate relief,” and reasoning that “appropriate relief” does not always have to include the right to pursue plan-wide monetary relief. Id. at *13. The court emphasized that this arbitration agreement provided that “[i]f any portion of the Arbitration provision or Class Action Waiver is found to prohibit a Claimant from obtaining any relief under ERISA that the Claimant would be able to obtain on an individual basis, . . . the Arbitrator(s) shall have the authority to award such relief.” Id. at *17. According to the court, these provisions allowed the arbitrator to award plaintiff any and all relief available under the ERISA, including relief that could benefit the whole plan such as removal of a fiduciary. Id. at *17-18. Accordingly, the court granted the defendants’ motion to compel arbitration. Id. at *18. Overall, the legal landscape with respect to mandatory arbitration and class action waiver provisions remained the same as it has in recent years. Despite their growing importance in other fields of class action litigation, these provisions are often unenforceable in the ERISA context. 7. Rulings On Jury Demands Under The ERISA Courts and claimants in ERISA class actions continue to grapple with the availability of jury trials and the circumstances where a jury is allowed for such claims. In Binder, et al. v. PPL Corp., Case No. 22-CV-13 (E.D. Penn. Nov. 4, 2024), the plaintiffs, a group of participants in the defendants’ employee savings plan, filed a class action alleging that the defendants selected the Northern Trust Focus Funds (Focus Funds) as the Plan’s target date investment option, which consistently underperformed alternative funds. The plaintiffs alleged that the defendants breached their fiduciary duties in violation of the ERISA by imprudently monitoring and retaining the Focus Funds, ) selecting and retaining higher-cost shares, and failing to monitor fiduciaries. The plaintiffs filed a motion for a jury demand, and the court denied the motion. The plaintiffs contended that because they primarily sought compensatory damages, the relief at issue was legal and therefore they had a right to a jury trial. The court rejected the plaintiffs’ argument in a one-page order. The court ruled that claims against ERISA fiduciaries are inherently equitable in nature, and thus so are the remedies sought. Id. at 1. The court noted that the Third Circuit has repeatedly held that there is no right to a jury trial in an ERISA action. Id. The court therefore denied the plaintiffs’ request for a jury demand. III. New Developments In 2024 While many of the cases decided in 2024 centered on issues that have been litigated repeatedly in recent years, there were also two important new developments. This past year witnessed the emergence of a new class of claims alleging the misuse of forfeited 401(k) contributions. In addition, one case tested the viability of environmentally and socially conscious investment practices. 1. 401(k) Forfeitures Over the past year, multiple ERISA class actions have challenged 401(k) plan sponsors’ use of forfeited funds and have survived motions to dismiss. Normally, a 401(k) plan is funded by employee contributions and an employer matching those contributions. In many situations, an employee is immediately vested in their own contributions, while their employer’s matching contributions become vested over a period of years. If an employee leaves before the vesting period, they forfeit the balance of unvested company matching contributions. Many employers use these forfeited funds to reduce their future contributions to plans. A number of class actions in 2024 have challenged this practice, arguing that companies should instead be using this money to offset the administrative expenses normally borne by plan participants. Federal district courts have indicated that these actions can state plausible claims under the ERISA. For example, in Perez-Cruet, et al. v. Qualcomm Inc. , 2024 U.S. Dist. LEXIS 93522 (S.D. Cal. May 24, 2024), the plaintiff, an ex-employee of the defendants, alleged that the defendants violated the ERISA by choosing to

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