Sixth Circuit invalidates arbitration agreement
The US Court of Appeals for the Sixth Circuit just invalidated the arbitration agreement that was included in an ERISA plan.
Using the “effective vindication doctrine”, the court held that the arbitration agreement prevented the parties from effectively vindicating their statutory rights in arbitration. Since the arbitration agreement prevented a participant from serving in a representative capacity for the arbitration (akin to a class representative in a class action case), it served to eliminate the right to assert a breach of fiduciary duty claim against the plan.
The effective vindication doctrine is a legal principle that ensures arbitration agreements do not prevent parties from effectively vindicating their statutory rights. Essentially, it means that if an arbitration agreement includes provisions that hinder a party's ability to enforce their statutory rights, those provisions are not enforceable
The Sixth Circuit’s decision is consistent with the other circuits, with the unsurprising exception of the Ninth.
The case is Fleming v. Kellogg Co., decided on October 21st. 2024 WL 4534677.