Release Us from Confusion Over ERISA Fiduciary Claims
Pensions & Benefits Daily, Vol. 40, March 16, 2010
7 Pages Posted: 25 Mar 2010 Last revised: 29 Oct 2016
Date Written: March 16, 2010
Class-action litigation has found its way to ERISA in quite a high-profile fashion. In so called “stock-drop” and “indirect-fee” cases, among others, plan participants acting as class representatives have asserted on behalf of a broader group of participants that plan fiduciaries have breached their duties to the detriment of the plan. But what if the putative class representatives have generally released claims against their employer, and a host of other parties connected with the employer? Would they be barred from bringing their claims? A quick review of the cases might lead one to conclude that releases are not effective to forestall a participant’s effort to bring a class action. In case after case, courts conclude that general releases do not bar the bringing of ERISA fiduciary claims, and in a number of cases plaintiffs have been permitted to continue with claims notwithstanding their having given general releases. But maybe the courts have been saying that there is something about the particular releases on which they are ruling that renders them ineffective to forestall the fiduciary claims at issue. As illustrated by the reasoning in the December 2009 Schering-Plough case, maybe a particular release or covenant not to sue could, depending on how it is drafted, indeed be sufficient to act as a defense to a class representative’s purported claim.
Suggested Citation: Suggested Citation