August 2025 ERISA Litigation Update

Given the continuing wave of ERISA litigation, this article has become a mainstay of The Speed Reader. A sample of recent cases is provided below. 

The most common type of ERISA case involves retirement plan participants’ allegations that plan fiduciaries caused participants to pay excessive recordkeeping and investment fees and included one or more poorly-performing investment options in the plan. Recent cases in this category include the following:

• Ang v. Franklin Resources, Inc. (complaint filed on July 22 in the U.S. District Court for the Northern District of California)
• Babinski v. Siemens Energy, Inc. (complaint filed on July 22 in the U.S. District Court for the Southern District of Texas)
• Snyder v. UnitedHealth Group, Inc. (settlement agreement approved by the U.S. District Court for the District of Minnesota on June 24)

Other types of recent ERISA cases are as follows:

Castillon v. Aldi, Inc. (complaint filed on July 21 in the U.S. District Court for the Northern District of Illinois) and Tillery v. WakeMed Health & Hospitals (complaint filed on July 10 in the U.S. District Court for the Eastern District of North Carolina):  These cases are part of a recent wave of cases in which the plaintiff (a retirement plan participant) alleges that plan fiduciaries violated ERISA via their use of plan forfeitures. Specifically, the plaintiffs allege that the defendants breached their ERISA duties by using forfeitures solely to help fund employer contributions rather than to pay plan expenses.

The complaint in Castillon admits that under the plan document’s terms, forfeitures “may be used to reduce matching contributions, but does not require it,” which “implies discretionary choice.” Similarly, the complaint in Tillery acknowledges that “The Plan provides that forfeitures will be used to reduce any nonelective contribution, reduce any matching contribution, and pay Plan expenses.”

It appears that the plaintiffs face an uphill battle in these cases, given several recent court decisions holding that if a plan document provides fiduciaries with discretion regarding the use of forfeitures, the use of some or all forfeitures to pay proper plan expenses does not constitute the breach of any ERISA fiduciary duty.

Platt v. Sodexo (procedural ruling issued on August 4 by the U.S. Court of Appeals for the Ninth Circuit):  The plaintiff in this case, who is an ERISA welfare benefit plan participant, claims that a monthly tobacco surcharge on his health insurance premiums violates ERISA. At this stage of the litigation, the court addressed the defendants seeking to compel arbitration of the plaintiff’s claim pursuant to an arbitration provision in the plan document.

The appeals court denied the defendants’ motion to compel arbitration and held that there was no enforceable arbitration agreement. The court explained that “an employer does not create a valid arbitration agreement by unilaterally modifying an ERISA governed plan to add an arbitration provision. Instead, the employer must obtain consent from the relevant party to form a valid arbitration agreement.” The court noted that the plaintiff did not consent to arbitrate his claim, via continued participation in the plan or via any other method. Thus, the appeals court remanded the case to the district court for further proceedings.