March 2026 ERISA Litigation Update:

Given the continuing wave of ERISA litigation, this article has become a mainstay of The Speed Reader. 

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:

• Kvek v. Cushman & Wakefield U.S., Inc. (complaint filed on March 3 in the U.S. District Court for the Western District of Washington)
• Carfora v. Teachers Insurance Annuity Association of America (procedural ruling issued on March 3 by the U.S. District Court for the Southern District of New York)
• Ventura v. Lithia Motors, Inc. (complaint filed on February 19 in the U.S. District Court for the Central District of California)
• Sweeney v. Nationwide Mutual Insurance Company (procedural ruling issued on February 9 by the U.S. District Court for the Southern District of Ohio)
• The remainder of this article discusses recent cases outside the category referenced above.

First, cases continue to be litigated regarding plan forfeitures. Plaintiffs in these cases (who are retirement plan participants) allege that plan fiduciaries breached their ERISA duties by using forfeitures to fund matching contributions, instead of using forfeitures to pay plan expenses or to restore certain employees’ forfeited accounts. Most courts have dismissed these cases when the plan document provided fiduciaries with discretion regarding the use of forfeitures. Recent cases of that type include the following:

• Russell v. Illinois Tool Works, Inc. (procedural ruling issued on February 9 by the U.S. District Court for the Northern District of Illinois):  The plan document provides that (1) forfeitures “shall be applied to reduce the amount of Company Matching Contributions or Company Basic Contributions” under section 9.2 of the plan; and (2) forfeitures are  also applied “in accordance with Section 7.4,” which provides that forfeitures “shall be determined and applied to reduce the amount of Company Basic Contributions and/or Company Matching Contributions, or, effective as of January 1, 2017, to pay reasonable Plan expenses.” The court ruled that because those plan document sections are ambiguous and that ambiguity is not clarified elsewhere in the document or in related documents, “their interpretation is a question of fact that cannot be determined on a motion to dismiss.” In other words, “At this juncture, it is enough that the plain language does not mandate an interpretation that defeats Plaintiffs’ claims.” Thus, the case will proceed to trial.

Second, cases continue to address retirement plan document provisions governing arbitration of  participants’ claims. For example, in Parrott v. International Bancshares Corporation, the plaintiff (who worked for the defendant until 2021) alleges that the defendant plan fiduciaries breached their ERISA duty and thereby caused the plaintiff’s distribution to be diminished. He filed his lawsuit pursuant to section 502(a)(2) of ERISA.

In March 2024, the defendant amended the plan to include an arbitration clause, which was effective as of January 1, 2024. The plaintiff had already received his distribution before January 1, 2024, however, and he was no longer employed by the defendant at that time. Shortly after the plaintiff filed this lawsuit, the defendants sought to force him to arbitrate his claim based on the plan’s arbitration provisions. Under those provisions, all claims “must be brought solely in the Arbitration Claimant’s individual capacity and not in a representative capacity or on a class, collective, or group basis.”  

In issuing its ruling and sending the case back to the trial court, on February 10 the U.S. Court of Appeals for the Fifth Circuit mainly explained:

• Under the “effective vindication doctrine,” courts invalidate arbitration agreements that operate as a prospective waiver of a party’s right to pursue any statutory remedy. Here, the defendants violated that doctrine via the plan’s arbitration provisions. That is because those provisions attempt to prevent participants from filing a lawsuit seeking relief for any losses to their plan, and ERISA expressly allows participants to file such lawsuits.  

Third, outside the retirement plans arena but still within the ERISA realm, on December 23, 2025 several lawsuits were filed regarding employers’ “voluntary benefits” programs. Under those programs, an employer allows employees to purchase supplemental insurance coverage (e.g., accident insurance, cancer insurance) and employees pay the entire cost of such benefits via payroll deductions. Under section 2510.3-1(j) of ERISA’s regulations, voluntary benefits are not subject to ERISA if the following conditions are satisfied:

1. No contributions are made by the employer;
2. Participation is completely voluntary for employees;
3. The sole functions of the employer with respect to the program are, without endorsing the program, permitting the insurer to publicize the program to employees, collecting premiums through payroll deductions and remitting them to the insurer; and
4. The employer receives no consideration in the form of cash or otherwise in connection with the program (other than reasonable compensation, excluding any profit, for administrative services actually rendered in connection with payroll deductions).

I have found element #3 to be the one of which employers most commonly run afoul, but I have seen issues with the other elements as well.

The plaintiffs in these cases mainly allege that the targeted voluntary benefits programs are subject to ERISA, and the defendant employers and brokers are fiduciaries who failed to use a prudent process for monitoring the insurance carriers and brokers. As a result of that conduct, the plaintiffs assert that they paid excessive amounts for voluntary benefits.

An example of this new line of cases is Brewer v. CHS/Community Health Systems, Inc., for which the complaint was filed in the U.S. District Court for the Northern District of Illinois.