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ESOP managers can’t force airline workers to arbitrate suit – Law360


Law360 (March 8, 2023, 9:26 PM EST) — A cargo airline’s owners and the caretakers of its employee stock ownership plan must face an Employee Retirement Income Security Act lawsuit in Delaware federal court, a judge ruled Wednesday, throwing out their bid to arbitrate workers’ claims that the defendants mismanaged the transaction that created the ESOP.

In a two-page order, U.S. District Judge Richard G. Andrews adopted U.S. Magistrate Judge Jennifer L. Hall’s Jan. 25 recommendation to toss the arbitration bid by the Western Global Airlines defendants. The ESOP’s requirement for the airline’s workers to arbitrate their issues with the plan one-on-one conflicts with ERISA’s promise that workers can sue on their benefit plan’s behalf, the judges said. 

. . .

The proposed class is represented by Carmella P. Keener of Cooch & Taylor PA; Peter K. Stris, Rachana A. Pathak, Victor O’Connell and John Stokes of Stris & Maher LLP; Michelle C. Yau, Daniel R. Sutter and Eleanor Frisch of Cohen Milstein Sellers & Toll PLLC; and Paul J. Lukas and Brock J. Specht of Nichols Kaster PLLP.

. . .

The case is Burnett et al. v. Prudent Fiduciary Services LLC et al., case number 1:22-cv-00270, in the U.S. District Court for the District of Delaware.

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