- NYU, J.D. (2000)
- Berkeley, B.A. (1997)
Law360 has identified our Seventh Circuit victory in Smith v. Board of Directors of Triad Manufacturing as one of the “5 Benefits Rulings from 2021 That Attorneys Should Know.”
In Law360’s words:
The Seventh Circuit’s ruling in September to knock down an arbitration provision written into the employee stock ownership plan of Triad Manufacturing Inc. provided new guidance on when workers can’t — and can — be required to resolve claims out of court.
A three-judge panel ruled in Smith v. Board of Directors of Triad Manufacturing Inc. that an employee stock ownership plan’s arbitration provision was unenforceable because it limited the relief available in arbitration to the individual claimant. It is one of several cases in which workers are trying to invalidate arbitration requirements to bring a class action alleging violations of federal retirement law based on directors selling company stock to the plan at an inflated price.
According to the ruling, appeals court judges found that ERISA suits generally could be sent to arbitration, but the Triad provision was invalid under the effective vindication doctrine because it prevented plan participants from seeking relief and obtaining remedies under ERISA.
The judges cited an exception to the Federal Arbitration Act that lets courts overrule an arbitration agreement if it blocks a party from being able to bring claims under federal law.
Although the ruling found that the particular arbitration provision was unenforceable, it was the circuit court’s first decision broadly approving of arbitration of ERISA claims. That’s because the validity of arbitration provisions became a major issue after a Ninth Circuit ruling in 2019 struck down decades of case law that said fiduciary breach lawsuits under ERISA couldn’t be arbitrated, leading many companies to write new arbitration language into their plans.
The case is James Smith v. Board of Directors of Triad Manufacturing Inc. et al., case number 20-2708, in the U.S. Court of Appeals for the Seventh Circuit.