In Munro v. University of Southern California, No. 17-55550 (9th Cir. July 24, 2018) (click here for a copy of the decision), the Ninth Circuit held that claims for breach of fiduciary duty in the administration of ERISA plans are not covered by an arbitration agreement between an employee and employer. The court reasoned that such claims for breach of fiduciary duty are brought on behalf of the ERISA plan, not on behalf of the employees. By signing an arbitration agreement, an employee can waive a judicial forum only for claims belonging to the employee. However, the fiduciary duty claims at issue belonged to the ERISA plan, not employees.
This case is analogous to the Iskanian line of authority from California. In Iskanian and its progeny, courts have held that claims pursuant to a state’s private attorney general act are not covered by an arbitration clause signed by an employee because the claims belong to the government, not the employee initiating the lawsuit. The Ninth Circuit in Munro recognized that the ERISA claims were similar to such qui tam actions, where the claims really belong to the government, not the private party who files the lawsuit.