Decision to Prohibit Forced Arbitration of Claims by University Employees Affirmed.

Position:ARBITRATION
 
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The Ninth Circuit affirms the district court decision to deny the motion by the defendant university to compel arbitration of the plaintiffs' breach-of-fiduciary-duty claims brought under the Employee Retirement Income Security Act of 1974 (ERISA).

The plaintiffs are a class of current and former employees of a university and participants in two ERISA plans. The defendant is the university that employs the plaintiffs and sponsors the plans.

As part of their employment contracts, the plaintiffs were required to sign arbitration agreements that require arbitration of all claims that either the plaintiffs or the defendant has against the other party to the agreements. The employment agreements expressly cover claims for violations of federal law.

The plaintiffs filed a class action lawsuit alleging multiple breaches of fiduciary duty in the administration of the plans. The defendant filed a motion to compel arbitration, arguing that the plaintiffs' employment agreements prohibit them from litigating their claims on behalf of the plans. The district court denied the defendant's motion, determining that the arbitration agreements do not bind the plans because the plans did not themselves consent to arbitration of the claims and that the plaintiffs entered into the agreements in their individual capacities, not on behalf of the plans. The defendant now appeals.

Looking at the arbitration provisions in the employment agreements, the parties agreed to arbitrate all claims that the plaintiffs may have against the defendant or any of its related entities and all claims that the defendant may have against the plaintiffs. The court finds that this language does not extend to claims that other entities have against the defendant.

Here, the claims brought by the plaintiffs arise from the alleged fiduciary...

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