Plans, Perks & Pay | Employee Benefits & Executive Compensation Blog

On the same day the Ninth Circuit denied arbitration in Munro v. University of Southern California, a district also denied a motion to compel arbitration of a former employee’s ERISA breach of fiduciary duty and prohibited transaction claims in Brown v. Wilmington Trust, N.A., No. 3:17-cv-250 (S.D. OH July 24, 2018).

The U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s opinion that the University of Southern California could not compel arbitration of ERISA claims brought by its employees despite the fact that the parties entered into a broad arbitration agreement. Munro v. University of Southern California, No. 17-55550 (July 24, 2018). The reason? The agreement did not extend to claims brought on behalf of the employees’ retirement plan.

As discussed below, even though a church plan was operated in accordance with ERISA and the plan sponsor may have thought it was required to do so, as long as no 410(d) election was made, it is “no harm, no foul” for the plan’s status as a church plan.

I previously examined the proposed rule by the U.S. Department of Labor (DOL) to expand so-called Association Health Plans, or AHPs, under the Employee Retirement Income Security Act of 1974 (ERISA). In a nutshell, the proposed rule was designed to make it easier for employers to form a group in order to provide health benefits to their employees through an AHP. These new AHPs would have more freedom to restrict benefits in order to provide more affordable coverage.