On April 1, 2021, the Ninth Circuit became the third circuit court to conclude that a forum-selection clause in an ERISA 401(k) plan is enforceable.  The Ninth Circuit thus denied a petition for mandamus seeking to overturn a district court decision transferring an ERISA action from the Northern District of California to the District of Minnesota.  In re Becker v. United States Dist. Court, No. 20-72805, __F.3d__ (9th Cir. Apr. 1, 2021).

The plaintiff in the Becker case is a former Wells Fargo employee and participant in the company’s 401(k) plan who brought a putative class action against Wells Fargo and others, alleging that defendants’ inclusion of certain Wells Fargo-affiliated plan investment alternatives breached their fiduciary duties of prudence and loyalty and violated ERISA’s prohibited transaction rules.  Despite the plan’s forum-selection clause, which specifies the District of Minnesota as the exclusive venue for plan-related disputes, the plaintiff filed her complaint in the Northern District of California.

Proskauer moved to transfer the case to the District of Minnesota pursuant to the plan’s forum-selection clause.  The district court granted the motion, reasoning that forum-selection clauses are presumptively valid and plaintiff did not meet her “heavy burden” to challenge this one.  After the district court denied plaintiff’s request to stay the order, she petitioned the Ninth Circuit for a writ of mandamus compelling the district court to rescind its transfer order.

The Ninth Circuit denied the “extraordinary remedy” of mandamus, holding that the plan’s forum-selection clause was enforceable.  The Court emphasized the presumptive validity of forum-selection clauses and reasoned that nothing in ERISA prohibits plans and participants from agreeing on a forum for litigating their disputes.  The plaintiff had argued that, because ERISA’s venue provision enumerates three locations where a suit “may be brought,” any agreement to limit venue violates the text of ERISA and the statute’s express purpose of providing plan participants with “ready access to federal courts.”  The Court rejected plaintiff’s argument and explained that while ERISA’s venue provision provides that an action “may be brought” in three specified locations, it did not prevent Wells Fargo and Becker from agreeing in advance to litigate in just one—the place where the plan is administered.  Furthermore, the forum-selection clause promoted, rather than hindered, ERISA’s goal of providing ready access to the federal courts by encouraging uniformity and guaranteeing a federal forum.  The Court also cited its recent decision enforcing an arbitration provision in a 401(k) plan in Dorman v. Schwab as demonstrating that plan participants can agree to a preferred forum through participation in a 401(k) plan.  The plan’s forum-selection clause was therefore enforceable, and the district court did not clearly err in transferring the case.

The Proskauer team representing Wells Fargo includes partners Russell L. Hirschhorn, John E. Roberts, and Myron D. Rumeld, senior counsel Joseph Clark, and associates Tulio Chirinos and Kyle Hansen.

Posted in 401(k) Plans, Arbitration
Tags: 401(k) Plan, Arbitration, ERISA, Fiduciary, forum selection clause, mandamus, Venue
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Photo of Russell Hirschhorn Russell Hirschhorn

“Russell has strong subject matter expertise.”

“Russ is extremely responsive and practical. He listens to the client perspective and is hands on and engaged, while also delegating work as appropriate.” 

-Chambers USA

Russell L. Hirschhorn is co-head of Proskauer’s premier ERISA Litigation Group…

“Russell has strong subject matter expertise.”

“Russ is extremely responsive and practical. He listens to the client perspective and is hands on and engaged, while also delegating work as appropriate.” 

-Chambers USA

Russell L. Hirschhorn is co-head of Proskauer’s premier ERISA Litigation Group, which is a significant component of the firm’s ERISA Practice Center and globally renowned Labor and Employment Law Department.  Russell’s practice focuses on employee benefits issues arising under the Employee Retirement Income Security Act of 1974 (ERISA), including class action and complex litigation, U.S. Department of Labor and Internal Revenue Service investigations, and counseling clients on best practices to avoid litigation.

Russell has more than two decades of experience representing plan sponsors, fiduciaries, trustees, and service providers across the country.  His work on behalf of clients has included all types of plans, including 401(k) plans, 403(b) plans, defined benefit plans, employee stock ownership plans, executive compensation plans, health and welfare plans, multiemployer plans, multiple employer plans, and severance plans.  And, it has included the full gamut of claims arising under ERISA, including excessive investment and plan administration fees and investment underperformance claims; cash balance plan litigation; claims for benefits; company stock fund cases; claims for delinquent contributions; ERISA § 510 claims; ERISA statutory claims; ESOP litigation; executive compensation claims; independent contractor claims; independent fiduciary representations; multiemployer fund litigation; plan service provider claims; recoupment of plan overpayments; retiree benefits claims; severance plan claims; and withdrawal liability claims.

Deeply dedicated to pro bono work, Russell has been recognized on several occasions for his commitment to pro bono work including by President George W. Bush in receiving the U.S. President’s Volunteer Service Award.  His pro bono work has included serving as lead litigation counsel in several impact litigations: on behalf of social security recipients whose benefits were unlawfully suspended based on an outstanding warrant, deaf and hard of hearing prisoners in Louisiana prisons seeking disability accommodations, and Swartzentruber Amish in upstate New York to obtain religious exemptions from certain building code requirements. Russell also was a principal drafter of several amicus briefs for the Innocence Project, a legal non-profit committed to exonerating wrongly convicted people.

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Photo of Myron Rumeld Myron Rumeld

Myron D. Rumeld has over thirty-five years of experience handling all aspects of ERISA litigation at both the trial and appellate level. His broad experience includes numerous representations of 401(k) plan fiduciaries defending class action employer stock and excessive fee claims, and representations…

Myron D. Rumeld has over thirty-five years of experience handling all aspects of ERISA litigation at both the trial and appellate level. His broad experience includes numerous representations of 401(k) plan fiduciaries defending class action employer stock and excessive fee claims, and representations of large multiemployer pension and health fund trustees in the defense of a large assortment of fiduciary breach lawsuits. He has defended class action suits against Charles Schwab, Barnabas Health, Inc., Neuberger Berman, and the American Federation of Musicians Pension Fund, among many other clients; and he has tried cases for The Renco Group and Foot Locker, Inc., among others.

Chambers USA cites Myron as a “brilliant” and “sensational litigator,” who is “sharp, articulate, clever, and deeply committed to the work he does.” Similarly, The Legal 500 United States has called Myron an “outstanding ERISA lawyer.”

Myron is presently co-chair of Proskauer’s ERISA Litigation Group.  He previously served as co-chair of Proskauer’s nationally renowned Employee Benefits & Executive Compensation Group. He also served as the past co-chairman of the Board of Editors for the American Bar Association publication, Employee Benefits Law (BBNA).

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Photo of John E. Roberts John E. Roberts

John E. Roberts is a partner in the Litigation Department and co-chair of the firm’s Appellate Practice Group, which was named to the National Law Journal’s 2020 Appellate Hot List. He litigates cutting-edge appellate matters in state and federal appellate courts across the…

John E. Roberts is a partner in the Litigation Department and co-chair of the firm’s Appellate Practice Group, which was named to the National Law Journal’s 2020 Appellate Hot List. He litigates cutting-edge appellate matters in state and federal appellate courts across the country, including the United States Supreme Court.

John’s advocacy led to a favorable decision by the Supreme Court in the landmark patent case, Nautilus Inc. v. Biosig Instruments, Inc., and ultimately victory on remand at the United States Court of Appeals for the Federal Circuit. John has represented the Financial Oversight and Management Board for Puerto Rico—the entity created by Congress to oversee the restructuring of Puerto Rico’s massive public debt—in dozens of appeals at the United States Court of Appeals for the First Circuit. He has also prevailed in some of the most important ERISA appeals in recent years.

John maintains a robust pro bono practice and is a member of the firm’s Pro Bono Initiative Committee. For more than five years, he has provided pro bono representation to a criminal defendant in a death penalty case. He has also provided pro bono representation to various advocacy organizations in high-impact litigations, including the Brady Center to Prevent Gun Violence, Citizens for Juvenile Justice, the Bronx Defenders, and the National Immigration Litigation Alliance.

John graduated magna cum laude from the New York University School of Law, where he was an articles editor for the New York University Law Review. He received his B.A. from Harvard University, where he graduated cum laude. He served as a clerk to the Honorable Bruce M. Selya, the most prolific opinion-writer in the history of the United States Court of Appeals for the First Circuit. He is an Adjunct Professor at the Roger Williams School of Law in Bristol, Rhode Island, where he teaches appellate advocacy, and he is a co-author of the treatise Principles of Appellate Litigation: A Guide to Modern Practice.

Before John attended law school, he worked as a journalist for National Public Radio for many years, where he was a co-creator of the national news program, On Point, and won several awards for his reporting. He lives in Providence, Rhode Island, with his husband, Michael.

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Photo of Joseph Clark Joseph Clark

Joseph E. Clark is a senior counsel in the Labor & Employment Law Department and a member of the Employee Benefits & Executive Compensation Group where he focuses on complex employee benefits litigation.

Joe represents a diverse range of clients from the time…

Joseph E. Clark is a senior counsel in the Labor & Employment Law Department and a member of the Employee Benefits & Executive Compensation Group where he focuses on complex employee benefits litigation.

Joe represents a diverse range of clients from the time a claim is asserted through trial or arbitration, whether it is defending plan fiduciaries against class action claims of fiduciary breach or prohibited transactions or in connection with government investigations, or defending employers against multiemployer pension plan claims for withdrawal liability.  These clients include financial service providers, investment managers, Fortune 500 corporations, and benefit plan committees.

Outside of the context of litigation, Joe also advises fiduciary clients regarding their fiduciary responsibilities and employers regarding various withdrawal liability issues.

A co-editor of Proskauer’s Employee Benefits & Executive Compensation blog, Joe has authored pieces on employee stock ownership plans, excessive fee claims, fiduciary breach, investigation and determination of benefits claims, and best practices for plan drafting. He has also published several articles regarding these issues in BNA Insights.

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