The Third Circuit refused to enforce a mandatory arbitration clause with a class action waiver in an ESOP, finding that the class action waiver deprived participants of statutory rights. The ESOP plan added the clause at issue in 2017. When plaintiffs filed a putative class action in 2019 asserting fiduciary breach and prohibited transaction claims
Employee Stock Ownership Plan (ESOP)
Seventh Circuit Revives State Law Claims Against Executives Acting As “Dual-Hat” Fiduciaries
By Hardev S. Chhokar & Howard Shapiro on
Posted in Employee Stock Ownership Plan (ESOP), ERISA
The Seventh Circuit ruled recently that ERISA does not preempt certain state law claims against directors and officers because ERISA’s text and purpose contemplate parallel corporate state-law liability against executives who act as “dual hat” fiduciaries.
In Halperin v. Richards, Plaintiffs were co-trustees of a Chapter 11 liquidating trust for Appvion, a paper company that…