I've been sorta jumping out of my skin for Argo to come out from the moment I saw the first trailer. It looked to be nothing short of awesome. I guess, it turns out, that I was wrong about the movie. It's not merely awesome. Rather, this might be one of the best movies ever made. Ben Affleck, an obviously smart guy and, by all appearances, an apparently all-around good man, should be very proud. Wow. Start counting Oscars.*
From a movie set against the backdrop of the release of the American hostages taken during the Iranian Hostage Crisis, let's go briefly (as you understandably roll your eyes) to . . . general releases as potential defenses to class actions under ERISA for breaches of fiduciary duty.
With the substantial number of cases out there in which courts decline to enforce a general release as a defense against plaintiffs who would cause a suit to be brought against an ERISA fiduciary, one might reasonably conclude that, as a matter of public policy, releases can't stop fiduciary lawsuits. But, not so fast. You may want to read the cases closely, as I think you'll see that many of the cases that decline to enforce a general release against such a plaintiff don't hold that the release CAN'T reach an ERISA fiduciary claim, but rather hold that the particular release, as drafted, DID NOT reach ERISA fiduciary claims.
Why? Well, let's go back to basics. LaRue confirms that an ERISA fiduciary claim is a claim by the plan, which may be brought through a participant. Thus, the claim isn't the participant's, but rather is the plan's. Now, if one looks to typical release language, the releasor, on behalf of the releasor and other related parties, is releasing the releasor's own claims. However, if the ERISA fiduciary claim is the plan's, and not the participant's, then maybe the release of the releasor's claims, when read narrowly by the court (as may well be expected), simply won't extend to the plan's claim. (Indeed, it seems clear that no one participant or group of participants can cause a plan to release its potential claims against a plan fiduciary.)
But, if the release is broadly extended to include a covenant not to sue - a covenant that would extend to agreeing not to cause a plan to bring a fiduciary claim under ERISA - then maybe the release, or more precisely the covenant not to sue, could indeed be effective so as to foreclose the individual's ability as a plan participant to cause the plan to bring a fiduciary claim. Stated another way, the right question isn't whether a general release can in theory reach ERISA fiduciary claims, but is whether any particular release has in fact been drafted to do so.
The result that people can agree not to cause plans to bring ERISA claims seems right to me, and not the least bit offensive. When a general release is procured, the parties' understanding arguably is usually that the released party won't see the releasor in court, not that the releasor can slide back into court because of the LaRuian nuance that the ERISA fiduciary claim is the plan's not the participant's. In this regard, George v. Kraft Foods Global, Inc., 251 F.R.D. 338, 346-47 (N.D. Ill. 2008), later dec'n, 48 Empl. Benefits Cas. (BNA) 1929 (N.D. Ill. 2010), states: "We are not prepared to say that a release signed upon an employee’s termination can never waive claims brought by a class of plaintiffs on behalf of a plan. It strikes us that this is a matter… best determined by the language of the releases at issue. . . . .” More recent cases with interesting discussions of these matters include In re Schering-Plough ERISA Litigation, 589 F.3d 585 (3d Cir. 2009), and Howell v. Motorola, Inc., 633 F.3d 552 (7th Cir. 2011). Some food for thought, as one considers the manner in which releases are drafted, generally?
Now, go see Argo.
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* Next up - Gangster Squad. Penn/Brolin/Gosling/Stone. Geez, it looks like, after some lean years, we've got some real cinematic fun on our hands.
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