The 10 Largest ERISA Class Action Settlements of 2021
It was a record year for workplace class action settlements in general, with the top 10 ERISA settlements totaling $837.3 million.
February 18, 2022 at 08:37 AM
3 minute read
SlideshowThe original version of this story was published on Law.com
Seyfarth Shaw's annual survey of workplace class action settlements is here, and it vividly illustrates what a gangbuster year 2021 has been for such settlements, in spite of the challenges presented by the lingering COVID-19 pandemic. According to the report, the top 10 workplace class action settlements amounted to a record $3.62 billion last year—more than doubling the $1.58 billion of 2020. One of the reasons for that dramatic uptick, according to Seyfarth partner Gerald Maatman Jr., was that "both ERISA and wage and hour settlements more than doubled in 2021." The top 10 ERISA settlements totaled $837.3 million last year, a massive increase over 2020's total of $380.1 million. ERISA litigation had its most intense concentration last year in "class action filings challenging defined contribution plan (401(k) and 403(b) plan) fees and investments," the report states. With a Supreme Court decision in Hughes v. Northwestern University expected in the spring, Seyfarth Shaw anticipates the burdens plaintiffs face in maintaining these cases to be clarified. Arbitration also made repeat appearances in the ERISA litigation space, with a noteworthy decision by the Seventh Circuit in Smith v. Board of Directors of Triad Manufacturing, Inc. The court refused to compel a plan's provision for arbitration that would have deprived the plaintiff's ability to pursue relief plan-wide. "If adopted by other circuits," the report states, "the ruling has the potential to foreclose employers' attempts to avoid arbitration of plan-wide claims." With ERISA class action pleading standards and the effectiveness of arbitration agreements likely to be in the spotlight, Seyfarth Shaw predicts two more trends for 2022. First, they expect to see more litigation about the scope of ERISA preemption. "The Supreme Court is considering a petition for review of Howard Jarvis Taxpayers Association v. California Secure Choice Retirement Savings Program ... in which the plaintiffs made an ERISA preemption challenge to California's mandate that employers facilitate payroll deduction contribution to a retirement savings program for employees not covered by an employer's retirement plan," says the report. With similar litigation filed in Oregon, 2022 will likely see much discussion about the extent to which ERISA preemption can be skirted by states and local governments in creating mandatory benefit regimes. Second, there may be considerable future litigation regarding participants' ability to challenge mortality assumptions built into retirement plans. Several cases have already been filed, but as of yet no court has reached the merits on any of them. See our slideshow above for 2021's largest settlements in private plaintiff ERISA class actions, and click here to access the full report.
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