April 20, 2021

ERISA Litigation Roundup: Forum Selection Clause in Plan Recognized as Valid

Denying a petition for a writ of mandamus, a Ninth Circuit panel has held that the district court properly enforced a forum selection clause contained in an ERISA-sponsored 401(k) plan in litigation regarding the alleged improper management of the plan. In re Becker, 2021 WL 1219745 (9th Cir. Apr. 1, 2021).

After the plaintiff filed suit alleging ERISA violations in connection with alleged improper management of the Wells Fargo 401(k) plan in the Northern District of California, Wells Fargo moved to transfer the case to the District of Minnesota pursuant to a forum selection clause contained in the plan. The district court granted the motion to transfer, and the plaintiff sought a writ of mandamus to rescind that order. The Ninth Circuit rejected the request, noting that “[c]ourts are in near universal agreement” that “ERISA does not bar forum selection clauses,” and holding that the forum selection clause “does not undermine ERISA’s goal of allowing ‘ready access to the Federal courts.’” The appellate court further noted that the forum selection clause furthered other goals of ERISA by encouraging uniformity in connection with decisions related to the plan.

What This Means for Plan Sponsors

Given widespread acceptance of forum selection clauses, plan sponsors should consider including them in plans to maintain uniformity in defending plan-related claims, particularly when participants are spread over multiple jurisdictions.

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