Summary#
The Employee and Retiree Access to Justice Act would amend the Employee Retirement Income Security Act of 1974 (ERISA); it would not create a separate program. Its stated goal is to make certain arbitration, claim-waiver and benefit-review terms unenforceable. The bill is not law: it has been introduced in the Senate and referred to committee.
- For claims under ERISA’s civil-action section, a term requiring arbitration before a dispute arises would be unenforceable. The bill also covers certain common-law claims involving a plan or plan benefit.
- Arbitration agreed to after a dispute arises would be allowed only under strict conditions, including written notice, at least 45 days to consider the final terms, and the participant’s written consent.
- Terms that waive a participant’s ability to pursue or support individual, joint, class, representative or collective claims would be unenforceable in the situations set out in the bill.
- For plans other than multiemployer plans, terms requiring courts to defer to a plan’s benefit decision or interpretation would be unenforceable; courts would use de novo review (decide the matter anew).
- Plans, employers, plan sponsors and people engaged to administer or operate plans could not require or make agreements that the bill says are unenforceable. A court, not an arbitrator, would decide whether an arbitration term is valid.
- The changes would apply to claims or disputes arising on or after enactment, even if an existing plan document contains a covered term. There is a limited transition for updating plan documents.
What it means for you#
- Plan participants and beneficiaries: You could not be required to agree in advance to arbitration of a claim under ERISA’s civil-action section. After a dispute arises, you could agree to arbitration only if the bill’s conditions are met. You could not be required to give up covered group or representative claims through a prohibited term.
- People bringing benefit claims: For plans other than multiemployer plans, a plan term could not require a court to give special deference to the plan’s benefit decision or interpretation. The bill does not change benefit eligibility or benefit amounts.
- Employers, plan sponsors, plans and plan administrators: They would have to follow the restrictions on required arbitration and other covered terms. The bill does not create a process for participants to apply for arbitration or for every plan decision to be reviewed.
- Workers and retirees generally: This is not a ban on arbitration for all workplace disputes. Its rules concern disputes related to an ERISA plan or plan benefit.
Money#
No cost information is available in the supplied material.
- The Labor Secretary may issue regulations, including rules about the required notices.
- The bill requires notices and plan-document updates, but gives no estimate of related government or plan costs, staffing needs, or savings.
What is unclear#
- The supplied material does not include the current ERISA text, so the bill’s changes cannot be checked against all current rules or enforcement processes.
- The bill does not define every boundary of a “covered provision” related to a plan or plan benefit. How that applies to some agreements may need to be resolved by courts or regulations.
- The Labor Secretary may identify arbitration terms that result from bona fide collective bargaining, but the bill does not set out how that determination would work.
- The bill does not explain how these rules would interact with other existing procedures for resolving plan disputes.
- The transition delays violations based only on outdated plan documents, but does not excuse conduct that otherwise fails to follow the new rules.
Case for#
- The bill appears intended to let participants decide how to pursue a claim after they know a dispute exists, rather than being bound by an advance arbitration term.
- A possible argument for the bill is that it preserves access to individual and group claims that could be restricted by waivers in plan-related agreements.
- Requiring courts to decide whether arbitration terms are valid would keep that decision out of the hands of the arbitrator whose authority is being challenged.
Case against#
- One concern is that the bill would sharply restrict advance arbitration agreements, even where a participant might prefer that method of resolving a dispute.
- The notice, waiting-period and consent requirements for post-dispute agreements could make those agreements harder to use and add administrative work.
- Requiring de novo review for non-multiemployer plans would change how courts review benefit decisions and plan-language interpretations; the bill does not estimate the effects on litigation or costs.
- It is unclear how the collective-bargaining exception would work in practice, and the bill does not provide detailed rules for applying several of its broad terms.