Building on United States ex rel. Welch v. My Left Foot Children’s Therapy, LLC (9th Cir. 2017) 871 F.3d 791, which held that a standard arbitration clause in an employment agreement did not cover a False Claims Act suit by the employee against the employer because such a claim is by the United States, not a party to the arbitration agreement, this decision holds that the same reasoning bars arbitration of an employee’s claim that the employer has breached its fiduciary duties under ERISA in managing an employee benefit plan. Such a breach of fiduciary duty claim seeks relief on behalf of the benefit plan, not the individual plaintiff as shown by the fact that the individual plaintiff cannot settle the case on his own. The benefit plan was not a party to the arbitration agreement, and that agreement called only for arbitration of disputes between employee and employer. So the district court did not err in denying the employer’s motion to compel arbitration.
Ninth Circuit Court of Appeals (Thomas, C.J.); July 24, 2018; 2018 U.S. App. LEXIS 20522