Contributing Author: Kristine Custodio Suero, Advanced Certified Paralegal
ERISA litigation is often misunderstood.
Many employees do not realize that claims involving retirement plans, disability benefits, life insurance benefits, and other employee benefits are governed by a unique federal law known as the Employee Retirement Income Security Act of 1974 (ERISA). Likewise, employers, fiduciaries, and plan service providers may not fully appreciate how ERISA disputes differ from traditional business or employment litigation.
Whether you are a plan participant, fiduciary, employer, or service provider, understanding the basics of ERISA litigation can help you better navigate this highly specialized area of law.
Below are answers to some of the most frequently asked questions about ERISA litigation.
What Is ERISA Litigation?
ERISA litigation generally refers to lawsuits involving employee benefit plans governed by ERISA.
These cases may involve:
- denied disability benefits
- denied life insurance benefits
- retirement plan disputes
- fiduciary breach claims
- pension disputes
- excessive fee litigation
- employee stock ownership plan (ESOP) disputes
- Department of Labor enforcement matters
Unlike many other types of lawsuits, ERISA cases often involve specialized procedural and substantive rules.
What Does ERISA Stand For?
ERISA stands for the Employee Retirement Income Security Act of 1974.
Congress enacted ERISA to establish minimum standards for private-sector employee benefit plans and to protect plan participants and beneficiaries.
ERISA governs many:
- 401(k) plans
- pension plans
- health plans
- disability plans
- life insurance plans
- employee stock ownership plans (ESOPs)
Can I Sue Under ERISA?
In some circumstances, yes.
ERISA provides participants, beneficiaries, fiduciaries, and the Department of Labor with certain rights to bring claims under federal law.
The specific rights available depend on the type of dispute involved.
For example, ERISA litigation may involve:
- recovery of benefits
- enforcement of plan rights
- fiduciary breach claims
- equitable remedies authorized under the statute
Because ERISA contains detailed procedural requirements, the process often differs significantly from other types of litigation.
What Is the Most Common Type of ERISA Lawsuit?
One of the most common types of ERISA litigation involves disputes over benefits.
Examples include:
- long-term disability benefit denials
- life insurance benefit disputes
- pension benefit claims
- retirement plan benefit determinations
In recent years, fiduciary breach litigation involving retirement plans and excessive fees has also become increasingly common.
What Is a Breach of Fiduciary Duty Under ERISA?
ERISA fiduciaries are required to act prudently and solely in the interest of plan participants and beneficiaries.
A fiduciary breach claim may arise when it is alleged that a fiduciary failed to meet those obligations.
Examples may include allegations involving:
- imprudent investment decisions
- excessive fees
- conflicts of interest
- failure to monitor service providers
- misuse of plan assets
Whether a fiduciary breach occurred depends on the specific facts and circumstances involved.
What Happens Before an ERISA Lawsuit Is Filed?
In many ERISA benefit claims, participants must first complete the plan's internal claims and appeals process.
This process is often referred to as exhausting administrative remedies.
For example, before litigation can proceed, a participant whose benefits are denied is generally required to:
- submit a claim
- receive a decision
- pursue an internal appeal
before litigation can proceed.
The applicable requirements vary depending on the type of claim and the governing plan provisions.
Why Is the Administrative Record Important?
In many ERISA benefits cases, courts focus heavily on the administrative record.
The administrative record generally consists of the information submitted and considered during the claim and appeal process.
Unlike traditional litigation, courts often limit their review to materials contained in that record.
As a result, the administrative process can play a significant role in the outcome of later litigation.
What Court Handles ERISA Cases?
Many ERISA lawsuits are filed in federal court.
ERISA is a federal statute, and federal courts frequently hear disputes involving employee benefit plans.
However, certain claims may involve state law issues, jurisdictional questions, or other procedural considerations.
What Remedies Are Available in ERISA Litigation?
The remedies available in ERISA litigation depend on the type of claim being asserted.
Depending on the circumstances, remedies may include:
- recovery of benefits
- enforcement of plan rights
- equitable relief
- correction of fiduciary violations
- attorney's fees in certain circumstances
ERISA does not always provide the same remedies available in other types of civil litigation.
What Is an ERISA Fiduciary?
A fiduciary is generally a person or entity that exercises discretionary authority or control over a plan, its administration, or its assets.
Potential fiduciaries may include:
- plan sponsors
- plan committees
- trustees
- investment managers
- certain service providers
Importantly, fiduciary status is often determined by function rather than title.
What Triggers a Department of Labor Investigation?
The U.S. Department of Labor is responsible for enforcing many ERISA provisions.
Investigations may arise from a variety of circumstances, including:
- participant complaints
- late contributions
- reporting issues
- fiduciary concerns
- prohibited transaction allegations
Not every compliance issue results in litigation, but regulatory scrutiny can lead to significant consequences for plans and fiduciaries.
What Is ERISA Mediation?
Many ERISA disputes are resolved before trial through mediation.
Mediation is a confidential process in which a neutral third party helps facilitate settlement discussions between the parties.
ERISA mediation has become increasingly common in both benefits litigation and fiduciary breach cases.
Are ERISA Cases Different From Other Lawsuits?
Yes.
ERISA litigation involves a unique statutory framework that often differs from traditional employment, business, or personal injury litigation.
Differences may include:
- administrative exhaustion requirements
- standards of judicial review
- limitations on available remedies
- fiduciary-specific obligations
- specialized procedural rules
Because of these distinctions, ERISA cases frequently require a different strategic approach than other forms of litigation.
What Can Employers and Fiduciaries Do to Reduce Litigation Risk?
While no organization can eliminate litigation risk entirely, many disputes can be mitigated through strong governance practices.
Examples include:
- maintaining clear plan documentation
- establishing fiduciary governance structures
- documenting decision-making processes
- monitoring service providers
- providing fiduciary education and training
- conducting periodic compliance reviews
Strong governance practices often serve as an important foundation for effective plan administration.
Why Is ERISA Litigation Becoming More Common?
Several trends have contributed to increased ERISA litigation in recent years.
These include:
- growth in excessive fee litigation
- increased focus on fiduciary responsibilities
- evolving employee benefit structures
- increased regulatory scrutiny
- greater participant awareness of rights (particularly in the age of artificial intelligence)
As employee benefit plans continue to evolve, litigation and enforcement activity will likely remain an important area of focus.
Concluding Thoughts
ERISA litigation sits at the intersection of employee benefits, fiduciary responsibility, regulatory compliance, and federal law.
Whether a dispute involves a denied benefit claim, fiduciary allegations, retirement plan administration, or Department of Labor enforcement activity, understanding the unique framework governing ERISA matters is essential.
While every situation is different, organizations and participants alike benefit from understanding the rules, responsibilities, and processes that shape ERISA litigation.
About Schechter Benefits Law Group LLP
Schechter Benefits Law Group LLP focuses on ERISA and employee benefits law, including ESOPs, employee ownership transactions, fiduciary counseling, retirement plan compliance, and benefits litigation. The firm advises plan sponsors, fiduciaries, trustees, and organizations navigating complex employee benefits and governance issues.
Organizations evaluating employee ownership strategies or ERISA-related considerations involving workforce and succession planning may benefit from experienced legal counsel familiar with the evolving landscape of employee benefits law.
*Nothing stated herein is to be construed as legal or tax advice and shall not form any attorney-client relationship. Each individual situation is unique. Please contact us and speak with one of our attorneys regarding your individual situation.
