The U.S. Supreme Court on Monday declined to hear a petition by Cintas Corp. seeking clarification on rules governing the role of arbitration in ERISA disputes.
The justices, without comment, left standing a pro-plaintiff April 2022 ruling by the 6th U.S. Circuit Court of Appeals, Cincinnati, saying that an ERISA lawsuit filed by two former employees in a company 401(k) plan wasn't subject to arbitration. The appeals court had previously upheld a similar ruling in January 2021 by a federal District Court in Cincinnati.
These courts said compelling arbitration for an ERISA dispute was allowable if an arbitration provision was part of a retirement plan document, but that arbitration provisions in individual employee contracts, as in the Cintas case, didn't extend to ERISA.
Cintas and its fiduciaries asked the Supreme Court to review the decision, arguing that different federal courts had issued different decisions about when arbitration is allowed in addressing ERISA complaints.
"National uniformity is crucial in this area because many employers have employees based in jurisdictions throughout the country, and the uniform treatment of claims brought by ERISA plan beneficiaries is a matter of congressional policy," said the September 2022 petition to the Supreme Court in Cintas Corp. et al vs. Hawkins et al.
The former employees responded Dec. 2, saying there was no need for the justices to grant a writ of certiorari — the formal term for reviewing the case.
"Petitioners ask this court to grant review on an ERISA question that comes up rarely, is easily avoided by plan sponsors, and has been decided the same way in the only two cases that have addressed it," they wrote. "To put it charitably, there is nothing remotely certworthy about this case."
The former employees sued the defendants in December 2019, alleging ERISA violations because the 401(k) plan offered only actively managed investments rather than cheaper index-based investments. They also accused the plan of charging "imprudently expensive" record-keeping fees. The plaintiffs are seeking class-action status.
Cintas Partners Plan, Mason, Ohio, had $3.2 billion in assets as of Dec. 31, 2021, according to the latest Form 5500.
