The scoreboard
Since December 2025, two more federal appeals courts—the Eleventh and the Fifth—have joined what is now a settled consensus: ERISA plans cannot use an arbitration clause to limit group claims and thus strip participants of plan-wide relief. Eight circuits have now made similar rulings.
The vehicle is the effective-vindication doctrine—the principle that provisions within an arbitration agreement that prevent a party from effectively vindicating statutory rights are not enforceable. The Eleventh Circuit summarized the state of play when it joined the line in Williams v. Shapiro, 161 F.4th 1313 (11th Cir. 2025): the doctrine had been applied to the waiver of ERISA statutory rights “by six of our sister circuits in the last five years,” and “no circuits have rejected the doctrine.” For sponsors, the practical consequence is blunt: If your plan added an arbitration provision in the last six years, it likely contains language that every circuit to consider it has invalidated.
What follows is a list of the decisions, the clause feature that failed in each, and what happened to the rest of the arbitration program:
- Second Circuit: Cedeno v. Sasson , 100 F.4th 386 (2d Cir. 2024)—Failed clause: representative-capacity bar plus remedy limitation capping recovery at the claimant’s own accounts. Severability: express non-severability clause; entire arbitration procedure void.
- Second Circuit: Duke v. Luxottica U.S. Holdings Corp., 167 F.4th 16 (2d Cir. 2026)—Failed clause: individual-basis waiver in a dispute resolution agreement the participant signed, applied to a §502(a)(2) claim on behalf of a defined benefit plan. Severability: not reached; the representative claim proceeds in court while the participant’s individual claim goes to arbitration.
- Third Circuit: Henry ex rel. BSC Ventures Holdings, Inc. Employee Stock Ownership Plan, 72 F.4th 499 (3d Cir. 2023)—Failed clause: class action waiver prohibiting statutorily authorized remedies. Severability: clause unenforceable; arbitration denied.
- Fifth Circuit: Parrott v. International Bancshares Corp., 167 F.4th 728 (5th Cir. 2026)—Failed clause: representative-capacity bar plus individual-relief-only limitation; separate standard-of-review provision voided as exculpatory. Severability: ambiguous; remanded for the district court to decide.
- Sixth Circuit: Parker v. Tenneco, Inc., 114 F.4th 786 (6th Cir. 2024)—Failed clause: representative-capacity bar plus account-level remedy cap, notwithstanding an express carve-out for injunctive relief. Severability: non-severable; arbitration procedure unenforceable.
- Seventh Circuit: Smith v. Board of Directors of Triad Manufacturing, Inc., 13 F.4th 613 (7th Cir. 2021)—Failed clause: bar on any remedy benefiting anyone other than the claimant, which foreclosed removal of the plan trustee. Severability: non-severable arbitration provision; the §502(a)(2) claim may not be arbitrated and proceeds in court.
- Ninth Circuit: Platt v. Sodexo, S.A., 148 F.4th 709 (9th Cir. 2025)—Failed clause: health and welfare plan provision requiring that claims “be brought in a party’s individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding”; participant had not consented to the amendment. Severability: general severability clause; remanded for the district court to decide in the first instance.
- Ninth Circuit: Pover v. Capital Group Cos., No. 24-5298, 2026 WL 2196257 (9th Cir. July 30, 2026)—Failed clause: plan waiver of claims brought on a “class, collective, or representative basis.” Severability: express fallback sent representative claims to court by its own terms.
- Tenth Circuit: Harrison v. Envision Management Holding, Inc. Board of Directors, 59 F.4th 1090 (10th Cir. 2023)—Failed clause: bar on any remedy benefiting anyone other than the claimant, plus account-level cap on §502(a)(2) relief. Severability: express non-severability clause; entire arbitration procedure void.
- Eleventh Circuit: Williams v. Shapiro, 161 F.4th 1313 (11th Cir. 2025)—Failed clause: representative-capacity bar plus bar on relief to any individual or entity other than the claimant. Severability: express non-severability clause under Georgia law; procedure invalidated entirely.
The reasoning is uniform. ERISA §409(a) makes a breaching fiduciary “personally liable to make good to such plan any losses to the plan,” requires restoration of “any profits” made through use of plan assets, and authorizes “such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary.” As the Ninth Circuit put it in Platt, §502(a)(2) “acts as the vehicle for plan participants to obtain the relief made available by §409(a).” Because that relief runs to the plan, the Second Circuit held in Cedeno that a §502(a)(2) claim is “inherently representational.” A clause requiring all claims to be brought “solely in the Claimant’s individual capacity and not in a representative capacity” therefore does not change the forum—it eliminates the claim.
Every court has been careful about what it is not holding. Arbitration is fine, and so are class and collective action waivers—the Tenth Circuit noted that the Supreme Court “has blessed that arbitration maneuver many times.” The exception, that court explained, “applies only where an arbitration agreement alters or effectively eliminates substantive forms of relief that are afforded to a claimant by statute,” and is not triggered merely because an agreement changes the procedures a claimant may use to seek relief.
If your plan language predates 2021, check what you were told
There is a reliance problem that has gone largely unnoticed, and it is the most urgent item for sponsors in the Ninth Circuit. Dorman v. Charles Schwab Corp., 934 F.3d 1107 (9th Cir. 2019), overruled 35 years of Ninth Circuit precedent holding ERISA claims non-arbitrable. In an unpublished companion decision, the same panel appeared to limit recovery to a participant’s own account, foreclosing plan-wide recoveries. Many plans were amended on that advice. The Department of Labor (DOL) and several circuits criticized Dorman’s account-limited reading, and in Platt the Ninth Circuit reached the opposite result on effective vindication without addressing Dorman.
Dorman is arguably distinguishable because its clause contained no explicit term precluding plan-wide relief. But that distinction cuts against sponsors who relied on it: Clauses adopted in Dorman’s wake generally do contain such terms, precisely because Dorman appeared to bless them. A 2019–2021 vintage arbitration amendment is therefore not merely untested—it was likely drafted to a standard the Ninth Circuit has since abandoned, by counsel who at the time had good reason to think it would hold. Language cleared by outside counsel seven years ago should not be assumed to have been revisited since.
Three fixes that have already failed
Most of the remedial drafting we see falls into one of three patterns. Each has now been tested at the appellate level, and each has lost.
Fix No. 1: Carve out injunctive relief. Both the Sixth and Eleventh Circuits rejected it. The clause in Parker expressly provided that “nothing in this provision shall be construed to preclude a Claimant from seeking injunctive relief, including, for example, seeking an injunction to remove or replace a Plan fiduciary.” The Sixth Circuit held that preserving plan-wide injunctive relief “has no bearing on the fact that it eliminates statutorily created plan-wide monetary relief.” In Williams, a later amendment to the plan purported to allow a claimant to seek certain forms of injunctive relief, and the Eleventh Circuit held it “still did not permit representative capacity claims for relief such as disgorgement of profits and restitution to the plan.”
Fix No. 2: Add a savings proviso promising all ERISA-available remedies. This is the fix most sponsors reach for, and it failed in Fleming v. Kellogg Co., No. 23-1966, 2024 WL 4534677 (6th Cir. Oct. 21, 2024) (unpublished), where the clause expressly permitted arbitrators to award any remedy available under ERISA. The Sixth Circuit held the clause was not salvaged, because it limited procedural access to those remedies “by foreclosing the only avenue through which a plaintiff may assert a Section 502(a)(2) claim”—that is, in a representative capacity. The court also called “illogical” the argument that the clause barred only class, collective, or group actions when it separately barred “representative” actions, a term with technical meaning under §502(a)(2). The Fifth Circuit relied on Fleming in Parrott for precisely this point: The distinction between suits for individual accounts and suits for the plan as a whole fails because both are brought in a representative capacity. Fleming matters because earlier decisions had at least suggested that a remedies proviso of this kind could rescue a clause. It cannot.
Fix No. 3: Rely on a general savings or severability clause to preserve individual arbitration. Where the plan’s own language says the waiver is non-severable, the sponsor loses arbitration entirely—that is what happened in Smith, Cedeno, Parker, Harrison, and Williams. Where the plan has only ordinary severability language, the question remains open: the Ninth Circuit in Platt sent severability back to the district court to decide in the first instance rather than resolving it. And where the language is ambiguous, expect a remand; the Fifth Circuit found the phrase “any ... decision to the contrary” genuinely capable of meaning either an arbitrator’s decision or a courts, and sent the question back as a fact issue.
There is a fourth pattern that is worse than a failed fix. The plan in Pover provided that if the waiver were found unenforceable, “any claim on a class, collective, or representative basis shall be filed and adjudicated in a court of competent jurisdiction, and not in arbitration.” The Ninth Circuit called the severability question “easy,” found no illegality in the severance clause itself, and enforced the plan as written. A fallback clause drafted to look protective handed the plaintiff a federal forum by its own terms. The DOL has taken a position on the underlying argument as well: in its amicus brief supporting the participant in Platt, the Secretary of Labor argued that the absence of an express prohibition on plan-wide relief “is immaterial because the representative action waiver has precisely that effect.” Sponsors relying on the absence of explicit remedy-limiting language should understand that both the agency and the courts look to effect rather than form.
What remains open—and what it costs
Two structures have not been foreclosed. The first is delegation. Where a plan incorporates the AAA rules, Ninth Circuit precedent treats that as “clear and unmistakable” evidence that threshold arbitrability questions go to the arbitrator—including unconscionability and effective vindication itself. In Pover, the panel majority never reached delegation because the sponsor raised it for the first time on appeal. The dissent would have enforced it, reasoning that whether AAA incorporation governs delegation is a purely legal question on a complete record, with no prejudice, and squarely within the recognized exceptions to forfeiture. The majority declined anyway. The lesson is narrow and expensive: delegation may well work, but only if it is argued in the district court. The second is a clause drafted to omit the recurring language altogether—one that delegates arbitrability and does not bar representative claims or cap relief at the claimant’s account.
There is one example of drafting that survived. In Yagy v. Tetra Tech, Inc., No. 2:24-cv-01394-JFW-AS (C.D. Cal. May 17, 2024) (unpublished), the Central District of California enforced arbitration language providing that the class action waiver would not limit a claimant’s right to seek, in the claimant’s individual capacity, any relief available under ERISA, and that if any portion of the waiver were found to bar relief the claimant could obtain on an individual basis, the arbitrator would have authority to award that relief—including relief that benefits the plan, such as removal of a fiduciary. Yagy rests on Dorman, which other courts have repeatedly declined to follow, and it has not been tested on appeal. It is a data point, not a template.
Sponsors weighing that structure should consider what success would mean. A clause that survives sends a plan-wide claim—restoration of plan losses, disgorgement of profits, removal of a fiduciary—to a single arbitrator, with no meaningful review of the merits and no published decision to constrain the next claimant. Winning the motion to compel does not end the exposure; it relocates it.
Consent is now a threshold defense
Two decisions have moved participant consent from an afterthought to a front-line issue, and the framework they establish is asymmetric in a way sponsors should understand. The Ninth Circuit held in Platt that an employer cannot unilaterally amend an ERISA plan to add arbitration without consent from the relevant party—and the relevant party depends on the claim. For claims seeking recovery for participants under §§502(a)(1)(B) and 502(a)(3), the participant must consent. For a §502(a)(2) claim seeking recovery for the plan, the plan is the consenting party, and broad unilateral amendment authority in the plan document supplies that consent.
The Fifth Circuit adopted the same split in Parrott, holding the plan consented by ceding amendment authority to the sponsor while the participant had not consented at all. Plan consent is therefore easy to establish; participant consent is not. Platt found none where the arbitration provision was “buried on page 153 of the 170-page SPD,” the transmitting email never said arbitration had been added or that continued participation would constitute agreement, and—the court’s words—“[i]t is unreasonable to expect that Platt would notice a new arbitration provision hidden in a lengthy document.” A named plaintiff who never affirmatively agreed can defeat the motion on that ground alone, without the court ever reaching effective vindication.
This is not only a 401(k) problem
The invalidated provisions have appeared across plan types: ESOPs in Cedeno, Smith, Harrison, and Williams; conventional defined contribution and profit-sharing plans in Parker and Parrott; a defined benefit pension plan in Duke; and a health and welfare plan in Platt. A review confined to the 401(k)-plan document will miss most of the field.
Exposure also extends past the representative-action clause itself. The Fifth Circuit in Parrott separately voided a standard-of-review provision as an unlawful exculpatory clause under ERISA §410(a), 29 USC §1110(a), holding it void “to the extent that it expands beyond the reach of denial-of-benefits claims,” because a more deferential standard of review would by definition relieve fiduciaries of liability. And Platt held that unconscionability challenges to a shortened limitations period and a bar on legal fees are not preempted, because those defenses “are rooted in and arise from federal statutes and federal common law.” ERISA preemption is no answer to them.
Where to start looking
The invalidated provisions share a recognizable vocabulary. A first pass through the plan document, the SPD, and any wrap document should surface the following, though the wording varies from plan to plan and the analysis turns on how the terms operate together rather than on any single phrase.
Address immediately. Language declaring the waiver or remedy limitation non-severable—often phrased as “material and non-severable”—is the costliest term in these clauses, because it means an invalid waiver takes the entire arbitration program down with it.
Fix in the next amendment cycle. Two families of language have drawn invalidation: provisions confining claims to the claimant’s “individual capacity and not in a representative capacity,” and provisions capping relief at the claimant’s own account or barring any remedy that benefits anyone other than the claimant. Whether either is severable depends on the language above.
A provision that surfaces on this first pass does not by itself decide the outcome—several of these decisions turned on how the waiver, the remedy cap, and the severability language operated together, and two circuits sent the severability question back for further development rather than resolving it. But it does mean the clause warrants a closer look now rather than after a complaint arrives, and the same review should take in any shortened limitations period, fee bar, or standard-of-review provision sitting alongside it.
What happens after the motion is denied
Sponsors should plan for the procedural posture that follows, because the litigation does not simply revert to an ordinary class action. In Duke, the Second Circuit held that FAA §3 stays are mandatory only as to claims actually referable to arbitration, and that a district court retains discretion over non-arbitrable claims—even claims “arising out of the same series of events.” The result was that the representative claim proceeded in court while the individual claim went to arbitration, simultaneously. Sponsors who assume a denied motion at least buys a stay should reconsider.
The same decision shows where exposure actually narrows. The Second Circuit applied effective vindication but reversed the finding that the participant had standing to seek monetary payments to the plan, because under Thole v. U.S. Bank, N.A., 590 U.S. 538 (2020), a defined benefit participant’s monthly benefit does not vary with plan performance and any surplus returns to the employer—though the participant retained standing to seek reformation. And in Trauernicht v. Genworth Financial Inc., 169 F.4th 459 (4th Cir. 2026), the Fourth Circuit reversed certification of a mandatory Rule 23(b)(1) class for monetary relief, because injury and recovery turned on how each participant managed his or her own account. Standing and certification, not arbitration, are now the defenses that do the work.
Two caveats worth preserving
First, the consensus rests on a doctrine the Supreme Court has recognized but never actually applied to strike down an arbitration agreement—in the ERISA context or any other. The Eleventh Circuit acknowledged as much in Williams even as it adopted the doctrine, concluding that the Supreme Court’s discussion “cannot be passed off as mere dicta” and that in any event “dicta from the Supreme Court is not something to be lightly cast aside.”
Second, silence is not an opening. The Supreme Court has denied review every time it has been asked to take up one of these decisions—in Harrison, 144 S. Ct. 280 (2023), Henry, 144 S. Ct. 328 (2023), Cedeno, 145 S. Ct. 447 (2024), Parker, 145 S. Ct. 1060 (2025), and most recently Duke, No. 25-1121 (U.S. May 18, 2026). Circuits that converge rather than split are unlikely to draw near-term review, and the circuits that have not yet ruled are not a safe harbor.
Separate opinions have pushed harder. Judge Menashi’s dissent in Cedeno questioned whether the exception survives Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 (2022). Judge McKeague, concurring in Parker, observed that if the doctrine ceases to exist at some point in the future, “so too does the force of the majority opinion,” while acknowledging that binding precedent required the panel to apply it. And the dissent in Pover advanced the textual argument sponsors’ counsel will want to make: that a bar on “representative” suits in a class-action waiver refers to class or collective proceedings, not principal-agent suits on behalf of a plan, and that reading it otherwise would bar every §502(a)(2) claim and render meaningless the same provision’s statement that it applies “to the maximum extent permissible under ERISA.” Defendants who want to preserve these arguments must raise them in the district court.
Where you are determines what to do next
The right response depends on where a sponsor starts from, and the analysis diverges sharply among three groups.
No arbitration clause today. The threshold question is no longer how to draft the clause but whether the clause is worth having. A provision broad enough to stop a plan-wide claim is the provision courts strike; a provision narrows enough to survive permits the plan-wide claim to proceed in arbitration anyway. Arbitration continues to earn its keep for individual benefit claims under §502(a)(1)(B) and for confidentiality and cost control in single-claimant matters. Whether that residual value justifies the exposure turns on plan type, participant population, and the sponsor’s own claims history.
A legacy clause and no pending litigation. This is the audit-and-amend population, and sequencing matters: the waiver and the severability language are a single problem, because repairing one without the other can leave the sponsor worse off than before. Two threshold questions are easy to overlook. Whether the body that adopted the amendment had authority to do so is one—the concurrence in Parker flagged that the committee’s charter permitted only amendments “technical in nature or necessary in the ordinary course” of plan administration, and that adding arbitration appeared to be neither, a defense that turns on the committee charter rather than the plan’s amendment clause. Whether the participant-consent record will bear weight is the other. Both are more easily addressed before a complaint arrives than after; courts have not credited post-suit repairs.
A motion pending, or a complaint already filed. Amending now will not help. Delegation must be raised in the district court, or it is forfeited, and the same is true of any challenge to the effective-vindication doctrine itself that a sponsor wants preserved for a future petition. Beyond that, the recent decisions suggest the defense has shifted—standing and class certification are where exposure has actually narrowed.
Practical takeaways for plan sponsors and fiduciaries
- Do not reach for the obvious fixes. Injunctive-relief carve-outs failed in Parker and Williams. An express ERISA-remedies savings proviso failed in Fleming. General savings language has not rescued a clause.
- Treat the waiver and the severability language as one problem, not two. Deleting a bar on “representative” claims while leaving the fallback provision untouched can surrender arbitration of individual claims along with it—and a fallback drafted to look protective will be read literally. If it says representative claims go to court, they will.
- Document participant consent, not just plan consent. Pull the enrollment communications and acknowledgments before briefing. Notice buried in a long SPD will not do the work, and an arbitration agreement signed with the employer will not necessarily reach a claim that belongs to the plan.
- The threshold review is not a heavy lift. It draws on documents most sponsors already have—the plan document, the SPD, any wrap document, the participant communications, and the committee records behind the amendment. What those documents show, and what follows from it, is the part that repays counsel’s attention.