The justices declined to take up the case, leaving the Sixth Circuit’s decision intact. This aligns with recent rulings from the Second, Seventh, and Tenth circuits rejecting arbitration provisions that conflict with ERISA’s protections.
Details of the Lawsuit
The lawsuit, filed in May 2022 and transferred to Michigan federal court in 2023, claims Tenneco and its subsidiaries failed to remove underperforming funds from their 401(k) investment options, breaching their fiduciary duties. Plaintiffs Tanika Parker and Andrew Farrier argue that the mismanagement caused substantial financial harm to plan participants.
Tenneco’s arbitration provision, introduced in 2021, attempted to limit participants’ ability to sue on behalf of the plan or lead class actions, but courts have consistently held that such provisions contravene ERISA’s statutory framework.
Broader Implications
The Supreme Court’s refusal to intervene underscores the judiciary’s reluctance to limit ERISA participants’ rights to seek broad remedies in court. This decision may further solidify circuit court precedents rejecting arbitration clauses that attempt to curtail statutory protections under ERISA.
