Court Finds Forum Selection Clause Unenforceable in ERISA Suit

October 2, 2016

ERISA says that an action “may be brought in the district where the plan is administered, where the breach took place or where a defendant resides or may be found.” The Northern District of Illinois recently focused on the word “may” in determining whether a forum selection clause was enforceable for an ERISA claim. A forum selection clause is an agreement between the parties that they will litigate any claims in a specific court. Due to the fact that “may” is permissive, the court found that the drafters intended for a plaintiff to select the most suitable location for himself or herself. This decision is in line with long standing ERISA public policy of providing plaintiffs easy access to courts. Consequently, the court found that the forum selection clause was unenforceable. Plan sponsors can continue to keep forum selection clauses in their plan documents. Another court may interpret ERISA’s language differently and uphold a forum selection clause, however, be aware that it also may be unenforceable and the plan will have to litigate in the court the plaintiff has chosen.

 

Harris v. BP Corp. North American Inc., No. 15-10299 (N.D. Ill. July 8, 2016)

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