Ineffective Vindication: Ninth Circuit Sends ERISA Conflict to Court, Not Arbitration

A divided Ninth U.S. Circuit Court of Appeals recently affirmed the denial of an employer’s motion to compel arbitration in an Employee Retirement Income Security Act fiduciary-breach suit brought by a former employee.

Backing a lower court, the Ninth Circuit agreed with the plaintiff that she couldn’t effectively vindicate her retirement plan rights under the ERISA agreement in arbitration.

In Pover v. Capital Group Cos. Inc., No. 24-5298, the panel held that a defined-contribution retirement plan could not require individual arbitration while also barring the participant from bringing a representative claim on behalf of the plan.

Capital Group, a large private investment company based in Los Angeles, sponsors a defined-contribution plan for current and former employees, and the Plan contained an arbitration requirement and a waiver of class, collective, and representative actions. Former employee Cathy Pover claimed that Capital Group had breached its fiduciary duties by retaining several investment options despite their poor performance, allegedly because those funds generated substantial transaction fees for Capital Group.

Pover filed suit against Capital Group “in a representative capacity on behalf of the Plan . . ., seeking appropriate relief . . .  to protect the interests of the entire Plan,” and sought relief under ERISA.

Capital Group moved to compel arbitration, but Pover argued that the representative-action waiver was unenforceable under the effective-vindication doctrine, which permits arbitration agreements to change the forum for resolving federal statutory claims but didn’t  eliminate substantive statutory rights and remedies. The plan’s fallback clause provided that, if the representative-action waiver were found unenforceable, the representative claim would proceed in court.

The 2-1 panel held that the arbitration provision violated the effective-vindication doctrine, and that the waiver was not severable from the arbitration provision.

Writing for the majority, Circuit Judge Danielle J. Forrest explained that Pover was not seeking relief solely on her own behalf, but was acting in a representative capacity on behalf of the Plan and seeking plan-wide relief.

The majority relied on its year-old decision in Platt v. Sodexo S.A., No. 23-55737 (Aug. 4, 2025), which addressed a similar ERISA arbitration provision: “We recently joined several of our sister circuits in holding that ‘arbitration provisions preventing individuals from obtaining the plan-wide relief available under § 409(a) violate the effective-vindication doctrine.’”

The opinion concluded, “that the  Plan’s representative-action waiver prevents Pover from enforcing her substantive rights under ERISA because her breach-of-fiduciary-duty claims can only be brought in a representative capacity. Accordingly, the waiver is unenforceable under the effective-vindication doctrine.”

Circuit Judge Lawrence VanDyke dissented, disagreeing with the majority’s reading of “representative.” Relying on the Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 (2022), he argued that the term can describe different kinds of claims. In his view, because “representative” appeared alongside “class” and “collective,” Capital Group’s waiver was aimed at group-based claims, not at a participant acting on behalf of the plan. Therefore, Pover could still pursue the plan’s claim in individual arbitration, so the waiver did not eliminate any substantive ERISA remedy.

The dissent gives Capital Group a possible petition theme if it decides to seek certiorari with the U.S. Supreme Court. The company could argue that the majority’s reading of “representative” conflicts with Viking River’s distinction between the two forms of representative litigation. Capital Group has until Aug. 13 to seek panel or en banc rehearing—no filing had been made as of this posting. Absent rehearing, Capital Group’s deadline to petition the Supreme Court for certiorari is Oct. 28.

Still, the majority treated Platt as controlling, and Platt placed the Ninth Circuit in line with several other circuits that have rejected arbitration provisions preventing ERISA participants from obtaining plan-wide relief.

Absent a clear circuit split that would send the case to the nation’s top Court, Pover’s more immediate significance is likely to be practical in terms of plan administration under the Ninth Circuit’s jurisdiction. Plan sponsors and counsel will need to reconsider how arbitration provisions address representative ERISA claims and plan-wide remedies.

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The author, a 2026 CPR Summer Intern, is in her second year at the Northeastern University School of Law in Boston.

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