Key Takeaways: The Supreme Court has twice declined to review ERISA arbitration cases, offering no signal that it plans to resolve the growing appellate divide. The Second and Sixth Circuits have struck down individual arbitration provisions, while a recent Central District of California decision, relying on Ninth Circuit precedent, upheld similar language. Courts applying the Effective Vindication Doctrine continue to interpret ERISA §502(a)(2) as protecting the right to seek plan-wide relief, limiting the enforceability of individual-only arbitration clauses. A pending Eleventh Circuit appeal may further test whether specifically tailored arbitration language can survive scrutiny under this doctrine. Plan sponsors and trustees considering mandatory arbitration provisions should consult ESOP counsel to assess risk and ensure the plan language aligns with the evolving case law in

On January 16, 2025, the Employee Benefits Security Administration (EBSA) at the Department of Labor (DOL) released drafts of long-awaited proposed regulations seeking to clarify the definition of “adequate consideration” as set forth in Section 3(18)(B) of ERISA and a proposed class exemption from certain prohibited transaction restrictions in connection with an employee stock ownership plan’s (ESOP) initial acquisition of privately held employer stock from a selling shareholder.   The ESOP community has sought clear guidance on what the term “adequate consideration” means ever since ERISA’s inception 50 years ago. Although EBSA first proposed “adequate consideration” regulations in 1988, the DOL never finalized these rules. Without such guidance, the ESOP community has expressed concerns that plan sponsors, selling shareholders and ERISA fiduciaries could be left