Many ERISA plans have venue provisions.  The Secretary of Labor has argued in litigation, however, that these provisions are “incompatible with ERISA.”

Are venue selection provisions in ERISA plans enforceable?  YES.

Here’s the case of Smith v. Aegon Companies Pension Plan, __F.3d __ (2014 WL 5125633) (6th Cir. October 14, 2014)(PDF).

FACTS: Smith retired in 2000. In 2007, the Plan was amended to add a venue provision which stated that a “participant or Beneficiary shall only bring an action in connection with the Plan in Federal District Court in Cedar Rapids, Iowa.” In 2011 the Plan informed Smith he had been overpaid $153,283 in ERISA-governed pension benefits. Smith disagreed and eventually brought suit in the federal court in the Western District of Kentucky.  The Plan moved to dismiss, based on the venue provision.

SIXTH CIRCUIT HELD (Split decision): Venue selection clause in ERISA plan was enforceable.

  1. The Secretary of Labor submitted an amicus brief contending venue selection clauses are “incompatible with ERISA.” The Secretary of Labor’s interpretation is “NOT entitled to deference[.]” Op. at 4 (Emph. added).
  2. ’An [agency] interpretation contained in a brief—like interpretations contained in opinion letters, policy statements, agency manuals and enforcement guidelines—lacks the force of law and is therefore not entitled to Chevron deference.’” Op. at 5.
  3. The position in the Secretary of Labor’s amicus brief is “not entitled to Skidmore deference.”  The Secretary “is no more expert than this Court is in determining whether a statute proscribes venue selection.”  Op. at 7.
  4. “The Secretary of Labor has taken no position, even an informal one, against the enforceability of venue or forum selection…for thirty-nine years….The Secretary’s new interpretation is not consistent with prior acquiescence[.]”  Op. at 7.
  5. “A majority of courts…have upheld the validity of venue selection clauses in ERISA-governed plans.”  Op. at 10.