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.
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Photo of Mike Reilly Mike Reilly

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment…

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment advice, and has represented clients in more than 75 jury trials, arbitrations, bench trials and claims before the EEOC and Washington State Human Rights Commission.

Small and large employers retain Mike for his strategic advice and decades of experience in employment issues and litigation, business decisions and litigation avoidance. Mike provides advice in claims involving discrimination, retaliation, wrongful discharge, disability accommodation, ERISA and non-ERISA employee benefit claims, and wage/hour claims. He served as lead counsel in an employee raiding/trade secret case as reported in the Wall Street Journal, and defends employers in class action claims.

Mike’s remarks on employment issues have been quoted in NewsweekCorporate Legal TimesSeattle TimesEmployee Relations Law JournalPuget Sound Business JournalCFO.com, and other professional journals and management publications. Chambers USA’s Guide to America’s Leading Lawyers for Businessrates Mike in the top ranking (band one) for his work in labor and employment law, and has described him as “one of Seattle’s top-rate attorneys” who is “truly phenomenal [with] superb legal instincts” and “an amazingly assertive litigator.” His clients include Nordstrom, Seattle Seahawks, Home Depot, KeyBank, Starbucks, Fred Hutchinson Cancer Research Center, Red Robin and Seattle Chamber of Commerce, among others.