In a suit filed under the Employee Retirement Income Security Act (ERISA), the Tenth Circuit recently affirmed a district court’s reliance on the relatively obscure “effective vindication exception,” first announced a decade ago by the U.S. Supreme Court, as the basis to refuse to enforce an arbitration provision in a defined contribution retirement plan. Harrison v. Envision Mgmt. Holding, Inc., — F.4th —, 2023 U.S. App. LEXIS 3144 (10th Cir. Feb. 9, 2023).

The Underlying ERISA Claims

Defendant Envision Management Holding, Inc. (Envision) and a related entity collectively employ about 1,000 individuals. Id. at 3-4. Envision’s founders created the Envision Employee Stock Ownership Plan (ESOP or Plan) at issue, which is an ERISA-protected defined contribution plan under which the employer makes contributions on behalf of the employee-participants and the contributions are invested in the employer’s stock. Id. at *4.