Eleventh Circuit Affirms Vacatur of Arbitration Award After Arbitrator Grants Relief on Unsubmitted ERISA Claim

In Nalco Co. LLC v. Bonday, No. 22-13546, —F.4th—-, 2025 WL 1903042 (11th Cir. July 10, 2025), the Eleventh Circuit affirmed a district court’s decision to vacate an arbitration award in favor of a former employee, Laurence Bonday, holding that the arbitrator exceeded her authority under the Federal Arbitration Act (FAA) by granting relief on a claim Bonday never submitted for arbitration. The case underscores the limits of arbitral authority and offers important guidance for ERISA plan sponsors navigating disputes governed by arbitration clauses.

Background: Dispute Over Severance Denial

Laurence Bonday worked for Nalco Company LLC from 2005 until 2019, when his position was eliminated and he was offered a consulting role instead. Believing the demotion entitled him to severance under Nalco’s ERISA-governed severance plan, Bonday requested the benefit, which was denied through the plan’s internal appeal process. Unsuccessful in obtaining severance, Bonday resigned and, six months later, filed an arbitration demand with the American Arbitration Association (AAA). His sole claim sought enforcement of the severance plan based on his demotion.

Nalco’s Objection and District Court Action

Nalco argued that the dispute was not arbitrable under the terms of the parties’ arbitration agreement, which excluded claims concerning employee benefit plans with an appeal process. Nalco petitioned the district court for a declaratory judgment on the arbitrability question and requested a stay of arbitration. Despite the pending court action, the arbitrator proceeded and interpreted Bonday’s demand to possibly include an ERISA § 510 discrimination claim—despite that Bonday had not raised such a claim or requested related relief.

Following a hearing, the arbitrator denied the severance claim as non-arbitrable but awarded Bonday over $129,000 based on the ERISA discrimination theory the arbitrator had effectively raised sua sponte. Nalco moved to vacate the award, asserting that the arbitrator had exceeded her powers by ruling on arbitrability and granting relief on a claim never presented.

Eleventh Circuit’s Ruling: Arbitrator Exceeded Her Authority

The Eleventh Circuit affirmed on narrow grounds, agreeing with the district court that the arbitrator exceeded her powers under 9 U.S.C. § 10(a)(4) by granting relief on an unsubmitted ERISA claim. The court emphasized that arbitrators are confined to resolving disputes that the parties have expressly agreed to submit. Here, Bonday’s demand mentioned neither ERISA nor discrimination; it merely alleged that Nalco failed to follow the severance plan and sought only severance pay. Accordingly, the ERISA claim had not been submitted for arbitration, and the arbitrator’s decision to award relief on that basis fell outside the scope of her authority.

The court rejected arguments that Bonday’s pro se status entitled his demand to a liberal construction that would encompass an ERISA claim, noting that even pro se litigants cannot rely on courts or arbitrators to “rewrite an otherwise deficient pleading.” Nor was it sufficient that Bonday may have acquiesced to the ERISA claim later in the arbitration proceedings—there was no record of such submission.

Dissent: Arbitrator Acted Within Broad Authority

In a lengthy and forceful dissent, Judge Tjoflat criticized the majority and district court for failing to honor the deferential standard of review mandated by the Supreme Court’s decision in Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013). He argued that by adopting the AAA Rules, which grant arbitrators authority to rule on jurisdiction and “specification of undisclosed claims,” the parties had delegated broad interpretive power to the arbitrator. In Judge Tjoflat’s view, the arbitrator did not exceed her powers but instead reasonably construed the demand in line with her role under the AAA Rules.