Eleventh Circuit Reaffirms Strict ERISA Exhaustion Requirement for Fiduciary-Breach Claims

In Bolton v. Inland Fresh Seafood Corp. of Am., Inc., No. 24-10084, —F.4th—-, 2025 WL 2924493 (11th Cir. Oct. 15, 2025), the Eleventh Circuit affirmed dismissal of a class action alleging fiduciary breaches in connection with an ESOP stock transaction. The panel—Judge Moreno writing, joined by Judges Jordan and Jill Pryor—held that participants must exhaust administrative remedies before pursuing statutory or fiduciary-breach claims in federal court, even though ERISA contains no such textual requirement.

The plaintiffs, former employees and participants in Inland Fresh’s Employee Stock Ownership Plan (“ESOP”), alleged that company directors and officers caused the plan to overpay by tens of millions for company stock during the ESOP’s formation in 2016. They claimed inflated valuations and misrepresented sales and inventory figures led to a purchase price far exceeding fair market value, breaching fiduciary duties under ERISA §§ 502(a)(2) and (a)(3). Rather than invoke the plan’s internal claims procedure, plaintiffs filed directly in federal court. The district court dismissed for failure to exhaust administrative remedies and declined to stay the case to permit exhaustion.

The Eleventh Circuit affirmed, finding no valid excuse for bypassing the plan’s administrative process. Reiterating its precedent from Mason v. Continental Group, Inc., 763 F.2d 1219 (11th Cir. 1985), the court emphasized that exhaustion applies “across the spectrum of ERISA claims”—including those alleging statutory violations or fiduciary breaches. While acknowledging that most other circuits do not require exhaustion for statutory ERISA claims, the Eleventh Circuit reaffirmed its unique position, holding itself bound by Mason until abrogated by the Supreme Court or by the court en banc.

The panel rejected plaintiffs’ reliance on Jones v. Bock, 549 U.S. 199 (2007), which addressed exhaustion under the Prison Litigation Reform Act. That decision, the court explained, was “neither clearly on point nor clearly contrary” to Eleventh Circuit precedent.

Even assuming exhaustion is an affirmative defense, the court held that dismissal was proper because plaintiffs effectively admitted they had not pursued the plan’s internal process. The district court acted within its discretion in dismissing the complaint on the pleadings.

The plaintiffs’ three proposed exceptions failed:

• Inadequate forum: The plan’s administrative committee possessed authority to interpret the plan and address fiduciary-breach claims.
• Plan language: Although the plan stated that participants “may” submit a claim, its arbitration clause expressly required exhaustion before asserting fiduciary-duty claims.
• Futility: Alleged conflicts of interest by committee members did not render exhaustion futile as a matter of law; speculation about bias or procedural limits was insufficient.

Because plaintiffs embedded their stay request in an opposition brief rather than filing a separate motion, and because ERISA’s “fraud or concealment” exception likely preserved their ability to refile after exhaustion, the district court acted within its discretion in denying a stay.

Although the dismissal was affirmed, the court remanded for the district court to clarify whether it was “with or without prejudice.” The Eleventh Circuit suggested that, because failure to exhaust is non-jurisdictional and not an adjudication on the merits, dismissal without prejudice is typically appropriate.

Lastly, Judge Jordan, joined by Judge Pryor, concurred fully but urged the full court to revisit Mason. He noted that ERISA contains no exhaustion requirement and that policy rationales cannot justify adding one judicially. Seven other circuits—the Third, Fourth, Fifth, Sixth, Ninth, Tenth, and D.C. Circuits—do not require exhaustion for fiduciary-breach or statutory claims. He argued that the Eleventh Circuit “stands alone” in its mandatory rule and that the issue is increasingly consequential given the surge in post-Hughes v. Northwestern University fiduciary-breach litigation.