Ninth Circuit Affirms ERISA Participant’s Right to Sue Despite Unilateral Arbitration Clause Added by Employer

In Platt v. Sodexo, S.A., No. 23-55737, —F.4th—, 2025 WL 2203415 (9th Cir. Aug. 4, 2025), the Ninth Circuit addressed whether an employer can unilaterally impose arbitration provisions on ERISA-governed plan participants through plan amendments. The court held that while an employer may amend the plan itself, it cannot bind participants to arbitrate ERISA claims without their consent. The decision reaffirms key participant protections under ERISA and underscores limits on employer-driven arbitration mandates.

Robert Platt, an employee of Sodexo, Inc., brought a class action against Sodexo alleging that its imposition of a monthly tobacco surcharge on employee health insurance premiums violated ERISA. He asserted three claims: (1) a claim under ERISA § 502(a)(1)(B) to enforce the terms of the plan, (2) a claim under § 502(a)(3) for equitable relief based on the surcharge’s alleged noncompliance with wellness program regulations, and (3) a breach of fiduciary duty claim under § 502(a)(2) on behalf of the plan.

Sodexo sought to compel arbitration pursuant to a clause it had added to the plan documents in 2021. That clause required arbitration of ERISA claims—excluding claims under § 502(a)(1)(B)—and prohibited class or representative actions. Notably, the clause was added unilaterally by Sodexo after Platt had already enrolled in the plan.

The district court denied Sodexo’s motion to compel arbitration, holding that Platt had not consented to the arbitration clause, and Sodexo appealed.

The Ninth Circuit began by emphasizing that arbitration under the Federal Arbitration Act (FAA) requires mutual consent. While employers may amend ERISA plans, that power does not extend to creating binding arbitration agreements with plan participants without their express or implied consent.

Turning to Platt’s claims, the panel first identified who the “relevant consenting party” was for each ERISA claim. For the § 502(a)(1)(B) and § 502(a)(3) claims—asserted to enforce participant rights or seek participant relief—Platt himself was the relevant party. For the § 502(a)(2) fiduciary breach claim, however, the plan was the real party in interest, and its consent could potentially bind the claim to arbitration.

The court agreed with the district court that Platt did not consent to arbitration. Sodexo relied on two forms of notice: a 2021 Summary of Material Modifications (SMM), and a 2022 email with a link to a new 170-page Summary Plan Description (SPD). The Ninth Circuit assumed Platt never received the 2021 SMM and found the 2022 SPD email insufficient to place Platt on notice of the arbitration provision buried on page 153.

Importantly, the court found no evidence that Sodexo ever indicated continued participation in the plan would constitute acceptance of the arbitration clause—an omission fatal to forming mutual assent under California contract law. Even if Platt had received the SMM, it too failed to inform participants that arbitration would be a condition of future participation. As a result, there was no enforceable arbitration agreement between Platt and Sodexo for claims under § 502(a)(1)(B) and § 502(a)(3).

The court reached a different conclusion for Platt’s breach of fiduciary duty claim under § 502(a)(2), which seeks relief on behalf of the plan. The court found that the plan itself was the relevant consenting party and had, through its terms, delegated broad authority to Sodexo to amend its provisions—including the arbitration clause. Thus, Sodexo’s amendment was sufficient to bind the plan.

However, the enforceability of arbitration for this claim did not end there. The court held that the arbitration provision’s prohibition on representative actions violated the effective vindication doctrine, which prevents enforcement of arbitration agreements that prospectively waive statutory remedies. Because § 502(a)(2) permits participants to bring claims on behalf of the plan to recover losses under ERISA § 409(a), the waiver deprived Platt of the ability to assert a plan-wide fiduciary breach. That made it unenforceable. This holding aligns with decisions from the Second, Third, Sixth, Seventh, and Tenth Circuits, which have likewise invalidated arbitration provisions that restrict participants from obtaining statutory relief available under § 502(a)(2) and § 409(a).

Platt had also challenged two additional provisions in the arbitration agreement: a shortened statute of limitations and a bar on attorney’s fees. The Ninth Circuit declined to address these arguments because the district court had not yet ruled on them. The court also noted that a severability clause in the plan could salvage the arbitration provision if the invalid portions could be severed.

Accordingly, the Ninth Circuit remanded the case to the district court to assess the unconscionability of these additional provisions and determine whether any invalid clauses could be severed under federal common law. In sum, the Ninth Circuit affirmed the district court’s denial of Sodexo’s motion to compel arbitration with respect to Platt’s § 502(a)(1)(B) and § 502(a)(3) claims, holding that Platt never consented to arbitration. It reversed in part as to the § 502(a)(2) fiduciary breach claim, finding that the plan’s consent could bind that claim, but held that the representative action waiver was unenforceable. The court remanded for further proceedings on remaining unconscionability defenses and severability.