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The U.S. Supreme Court on Monday declined to review a Sixth Circuit ruling that blocked Tenneco Inc.’s attempt to force arbitration in a lawsuit accusing the company of mismanaging employee retirement plans under the Employee Retirement Income Security Act (ERISA).
Tenneco’s Arbitration Efforts Rejected
The lawsuit, led by current and former employees of Tenneco and its subsidiary Driv Automotive Inc., alleges that the companies packed their 401(k) plans with underperforming investment options, costing participants millions in retirement savings. Tenneco argued that a 2021 plan amendment requiring arbitration for all disputes, including fiduciary breach claims, barred participants from pursuing litigation.
However, the Sixth Circuit ruled in August 2023 that the arbitration provision violated the Federal Arbitration Act’s effective vindication doctrine. This principle allows courts to reject arbitration agreements that undermine statutory remedies—in this case, ERISA’s provision allowing participants to seek plan-wide relief.
Supreme Court Denies Certiorari
In its petition for certiorari, Tenneco asked the justices to address whether ERISA participants have an “unwaivable statutory right” to represent the plan as a whole and seek remedies on behalf of other participants’ accounts. Tenneco also sought clarification on the application of the effective vindication doctrine in ERISA cases, as the Supreme Court has not previously addressed the issue.
