Washington, DC – The ERISA Industry Committee (ERIC) has filed an amicus brief with the U.S. Court of Appeals for the Second Circuit in Jander v. Retirement Plans Committee of IBM, in support of IBM after the U.S. Supreme Court remanded the case back to the Second Circuit. The brief was filed jointly with the Chamber of Commerce of the United States of America, the American Benefits Council, and SIFMA.
The brief builds upon a previously filed amicus brief with the Supreme Court that claimed the Second Circuit allowed a meritless breach-of-fiduciary-duty claim against an employee stock ownership plan (ESOP) fiduciary to proceed based on generic allegations.
The new brief argues that the plaintiffs’ complaint fails to state a plausible claim for breach of the duty of prudence. Specifically, ERISA provides that fiduciaries may wear two hats and that ERISA should not be interpreted to create its own system of securities law. The brief also states that permitting meritless stock-drop cases to proceed to discovery would undermine the viability of ESOPs, which Congress has sought to protect.
“The Second Circuit must protect employers’ ability to offer company stock to employees as an investment,” said Aliya Robinson, Senior Vice President of Retirement and Compensation Policy, ERIC. “Employers want to provide their employees with every opportunity to save for retirement; stock options are one of the most important opportunities to do that.”
Click here to read the latest filing.