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United States Court of Appeals for the Sixth Circuit
December 9, 2021, Argued; April 27, 2022, Decided
File Name: 22a0089p.06
[*627] [***2] BOGGS, Circuit Judge. In deciding whether a case belongs in arbitration, a court typically asks whether the party bringing the claim has agreed to arbitrate. But sometimes it is difficult to discern exactly who is bringing what claim. Here, individual would-be plaintiffs agreed to arbitrate certain claims, but the claim they seek to adjudicate is brought through an unusual procedure on behalf of an abstract entity.
Plaintiffs-Appellees Raymond Hawkins and Robin Lung alleged that their former employer, Appellant Cintas Corporation, breached the fiduciary [**2] duties it owed to the company's retirement plan. They brought a putative class action pursuant to § 502(a)(2) of the Employment Retirement Income Security Act of 1974 ("ERISA"). But the Plaintiffs had each signed employment agreements that contained arbitration provisions. Cintas moved to compel arbitration, arguing that the Plaintiffs were bringing individual claims covered by those provisions.
This case presents issues of first impression for this court. The weight of authority and the nature of § 502(a)(2) claims suggest that these claims belong to the plan, not to individual plaintiffs. Therefore, the arbitration provisions in these individual employment agreements—which only establish the Plaintiffs' consent to arbitration, not the plan's—do not mandate that these claims be arbitrated. Further, the actions of Cintas and the other defendants do not support a conclusion that the plan has consented to arbitration. We therefore affirm the district court's denial of the motion to compel arbitration.
Appellant Cintas is a national uniform and business-supply company. As with many companies, Cintas has established a retirement plan—the Cintas Partners' Plan (the "Plan")—for its employees. The Plan is a "defined contribution" plan, meaning that the Plan's [**3] sponsor selects a "menu" of investment options in which each participant can invest. Cintas is the Plan's [***3] sponsor. Each participant in the Plan maintains an individual account, the value of which is based on the amount contributed, market performance, and associated fees. 1
[*628] ] Under § 402(a)(1) of ERISA, all plans must have one or more fiduciaries responsible for managing and administrating the plan. 2 29 U.S.C. § 1102(a)(1). ERISA imposes several duties on these fiduciaries. Two are at issue in this appeal: (1) the duty of loyalty—managing the plan for the best interests of its participants and beneficiaries—and (2) the duty of prudence—managing the plan with the care and skill of a prudent person acting under like circumstances.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
32 F.4th 625 *; 2022 U.S. App. LEXIS 11377 **; 2022 FED App. 0089P (6th Cir.) ***
RAYMOND HAWKINS and ROBIN LUNG, individually and on behalf of all others similarly situated, Plaintiffs-Appellees, v. CINTAS CORPORATION; INVESTMENT POLICY COMMITTEE; SCOTT D. FARMER, BOARD OF DIRECTORS OF CINTAS CORPORATION, Defendants-Appellants.
Subsequent History: US Supreme Court certiorari denied by Cintas Corp. v. Hawkins, 2023 U.S. LEXIS 94 (U.S., Jan. 9, 2023)
Prior History: [**1] Appeal from the United States District Court for the Southern District of Ohio at Cincinnati. No. 1:19-cv-01062—Timothy S. Black, District Judge.
Hawkins v. Cintas Corps., 2021 U.S. Dist. LEXIS 14766, 2021 WL 274341 (S.D. Ohio, Jan. 27, 2021)
arbitration, arbitration provision, belong, rights, employment agreement, fiduciary, subject to arbitration, employees, plans, fiduciary duty, consented, arbitration agreement, defined-contribution, benefits, injuries, binding, suits, agreed to arbitrate, retirement, breached, entities, sponsor, breach of fiduciary duty, putative class action, compel arbitration, individual claim, district court, qui tam, documents, disputes
Tax Law, Retirement Plans, Defined Contribution Plans, Employee Stock Ownership Plans, Business & Corporate Compliance, ERISA, Fiduciaries, Named Fiduciary Appointment & Obligations, Arbitration, Federal Arbitration Act, Arbitration Agreements, Evidence, Burdens of Proof, Allocation, Orders to Compel Arbitration, Pensions & Benefits Law, Civil Litigation, Causes of Action, Breach of Fiduciary Duty, Civil Procedure, Capacity of Parties, Representative Capacity, Representatives, Failures to Respond, Governments, Courts, Common Law, Alternative Dispute Resolution, Arbitrability, Contracts Law, Third Parties, Delegation of Performance, Contracts Law, Contract Conditions & Provisions, Arbitration Clauses