In addition to reporting on active ERISA litigation, the authors of this blog take a great interest in potential future litigation. One such area is the validity of class action waivers (as part of arbitration clauses) in ERISA plans.
On Friday, the Securities Law Prof Blog*** by University of Cincinnati College of Law professor Barbara Black reported on Schwab’s decision to withdraw the class action waiver clause from their brokerage account agreements in light of the fact that the issue is now on appeal before the FINRA appellate body. Click here to read the blog post. For a full copy of Schwab’s statement, click here. For history’s sake, here is Schwab’s statement in part:
Effective immediately, Schwab is modifying its account agreements to eliminate the existing class action lawsuit waiver for disputes related to events occurring on or after May 15, 2013 and for the foreseeable future.
While the company believes that dispute resolution is best handled via FINRA arbitration, we have chosen to voluntarily remove the waiver going forward until the issue is resolved by the appropriate regulatory and/or court decisions. Given that the process will likely take considerable time to resolve, and may leave clients with a degree of uncertainty about their dispute resolution options in the meantime, we have elected to remove that uncertainty until the legal and regulatory process is completed.