District Court Denies Motion to Compel Arbitration Over Breach of Fiduciary Duties Claims

Despite the strong federal policy in favor of arbitration, the U.S. District Court for the Southern District of Ohio recently denied a motion to compel arbitration concerning an alleged injury to a defined contribution retirement plan and its participants. In this case, two plaintiffs brought an action pursuant to § 409 and § 502(a)(2) of the Employee Retirement Income Security Act of 1974 (“ERISA”) individually and on behalf of other similarly situated plan participants against Cintas Corporation for breaching its fiduciary duties of loyalty and prudence by mismanaging and failing to investigate and select better cost options for the plan. In response to this lawsuit, Cintas filed a motion to compel arbitration based on the employment agreements signed by the two plaintiffs.

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