On Monday, July 15, 2019, the United States District Court for the District of Columbia dismissed a proposed class action lawsuit against The George Washington University. The suit was filed under the Employee Retirement Income Security Act. The Court held that Plaintiff Melissa Stanley lacked standing to sue because she explicitly gave up her right to sue as part of a 2016 settlement with the University.
Stanley filed the instant lawsuit against the University in April 2018, alleging that the University, its board of trustees, and its plan administration committee breached their fiduciary duty by burdening Stanley’s retirement plan with excessive record-keeping fees, offering too many investment options, and refusing to remove certain poorly performing options from her retirement plan. In response to the University’s argument that she lacked standing to sue based on the terms of her prior settlement agreement, Stanley argued that the terms of the agreement allowed her to bring subsequent benefits-related lawsuits against the school.
The Court disagreed, finding that while the settlement allowed Stanley to sue theUniversity regarding matters related to her own retirement benefits, the settlement precluded her from accusing the University of mismanaging its retirement plan in general.
While Stanley may appeal the Court’s ruling, this ruling is beneficial for businesses because it precludes an employee from bringing a subsequent class action lawsuit against an employer under ERISA after previously entering into a release and settlement agreement. It is important, therefore, for businesses to protect themselves when settling with an employee by ensuring that, by signing a release and settlement agreement, the employee waive her right to bring subsequent lawsuits against the employer regarding the management of its retirement plan.