The panel affirmed in part and reversed in part the district court’s judgment against Robert Platt, and remanded, in a case in which Platt sued his employer, Sodexo, Inc. and Sodexo, S.A. (collectively, “Sodexo”), claiming that a monthly tobacco surcharge on his employee health insurance premiums violated the Employee Retirement Income Security Act (ERISA).

Platt brings claims on behalf of himself and other plan participants to recover losses under ERISA § 502(a)(1)(B) and § 502(a)(3), and a breach of fiduciary duty claim on behalf of the employer-sponsored health insurance plan (“the Plan”) for losses under ERISA § 502(a)(2). Sodexo seeks to compel arbitration pursuant to an arbitration provision that it unilaterally inserted into the Plan after Platt joined the Plan. The district court denied Sodexo’s motion to compel arbitration and held that there was no enforceable arbitration agreement because Sodexo impermissibly unilaterally modified the Plan to add the arbitration provision, and Platt never agreed to arbitrate his claims.

The panel agreed that an employer does not create a valid arbitration agreement by unilaterally modifying an ERISA-governed plan to add an arbitration provision. Instead, the employer must obtain consent from the relevant party to form a valid arbitration agreement.

The panel held that Platt is the relevant consenting party for claims under ERISA § 502(a)(1)(B) and § 502(a)(3) in which he seeks to recover losses by plan participants. Platt did not consent to arbitration because he did not receive sufficient notice of the addition of the arbitration provision or that his continued participation in the Plan would constitute consent to arbitration.

The panel held that the Plan is the relevant consenting party for the breach of fiduciary duty claim under ERISA § 502(a)(2) in which Platt seeks redress for losses by the Plan. The Plan consented to arbitration because its terms cede broad authority to Sodexo to amend the Plan’s terms.

Platt argued in the alternative that even if the Plan consented to the arbitration provision, the provision is still unenforceable because a prohibition on representative actions, which are statutorily guaranteed under §§ 502(a)(2) and 409(a), violates the effective vindication doctrine. The panel held that the provision prohibiting representative actions is invalid under the effective vindication doctrine.

Platt also argued that certain clauses in the arbitration agreement are unconscionable. The panel held that ERISA does not preempt Platt’s unconscionability defenses, which are rooted in federal common law.

The panel thus affirmed the district court’s denial of Sodexo’s motion to compel arbitration as to Platt’s claims under ERISA § 502(a)(1)(B) and § 502(a)(3). The panel reversed in part the district court’s denial of Sodexo’s motion to compel arbitration as to Platt’s breach of fiduciary duty claim under ERISA § 502(a)(2), and remanded with instructions for the district court to consider, in the first instance, Platt’s unconscionability defenses, and the severability of both the representative action waiver and any

of the arbitration clauses that it may find unconscionable.

https://cdn.ca9.uscourts.gov/datastore/opinions/2025/08/04/23-55737.pdf