Stueve Siegel Hanson Prevails at Ninth Circuit in Precedential Opinion Largely Rejecting Attempt to Unilaterally Impose Arbitration of ERISA Claims
The U.S. Court of Appeals for the Ninth Circuit has largely upheld a lower court decision rejecting Sodexo’s attempt to force arbitration in a class and representative action lawsuit over the legality of the company’s tobacco surcharge.
Stueve Siegel Hanson LLP represents Plaintiff Platt and the proposed class of workers in Platt v. Sodexo, along with co-counsel McClelland Law Firm, P.C. and Hartley LLP. The lawsuit challenges Sodexo’s practice of imposing a tobacco surcharge to medical plan participants for tobacco use without following ERISA’s requirements for a lawful outcome-based wellness plan. The case is one of several that Stueve Siegel Hanson is leading to preclude discrimination based on health status under ERISA and to ensure compliance with wellness plan requirements.
The issue at the Ninth Circuit was where and how this case would proceed. Mr. Platt sought to press his claims in federal court on behalf of himself, other similarly situated workers, and the plan itself. Sodexo wanted the case in individual arbitration—where it could limit its liability to only the fees charged to Mr. Platt himself.
In a published opinion issued August 4, 2025, the Ninth Circuit ruled that, for claims that belong to the employees, employers cannot unilaterally change ERISA plans to require arbitration without securing the employee’s consent. The panel affirmed that plaintiff Robert Platt had not agreed to arbitrate his claims and that his consent is required under the Federal Arbitration Act (FAA).
The Ninth Circuit also found that the arbitration provision’s bar on representative actions violated the effective vindication doctrine because it was tantamount to a waiver of the participant’s statutory right to bring a breach of fiduciary duty claim in a representative capacity on behalf of the plan.
Key takeaways from the ruling include:
- ERISA Does Not Preempt the FAA’s Contract Formation Requirements: The Court held that Sodexo could not impose arbitration without following normal contract formation principles, including mutual consent to arbitrate. In so finding, it concluded ERISA does not alter the FAA’s requirement that arbitration agreements must be knowingly agreed to by the affected party. In addition, it found that common law defenses to contract formation (like unconscionability) are also not preempted.
- Waivers of Representative Actions Invalid: The Court held that Sodexo’s attempt to bar representative actions (like ERISA breach of fiduciary duty claims brought on behalf of the plan) through its arbitration provision limiting suits to an employee’s individual capacity was invalid, because it took away rights granted by Congress. In so doing, the Court joined the Second, Third, Sixth, Seventh, and Tenth Circuits in finding that bars on representative actions waive ERISA’s statutory right to proceed on behalf of the plan for breach of fiduciary duty claims.
Stueve Siegel Hanson partner Alex Ricke argued the case at the Ninth Circuit with assistance from firm lawyers Caleb Wagner and Yasmin Zainulbhai on the briefing.
In the article “9th Circuit Rejects Most of Sodexo’s ERISA Arbitration Push” covering the decision, Law360 quoted firm partner Alex Ricke as saying: “We appreciate the court's opinion and look forward to pursuing Mr. Platt's claims in the district court.“
Read the full article here (subscription may be required). The decision was also reported on in the article “Sodexo, Live Nation Suits Get Nuanced 9th Cir. Arbitration Take“ by Bloomberg Law and “Compelling ERISA Arbitration No Sure Thing, 9th Circ. Shows“ by Law360.
The case is Robert Platt v. Sodexo S.A. et al., No. 23-55737, in the U.S. Court of Appeals for the Ninth Circuit. Click here for more information about about ongoing investigations into unlawful wellness program surcharges.
