Arbitrability of Equitable Claims, Including ERISA Claims, to Be Decided by Court

Plaintiff Aramark Services, Inc. (Aramark) sponsors group health plans governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). It hired defendant Aetna Life Insurance Company (Aetna) to administer the plans. In 2023, Aramark sued Aetna for breach of fiduciary duty in connection with its administration of the plans, seeking injunctive relief as well as ERISA damages. The parties' agreement includes an arbitration clause that provides, in relevant part:

Any controversy or claim arising out of or relating to this Agreement or the breach, termination, or validity thereof, except for temporary, preliminary, or permanent injunctive relief, or any other form of equitable relief, shall be settled by binding arbitration . . . .

In February, Aetna moved to compel arbitration. In April, in Aramark Services, Inc. v. Aetna Life Insurance Company, the District Court for the Eastern District of Texas denied the motion.

Arbitration, as imagined by ChaptGPT

The language quoted above makes clear that equitable claims are not arbitrable. Aetna nonetheless argued that the question of arbitrability should be decided by the arbiter because the parties' arbitration agreement so provides. That would seem like a waste of time, given the clear exclusion of equitable claims in the arbitration clause. Fortunately, given the reigning formalist textualism of the era, the court did not need to reason its way to that conclusion. A handy Fifth Circuit precedent led it there. The law requires that the agreement evidence a clear and unmistakable intent to delegate issues of arbitrability to the arbiter. Here, the parties' agreement evidences no such intent as to equitable claims.

But wait, said Aetna, Aramark is also seeking money damages. Those claims should be arbitrable. Again, precedent comes to Aramark's rescue. The ERISA claims that Aramark has made seek money damages for a breach of a fiduciary duty. Such claims, SCOTUS has held, are equitable. This court finds them so, whether made under 29 U.S.C. § 1132(a)(2) or (3).