Raymond Hawkins v. Cintas Corp. ( 2022 )

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 22a0089p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
┐
RAYMOND HAWKINS and ROBIN LUNG, individually
│
and on behalf of all others similarly situated,
│
Plaintiffs-Appellees, > No. 21-3156
│
│
v. │
│
CINTAS CORPORATION; INVESTMENT POLICY │
COMMITTEE; SCOTT D. FARMER, BOARD OF DIRECTORS │
OF CINTAS CORPORATION, │
Defendants-Appellants. │
┘
Appeal from the United States District Court for the Southern District of Ohio at Cincinnati.
No. 1:19-cv-01062—Timothy S. Black, District Judge.
Argued: December 9, 2021
Decided and Filed: April 27, 2022
Before: BOGGS, GIBBONS, and NALBANDIAN, Circuit Judges.
_________________
COUNSEL
ARGUED: Robert N. Hochman, SIDLEY AUSTIN LLP, Chicago, Illinois, for Appellants.
Mark K. Gyandoh, CAPOZZI ADLER, P.C., Harrisburg, Pennsylvania, for Appellees. ON
BRIEF: Robert N. Hochman, Mark B. Blocker, Chris K. Meyer, Caroline A. Wong, M.
Caroline Wood, SIDLEY AUSTIN LLP, Chicago, Illinois, for Appellants. Mark K. Gyandoh,
Donald R. Reavey, Gabrielle Kelerchian, CAPOZZI ADLER, P.C., Harrisburg, Pennsylvania,
for Appellees.
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 2
_________________
OPINION
_________________
BOGGS, Circuit Judge. In deciding whether a case belongs in arbitration, a court
typically asks whether the party bringing the claim has agreed to arbitrate. But sometimes it is
difficult to discern exactly who is bringing what claim. Here, individual would-be plaintiffs
agreed to arbitrate certain claims, but the claim they seek to adjudicate is brought through an
unusual procedure on behalf of an abstract entity.
Plaintiffs-Appellees Raymond Hawkins and Robin Lung alleged that their former
employer, Appellant Cintas Corporation, breached the fiduciary duties it owed to the company’s
retirement plan. They brought a putative class action pursuant to § 502(a)(2) of the Employment
Retirement Income Security Act of 1974 (“ERISA”). But the Plaintiffs had each signed
employment agreements that contained arbitration provisions. Cintas moved to compel
arbitration, arguing that the Plaintiffs were bringing individual claims covered by those
provisions.
This case presents issues of first impression for this court. The weight of authority and
the nature of § 502(a)(2) claims suggest that these claims belong to the plan, not to individual
plaintiffs. Therefore, the arbitration provisions in these individual employment agreements—
which only establish the Plaintiffs’ consent to arbitration, not the plan’s—do not mandate that
these claims be arbitrated. Further, the actions of Cintas and the other defendants do not support
a conclusion that the plan has consented to arbitration. We therefore affirm the district court’s
denial of the motion to compel arbitration.
I. BACKGROUND
Appellant Cintas is a national uniform and business-supply company. As with many
companies, Cintas has established a retirement plan—the Cintas Partners’ Plan (the “Plan”)—for
its employees. The Plan is a “defined contribution” plan, meaning that the Plan’s sponsor selects
a “menu” of investment options in which each participant can invest. Cintas is the Plan’s
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 3
sponsor. Each participant in the Plan maintains an individual account, the value of which is
based on the amount contributed, market performance, and associated fees.1
Under § 402(a)(1) of ERISA, all plans must have one or more fiduciaries responsible for
managing and administrating the plan.2 29 U.S.C. § 1102(a)(1). ERISA imposes several duties
on these fiduciaries. Two are at issue in this appeal: (1) the duty of loyalty—managing the plan
for the best interests of its participants and beneficiaries—and (2) the duty of prudence—
managing the plan with the care and skill of a prudent person acting under like circumstances.
Plaintiffs Raymond Hawkins and Robin Lung, who were Cintas employees participating
in the Plan, contend that Cintas breached both duties. First, they argue that Cintas offered
participants the ability to invest only in actively managed funds, rather than more cost-effective
passively managed funds. Second, they claim that Cintas charged the Plan imprudently
expensive recordkeeping fees.
Hawkins and Lung sued Cintas, as well the Cintas Investment Policy Committee (which
is tasked with administering the Plan) and the Cintas Board of Directors (which appoints
members to the committee).3 The suit was brought as a putative class action; Plaintiffs seek to
represent all participants in or beneficiaries of the Plan during the class period.
But Plaintiffs entered into multiple employment agreements with Cintas during the
course of their employment. While the various agreements differ slightly, all contained
1
Defined-contribution plans differ from defined-benefit plans. The Supreme Court has summarized the
difference between the two kinds of plans:
As its names imply, a “defined contribution plan” or “individual account plan” promises the
participant the value of an individual account at retirement, which is largely a function of the
amounts contributed to that account and the investment performance of those contributions.
A “defined benefit plan,” by contrast, generally promises the participant a fixed level of retirement
income, which is typically based on the employee’s years of service and compensation.
LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248, 250 n.1 (2008) (citations omitted).
2
Cintas does not dispute that it, as the Plan’s sponsor, is such a fiduciary. The Plaintiffs allege that each
defendant is a fiduciary.
3
Additional defendants include several John Does, who are members of the committee and other Cintas
employees and officers.
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 4
materially similar arbitration provisions and a provision preventing class actions.4
A representative example of Section 8—the relevant section—includes the following language
(with added emphasis):
The rights and claims of Employee covered by this Section 8, including the
arbitration provisions below, specifically include but are not limited to all of
Employee’s rights or claims arising out of or in any way related to
Employee’s employment with Employer, such as rights or claims arising
under the Age Discrimination in Employment Act, as amended, Title VII of the
Civil Rights Act of 1964, as amended (including amendments contained in the
Civil Rights Act of 1991), the Americans With Disabilities Act, 42 U.S.C. § 1981,
the Fair Labor Standards Act, the Employee Retirement Income Security Act,
state anti-discrimination statutes, other state or local laws regarding employment,
common law theories such as breach of express or implied contract, wrongful
discharge defamation, and negligent or intentional infliction of emotional distress.
...
Either party desiring to pursue a claim against the other party will submit to
the other party a written request to have such claim, dispute or difference
resolved through impartial and confidential arbitration.
...
Except for workers’ compensation claims, unemployment benefits claims, claims
for a declaratory judgment or injunctive relief concerning any provision of
Section 4 and claims not lawfully subject to arbitration, the impartial arbitration
proceeding, as provided above in this Section 8, will be the exclusive, final
and binding method of resolving any and all disputes between Employer and
Employee.
...
Except as otherwise required under applicable law, Employee and Employer
expressly intend and agree that class action and representative action procedures
shall not be asserted, nor will they apply, in any arbitration pursuant to this
Section 8; Employee and Employer agree that each will not assert class action or
representative action claims against the other in arbitration or otherwise; and
Employee and Employer shall only submit their own, individual claims in
arbitration and will not seek to represent the interests of any other person.
4
Hawkins signed employment agreements in 2011, 2014, and 2016. Lung signed employment agreements
in 2013, 2014, 2015, 2016, and 2017. The parties agree that the agreements are functionally the same, except for
Hawkins’s 2011 agreement, which did not contain a class-action waiver.
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 5
Arguing that those agreements required Hawkins and Lung to arbitrate these claims,
Cintas moved to compel arbitration and stay the federal proceedings. The district court denied
both motions. It concluded that the action was brought on behalf of the Plan, and it was
therefore irrelevant that Hawkins and Lung had consented to arbitration through their
employment agreements. Because the Plan itself did not consent, the court reasoned, the matter
was not subject to arbitration. Cintas now timely appeals.
II. ANALYSIS
A
We review a denial of a motion to compel arbitration de novo. Huffman v. Hilltop Cos.,
LLC, 747 F.3d 391, 394 (6th Cir. 2014). The Federal Arbitration Act, 9 U.S.C. §§ 1 et seq.,
requires district courts to compel arbitration “on issues as to which an arbitration agreement has
been signed.” Atkins v. CGI Techs. & Sols., Inc., 724 F. App’x 383, 389 (6th Cir. 2018) (quoting
KPMG LLP v. Cocchi, 565 U.S. 18, 22 (2011) (per curiam)). This requirement reflects “an
emphatic federal policy in favor of arbitral dispute resolution.” Ibid. (quoting KPMG, 565 U.S.
at 21). Generally, “[a] written provision in any . . . contract evidencing a transaction involving
commerce to settle by arbitration a controversy thereafter arising out of such contract or
transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at
law or in equity for the revocation of any contract.” 9 U.S.C. § 2. The burden of proving that
the claims are unsuited to arbitration rests with the party seeking to prevent arbitration. Green
Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91 (2000). Still, that policy must be balanced
with “ERISA’s policy . . . to provide ‘ready access to the Federal courts.’” Smith v. Aegon Cos.
Pension Plan, 769 F.3d 922, 931 (6th Cir. 2014) (quoting 29 U.S.C. § 1001(b)).
This court has not yet determined whether statutory ERISA claims are subject to
arbitration. But “every other circuit to consider the issue” has held that “ERISA claims are
generally arbitrable.” See Smith v. Bd. of Dirs. of Triad Mfg., Inc., 13 F.4th 613, 620 (7th Cir.
2021) (collecting cases from the Second, Third, Fifth, Eighth, Ninth, and Tenth Circuits). We
need not reach that issue, however, because neither party argues that Plaintiffs’ ERISA claims
could not, in theory, be subject to arbitration.
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 6
“ERISA imposes high standards of fiduciary duty upon administrators of an ERISA
plan.” Krohn v. Huron Mem’l Hosp., 173 F.3d 542, 547 (6th Cir. 1999). Section 502(a) of the
statute authorizes civil enforcement actions. 29 U.S.C. § 1132(a). Relevant here, a civil action
for breach of those fiduciary duties may be brought “by the Secretary [of Labor], or by a
participant, beneficiary or fiduciary.” Id. § 1132(a)(2); see also LaRue v. DeWolff, Boberg
& Assocs., Inc., 552 U.S. 248, 251 (2008) (“Section 502(a)(2) provides for suits to enforce the
liability-creating provisions of § 409, concerning breaches of fiduciary duties that harm plans.”).
B
Cintas contends that the Plaintiffs agreed to arbitrate all “rights and claims” relating to
their employment, including the ERISA claims at issue here. The breach-of-fiduciary-duty
claims and the “right” to assert them “belong,” it argues, to the Plaintiffs alone, and therefore this
case belongs in arbitration. Plaintiffs respond, and the district court agreed, that although
Plaintiffs are bringing a putative class action, the claims belong to the Plan itself. It is irrelevant,
according to Plaintiffs, that they may have agreed to arbitrate certain claims, since the Plan has
not likewise consented to arbitration. We agree that the Plaintiffs’ employment agreements do
not force this case into arbitration.
1
Section 502(a)(2) suits are “brought in a representative capacity on behalf of the plan as a
whole.” Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 142 n.9 (1985). Russell featured a
participant in a defined-benefit plan seeking damages for the plan administrator’s delay in
processing a disputed claim. See id. at 136-37, 144. The Supreme Court held that such a delay
did not give rise to a private right of action and that the statute only contemplated relief for “the
plan itself.” Id at 144. More recently, in LaRue, the Court re-evaluated Russell in the context of
a defined-contribution (as opposed to a defined-benefit) plan. 552 U.S. at 248.
There, the plaintiff alleged that he directed his employer to make certain changes to
investments in his individual retirement account. Id. at 251. The employer failed to follow
through, allegedly causing the plaintiff’s account to be depleted. Ibid. Arguing that this failure
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 7
constituted a breach of fiduciary duty, the employee sued under § 502(a)(3). Ibid. On appeal, he
contended that he was also entitled to relief under § 502(a)(2). Ibid.
The Court first observed that ERISA imposed statutory duties on plan fiduciaries to
“ensur[e] that ‘the benefits authorized by the plan’ are ultimately paid to participants and
beneficiaries.” Id. at 253 (quoting Russell, 473 U.S. at 142). The plaintiff in Russell, the Court
explained, “received all of the benefits to which she was contractually entitled.” Id. at 254. She
therefore was not entitled to recovery pursuant to § 502(a)(2) because the relevant fiduciary
relationship was between the fiduciary and the plan, not the fiduciary and the plaintiff. Ibid.
(citing Russell, 473 U.S. at 140). Russell “repeatedly identifies the ‘plan’ as the victim of any
fiduciary breach and the recipient of any relief” in the defined-benefit plan context because
misconduct by plan administrators only affects an individual’s entitlement to a defined benefit if
it risks depleting the entire plan. Id. at 254-55.
But with the advent of defined-contribution plans, fiduciary misconduct could
“diminish[] plan assets payable to all participants and beneficiaries, or only to persons tied to
particular individual accounts.” Id. at 255-56. Therefore, Russell’s “emphasis on protecting the
‘entire plan’ from fiduciary misconduct” no longer applies in the defined-contribution context.
Id. at 254. Now, the “victim” could be an individual account, even if the plan as a whole
remains secure. Id. at 255-56. The Court “therefore [held] that although § 502(a)(2) does not
provide a remedy for individual injuries distinct from plan injuries, that provision does authorize
recovery for fiduciary breaches that impair the value of plan assets in a participant’s individual
account.” Id. at 256.
LaRue therefore means that while any claims properly brought under § 502(a)(2) must be
for injuries to the plan itself, § 502(a)(2) authorizes suits on behalf of a defined-contribution plan
even if the harm is inherently individualized. LaRue does not, however, specifically hold that a
§ 502(a)(2) claim “belongs” to either the plaintiff or the plan itself. Consequently, we must look
elsewhere to determine whether an arbitration provision that is binding only on a plan participant
draws a § 502(a)(2) suit into arbitration.
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 8
2
To demonstrate that these claims belong to the Plan, Plaintiffs look to out-of-circuit cases
analyzing LaRue. Primarily, they rely on Munro v. University of Southern California., 896 F.3d
1088 (9th Cir. 2018).5 That case presented facts nearly identical to this case. Employees signed
arbitration agreements as part of their employment contracts requiring both the employer and
employee to “arbitrate all claims that either the Employee or [the Employer] has against the other
party.” Id. at 1090. A group of employees filed a putative class action alleging breaches of
fiduciary duty by administrators of two ERISA-governed retirement plans.6 Ibid. The question
before the court, as here, was whether the employer could compel the plaintiffs to arbitrate the
breach-of-fiduciary-duty claims.
The Ninth Circuit looked to a different case which asked a similar question: “[W]hether a
standard employment arbitration agreement covered qui tam claims brought by the employee on
behalf of the United States under the False Claims Act (‘FCA’).” Id. at 1092 (citing United
States ex rel. Welch v. My Left Foot Children’s Therapy, LLC, 871 F.3d 791 (9th Cir. 2017)).
There, “[b]ecause ‘the underlying fraud claims asserted in a FCA case belong to the government
and not to the relator,’ [the Ninth Circuit] held that the claims were not claims that the employee
had against the employer and therefore not within the scope of the arbitration agreements.” Ibid.(quoting Welch, 871 F.3d at 800 & n.3). In analyzing whether § 502(a)(2) claims should be
treated in the same fashion, the court observed:
There is no shortage of similarities between qui tam suits under the FCA and suits
for breach of fiduciary duty under ERISA. Most importantly, both qui tam
relators and ERISA § 502(a)(2) plaintiffs are not seeking relief for themselves. A
party filing a qui tam suit under the FCA seeks recovery only for injury done to
the government, Vt. Agency of Nat. Res. v. U.S. ex rel. Stevens, 529 U.S. 765,
771–72, 120 S. Ct. 1858, 146 L.Ed.2d 836 (2000), and a plaintiff bringing a suit
5
Plaintiffs also suggest that a recent Second Circuit opinion, Cooper v. Ruane Cunniff & Goldfarb Inc.,
990 F.3d 173 (2d Cir. 2021), supports their position. While the court held that a plaintiff’s § 502(a)(2) suit did not
fall under an arbitration provision in his employment agreement, it reached this conclusion because the breach-of-
fiduciary-duty claims did not “relate to” his employment. Cooper, 990 F.3d at 185. That reasoning, therefore, does
not assist us in determining whether a § 502(a)(2) claim “belongs to” the Plan or the Plaintiffs.
6
While the opinion does not expressly state that the plaintiffs brought suit pursuant to § 502(a)(2), it is clear
from context that the case concerned that type of suit. See Munro, 896 F.3d at 1092.
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 9
for breach of fiduciary duty similarly seeks recovery only for injury done to the
plan. LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248, 256, 128 S. Ct.
1020, 169 L.Ed.2d 847 (2008); accord id. at 261, 128 S. Ct. 1020 (Thomas, J.,
concurring).
Id. at 1092–93.
The court in Munro interpreted the principle in Welch as “compelled by [the] recognition
that the government, rather than the relator, stands to benefit most from the litigation.” Id. at
1093 (citing Welch, 871 F.3d at 800). The qui tam claims were outside the scope of the
arbitration agreement even though “the relator is entitled to more than a nominal share of the
government’s recovery” and “the FCA provides that the relator brings suit not only for ‘the
United States Government’ but also ‘for the person.’” Ibid. (quoting Welch, 871 F.3d at 800 and
31 U.S.C. § 3730(b)). Critically, the “language [in the arbitration agreements] [did] not extend
to claims that other entities have against the [employer.]” Id. at 1092.
Nor did LaRue compel a different result: “The relief sought demonstrate[d] that the
Employees [were] bringing their claims to benefit their respective Plans across the board, not just
to benefit their own accounts as in LaRue.” Id. at 1094. Ultimately, then, even though
§ 502(a)(2) claims “belong” in part to the plaintiffs, Munro held that they are not subject to
arbitration notwithstanding individual employment agreements because the claims are asserted
on behalf of the ERISA plan as a whole.
While Munro is not binding on this court, its reasoning is persuasive and supported by the
history of § 502(a)(2) suits. The Third Circuit’s discussion of statutory standing in Graden v.
Conexant Systems Inc. sheds light on the representative nature of § 502(a)(2) claims:
As [§ 502(a)(2)] addresses losses to ERISA plans resulting from fiduciary
misconduct, the Supreme Court has held that suits under it are derivative in
nature—that is, while various parties are entitled to bring suit (participants,
beneficiaries, fiduciaries, and the Secretary of Labor), they do so on behalf of the
plan itself. Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 144, 105 S.Ct. 3085,
87 L.Ed.2d 96 (1985); see also In re Schering-Plough Corp. ERISA Litigation,
420 F.3d 231, 241 (3d Cir.2005). Consequently, the plan takes legal title to any
recovery, which then inures to the benefit of its participants and beneficiaries.
496 F.3d 291, 295 (3d Cir. 2007) (footnote omitted).
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 10
The derivative nature of these actions comes from common-law trust principles:
“[§ 502(a)(2)] merely codifies for ERISA participants and beneficiaries a classic trust-law
process for recovering trust losses through a suit on behalf of the trust.” Id. at 296. Although
§ 502(a)(2) claims are brought by individual plaintiffs, it is the plan that takes legal claim to the
recovery, suggesting that the claim really “belongs” to the Plan. And because § 502(a)(2) claims
“belong” to the Plan, an arbitration agreement that binds only individual participants cannot
bring such claims into arbitration.
3
Cintas stops short of arguing that Munro was wrongly decided.7 Instead, it aims to
distinguish the employment agreements in Munro from those signed by Hawkins and Lung.
While the agreements in Munro required the employees to “arbitrate ‘all claims’,” Munro,
896 F.3d at 1092, the agreements here, as Cintas recites, “cover ‘all of Employee’s rights or
claims . . . arising under . . . the Employee Retirement Income Security Act.’ By contrast, the
agreements in Munro covered only ‘claims’ of the employees—not any ‘rights’—and they did
not refer to ERISA at all.” Appellant Br. at 21 (emphasis and alterations in original) (citations
omitted). The “right” to bring the § 502(a)(2) claim, the argument goes, “indisputably belongs to
Plaintiffs,” because the statute “confers on ‘participants,’ but not plans, the right to assert claims
for breach of fiduciary duty under ERISA.” Ibid.
But the inclusion of the word “rights” does not render the Plaintiffs’ agreements
fundamentally different from the agreements in Munro and Welch. Cintas does not provide any
case law interpreting the word “rights.” And Plaintiffs’ “right,” even according to Cintas, is to
bring a representative action pursuant to § 502(a)(2). Cintas does not explain how it would be
possible to arbitrate such a “right” (or any “right” at all).
7
In arguing that the Plan has consented to arbitration, however, Cintas suggests that Munro’s analogy
between FCA claims and § 502(a)(2) claims is misguided. FCA claims, according to Cintas, are entirely unlike
§ 502(a)(2) claims. But Cintas overstates its point. While it does cite differences between the statutory schemes, the
fundamental point remains the same: Both statutes require a plaintiff to bring suit in the plaintiff’s own name on
behalf of a non-party entity, and the remedy is paid out to that non-party entity. In fact, as Munro explains, FCA
claims “belong” more to the plaintiff than a § 502(a)(2) suit, because in FCA claims the relator is statutorily entitled
to a portion of the recovery. See Munro, 896 F.3d at 1094. (“If anything, because recovery under ERISA § 409(a)
is recovery singularly for the plan, the qui tam relator has a stronger stake in the outcome of an FCA case than does
a § 502(a)(2) plaintiff in an ERISA claim.”) (citations omitted).
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 11
Moreover, Cintas’s argument glides over the text of the employment agreements, which
do not expressly require employees to “arbitrate” all “rights.” Instead, the arbitration section
contains three key provisions. The first is: “The rights and claims of Employee covered by this
Section 8, including the arbitration provisions below, specifically include but are not limited to
all of Employee’s rights or claims arising out of or in any way related to Employee’s
employment with Employer, such as rights or claims arising under [ERISA].” The second
relevant provision, with added emphasis, is: “Either party desiring to pursue a claim against the
other party will submit to the other party a written request to have such claim, dispute or
difference resolved through impartial and confidential arbitration.” The third, finally, is:
“Except for workers’ compensation claims, unemployment benefits claims, claims
for a declaratory judgment or injunctive relief concerning any provision of
Section 4 and claims not lawfully subject to arbitration, the impartial arbitration
proceeding, as provided above in this Section 8, will be the exclusive, final and
binding method of resolving any and all disputes between Employer and
Employee.”
In other words, a “claim, dispute or difference” is subject to arbitration, and the
employee’s ERISA-related rights and claims are “covered” by the “arbitration provision.” So it
is not “rights” that are subject to arbitration, but “claims,” “disputes,” and “differences.” The
arbitration provisions in Plaintiffs’ employment agreements, therefore, are not materially
different from the corresponding provisions in Munro (employees agreed to arbitrate “all
claims”) and Welch (employees agreed to arbitrate “all disputes”). 896 F.3d at 1092; 871 F.3d at
797-98.
Cintas also argues that, unlike the Plaintiffs in Munro, the Plaintiffs here are actually
asserting claims on their own behalf, not on behalf of the Plan. First, it distinguishes defined-
contribution plans (such as the Plan) from defined-benefit plans and asserts that the former
claims belong to the individual participant because “any relief that the participant obtains
depends on the value of her individual account and redounds entirely to her.” True, the Ninth
Circuit has observed, in dicta, that an ERISA claim “belonged to the individual plaintiff” and not
the plan. Comer v. Micor, Inc., 436 F.3d 1098, 1103 (9th Cir. 2006). But the context was
different—the court was discussing its holding in a prior case where it declined to treat the plan
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 12
as the “real plaintiff” because doing so would unfairly bar the plaintiff’s claim due to a statute of
limitations. Ibid. (quoting Landwehr v. DuPree, 72 F.3d 726, 732 (9th Cir. 1995)).
Moreover, interpreting the claim as belonging to the individual, rather than the Plan,
appears to conflict with LaRue, which held that Ҥ 502(a)(2) does not provide a remedy for
individual injuries distinct from plan injuries.” 552 U.S. at 256; accord id. at 261 (“The plain
text of § 409(a), which uses the term ‘plan’ five times, leaves no doubt that § 502(a)(2)
authorizes recovery only for the plan.”) (Thomas, J., concurring in the judgment). The fact that
the individual Plaintiffs will indirectly benefit from a remedy accruing to the Plan as a whole
does not render the claims individualized.
Nor does Cintas’s selective quotation of the Complaint persuade otherwise. It is true that
Plaintiffs state that they are seeking relief “on behalf of themselves.” But the Complaint plainly
seeks relief for the Plan as a whole and expressly states that Plaintiffs are suing on behalf of the
Plan. It is also true that Plaintiffs are proceeding as a putative class. That appears to be due,
however, to the unusual representative nature of a § 502(a)(2) action. There is no indication that
Plaintiffs seek relief for actions that affected them individually, as in LaRue. Instead, Plaintiffs
argue that Cintas breached its fiduciary duties by offering higher-cost investment options and
charging excessive recordkeeping fees. Those alleged breaches do not impact the Plaintiffs
specifically; the harm (and the recovery) is to the Plan.
Cintas’s other examples supposedly demonstrating that Plaintiffs “understood” they were
filing individual claims fare similarly. For example, Cintas notes that Plaintiffs brought a
putative class action, contending that if they were truly representing the Plan, and not
individuals, this would be unnecessary. It also notes that Plaintiffs seek attorney’s fees for their
own attorneys, though these attorneys do not represent the Plan.
Those arguments are unpersuasive. The fact that Plaintiffs are seeking certain relief,
some of which they may ultimately not be entitled to, does not bear on the legal status of their
claims. And Plaintiffs do not concede that their action requires an ultimate grant of class
certification. Instead, they argue, they proceeded as a class because some courts have held “that
the representative nature of the section 502(a)(2) right of action implies that plan participants
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 13
must employ some procedures to protect effectively the interests they purport to represent.”
Coan v. Kaufman, 457 F.3d 250, 259 (2d Cir. 2006). Although Cintas cites a Seventh Circuit
case, Spano v. The Boeing Co., 633 F.3d 574 (7th Cir. 2011), to suggest that the class-action
context implies individual claims, that case in fact cuts against its argument. In Spano, the court
evaluated whether LaRue permitted class actions for participants in defined-contribution plans.
See id. at 579–85. It distinguished “between an injury to one person’s retirement account that
affects only that person, and an injury to one account that qualifies as a plan injury. The latter
kind of injury potentially would be appropriate for class treatment, while the former would not.”
Id. at 581. The Plaintiffs’ injuries here are, as discussed above, injuries to the Plan as a whole.
If, for instance, the named Plaintiffs were to be swapped out with two other employees, nothing
material in the complaint would need to be changed. Plaintiffs’ class-action posture does not
suggest that they are bringing individual, as opposed to Plan, claims.
A different sort of claim might change the analysis. In LaRue, for example, Chief Justice
Roberts suggested that some suits masquerading as § 502(a)(2) claims should instead be brought
pursuant to § 503(a)(1)(B). See LaRue, 552 U.S. at 257-58 (Roberts, C.J., concurring in part and
concurring in the judgment). “That provision allows a plan participant or beneficiary ‘to recover
benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan,
or to clarify his rights to future benefits under the terms of the plan.’” Id. at 257 (quoting
29 U.S.C. § 1132(a)(1)(B)). When suits should really be brought under § 503(a)(1)(B), relief
under § 502(a)(2) may not be available. Id. at 258.
But the claim in LaRue had more hallmarks of a § 503(a)(1)(B) claim than does the claim
brought by these Plaintiffs. LaRue’s claim was “a claim for benefits that turns on the application
and interpretation of the plan terms, specifically those governing investment options and how to
exercise them.” Id. at 257. Plaintiffs, on the other hand, allege that the defendants violated
fiduciary duties rather than the Plan terms themselves. Had Plaintiffs brought a claim under
§ 503(a)(1)(B), or a claim that should have been brought under that section, then it might be the
kind of individual claim subject to arbitration under an individual participant’s employment
agreement. And while we need not decide whether a § 502(a)(2) claim could ever be covered by
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 14
an individual employment agreement’s arbitration provision, we hold that these Plaintiffs’ claims
are not covered by the employment agreements in this case.
Ultimately, the Plaintiffs are seeking Plan-wide relief through a statutory mechanism that
is designed for representative actions on behalf of the Plan. The weight of authority suggests
that these claims should be thought of as Plan claims, not Plaintiffs’ claims. And because the
arbitration provisions only establish the Plaintiffs’ consent to arbitration, the employment
agreements do not subject these claims to arbitration.
C
1
Even assuming arguendo that the claims here are the Plaintiffs’ claims, or that it is
Plaintiffs’ right to bring the claim and that “right” is covered by the arbitration provision,
compelling arbitration would still be improper absent Plan consent. First, the “right” to bring the
claim is not necessarily exclusive. Section 502(a)(2) claims belong to the Plan as well. See In re
Schering Plough Corp. ERISA Litig., 589 F.3d 585, 594 (3d Cir. 2009) (“Section 502(a)(2)
claims are, by their nature, plan claims.”). Plaintiffs compare this situation to a release of claims,
where one party cannot unilaterally waive another’s rights. They cite a wide body of case law—
albeit none from this court—holding that individuals cannot release a defined-contribution plan’s
right to recover for breaches of fiduciary duty. See, e.g., ibid. (“[A] number of courts have held
that, as a matter of law, an individual cannot release the plan’s claims . . . .”); Bowles v. Reade,
198 F.3d 752, 760 (9th Cir. 1999) (“Because Bowles’s claims are not truly individual, it was
proper for the district court to conclude that Bowles could not settle them without The Plans’
consent.”); Leber v. Citigroup 401(k) Plan Inv. Comm., 323 F.R.D. 145, 161 (S.D.N.Y. 2017)
(“In cases brought on behalf of a plan, most courts have held that individuals do not have the
authority to release a defined contribution plan’s right to recover for breaches of fiduciary duty;
the consent of the plan is required for a release of 29 U.S.C. § 1132(a)(2) claims.”) (quotation
marks and citation omitted).
Cintas responds that waivers and releases are the wrong analogy. Instead, it urges, we
should think of arbitration provisions as specialized forum-selection clauses: Just as Plaintiffs
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 15
chose to bring this case in Ohio federal court, so too they “chose” to arbitrate ERISA claims.
Cintas cites Smith, 769 F.3d 922, for this proposition. There, this court considered whether
ERISA precluded the application of a venue-selection clause in the plan documents. Id. at 931-
33. To support the conclusion that those clauses were enforceable, we observed that “[w]e have
previously upheld the validity of mandatory arbitration clauses in ERISA plans.” Id. at 932
(citing Simon v. Pfizer Inc., 398 F.3d 765, 773 (6th Cir. 2005)). But in Simon, the claims subject
to arbitration stemmed from the same agreement that contained the arbitration provision.
398 F.3d at 772-73. And, moreover, we held that the plaintiff’s statutory ERISA claims were not
subject to arbitration because the arbitration provision’s scope was limited to disputes concerning
termination. Id. at 775-76. In both decisions, then, arbitration provisions in the plan documents
were dispositive; individual employment agreements did not play a role. Smith does not
therefore suggest that individuals can consent to arbitration without the consent of the Plan. Nor
does Cintas provide any authority suggesting that Plaintiffs can unilaterally bind an ERISA plan
to arbitration in the absence of an arbitration provision in the plan documents or some other
manifestation of the plan’s consent.
2
Finally, Cintas argues in the alternative that even if the Plan’s consent is required, it
nonetheless should prevail because the Plan has consented to arbitration here. Noting that the
Plan can only act through its agents, it suggests that a plan sponsor, acting alone, can enter into
agreements that bind a plan. It also suggests that because the sponsor has consented to
arbitration (including by filing this lawsuit) the Plan has also consented. But Cintas stretches
case law too far. True, we have held that non-signatories may be bound to an arbitration
agreement through agency principles. See Crossville Med. Oncology, P.C. v. Glenwood Sys.,
LLC, 310 F. App’x 858, 860 (6th Cir. 2009) (quoting Javitch v. First Union Sec., Inc., 315 F.3d
619, 629 (6th Cir. 2003)). But Crossville bound a non-signatory to an arbitration agreement only
because the signatory entity was its alter ego. Ibid. The same is true of the entities in Pritzker v.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 7 F.3d 1110, 1122 (7th Cir. 1993). Cintas does not
provide any authority suggesting that the relationship between an ERISA plan and its sponsor is
akin to that of alter-ego business entities.
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 16
Its estoppel theory is similarly underdeveloped.8 But neither of the two cited cases
involved arbitration. Deschamps v. Bridgestone Americas, Inc. Salaried Employees Retirement
Plan discussed equitable estoppel in the ERISA context and listed several elements required for a
finding of equitable estoppel. See 840 F.3d 267, 273 (6th Cir. 2016). The same is true of Paul v.
Detroit Edison Co. & Michigan Consolidated Gas Co. Pension Plan, 642 F. App’x 588, 593 (6th
Cir. 2016). Cintas does not attempt to explain how those requirements are met here.
The fact that other non-signatories to the employment agreements, such as Cintas’s
board, investment policy committee, and CEO, are parties to the lawsuit also does not help
Cintas’s position. Cintas suggests that including them as defendants constitutes a tacit admission
that those parties consented to arbitration, and that the Plan should be treated like these non-
signatories. But Plaintiffs have not suggested that those parties have in fact consented to
arbitration. Instead, the lawsuit alleges that those parties, acting on behalf of Cintas, have
breached fiduciary duties owed to the Plan.
Ultimately, Cintas’s position dissolves the distinction between the Plan sponsor and the
Plan as a legal entity. Moreover, as the district court observed, Cintas is hinting that it should be
able to unilaterally decide it wants to arbitrate claims against itself. See Brown ex rel. Henny
Penny Corp. Emp. Stock Ownership Plan v. Wilmington Tr., N.A., No. 3:17-cv-250, 2018 WL
3546186, at *5 (S.D. Ohio July 24, 2018) (“Allowing the fiduciary to unilaterally require plan
participants to arbitrate claims for breach of fiduciary duty would, in a sense, be allowing the fox
to guard the henhouse.”) (quotation marks and citation omitted). True, Cintas could amend the
plan documents to include an arbitration provision, which might accomplish the same goal. But
we need not, and do not, decide whether an arbitration provision in the plan documents would
subject § 502(a)(2) claims to arbitration.
In the absence of a sufficient manifestation of the Plan’s consent to arbitrate these claims,
we hold that the Plan has not consented to arbitration. There is, therefore, no basis for the
Plaintiffs’ claims to be arbitrated.
8
Cintas says that “this Court has even held that a plan sponsor’s actions can bind a plan under an estoppel
theory, without the formation of an enforceable agreement entered into by either the plan sponsor or the plan.”
Appellant Br. at 32. It then cites Deschamps and Paul. Ibid.
No. 21-3156 Hawkins, et al. v. Cintas Corp., et al. Page 17
III. CONCLUSION
For the reasons given above, we AFFIRM the district court’s conclusion that the
§ 502(a)(2) claims are not covered by the arbitration provisions in the Plaintiffs’ respective
employment agreements and that the Plan’s consent is required for arbitration. We further
AFFIRM the district court’s ruling that the Plan has not in fact consented to arbitration.