District Court: ESOP Arbitration Provision Doesn't Apply To "Cashed-Out" Participant

Gregory K Brown is a Partner in Holland & Knight's Chicago office.

Chelsea Ashbrook McCarthy is a Partner in Holland & Knight's Chicago office.

Christopher K Buch is a Associate in Holland & Knight's Chicago office.

HIGHLIGHTS:

• The U.S. District Court for the Southern District of Ohio has ruled that the arbitration provision of an employee stock ownership plan (ESOP) does not apply to the plaintiff's class representative because she had "cashed out" of the ESOP before the arbitration provision was added and because she was not a "claimant" subject to the arbitration provision.
• The case is different from a recent U.S. Court of Appeals for the Ninth Circuit decision on arbitration clauses because the clause in the Southern District of Ohio case was in an ESOP plan document, not in an individual employment agreement.