I wanted to quickly pass along, with a couple of comments, this excellent blog post by Scott Galbreath of Trucker Huss on a recent Ninth Circuit decision on interpreting and applying releases of ERISA claims executed by employees. As the post points out, the Ninth Circuit adopted the tests of other circuits, including the First Circuit, that allow for a broad factual inquiry into whether an employee knowingly intended to waive fiduciary duty or other ERISA claims, and for purposes of understanding the scope of the release that was actually granted.

As a denizen of the First Circuit, from where the Ninth Circuit, in part, borrowed its test, and one who has litigated this issue on multiple occasions in the courts of the First Circuit, I wanted to pass along two things, one congratulatory and the other a tip for the unwary.

First, bravo to the Ninth Circuit for adopting this standard and also for thoroughly explaining how to use it. The intersection of releases with ERISA governed benefits, as well as with a fiduciary’s obligations, is a little backwater corner of ERISA law that, frankly, is ripe for abuse and, even when not, can give rise to a great deal of misunderstanding and confusion in the relationship between plan sponsors and plan participants. This decision – particularly since its guidance is likely to be borrowed in decisions and lawsuits elsewhere – will help with those problems.

Second, and props to the lawyers for the employees who were able to get this issue tackled head on by the Court, lawyers working on cases involving the scope of releases and their relationship to ERISA claims should be aware that – in my experience – these rules are often recognized more in the breach than in the application. Just a word to the wise from one who has litigated this issue more than once in one of the first circuits (pun intended) to really open the door to close examination of the intended scope of ERISA releases.