Matula v. Wells Fargo & Co., No. 25-2441, __ F.4th __, 2026 WL 1293295 (8th Cir. May 12, 2026) (Before Circuit Judges Colloton, Gruender, and Kobes)

Class actions alleging the improper use of forfeited employer contributions to retirement plans have been all the rage for the last couple of years, with most going down in flames at the pleading stage. Those cases are now bubbling up to the appellate courts, and this published decision by the Eighth Circuit represented the first circuit court ruling on the topic. The decision did not tackle the full range of issues presented by forfeiture cases, and instead limited its discussion to standing, so it will have to serve merely as an appetizer to the main courses yet to come. (Coincidentally, oral argument in Hutchins v. HP, another such case, is taking place today in the Ninth Circuit.)

The plaintiff was Thomas Matula, Jr., who was previously employed by Wells Fargo & Company and was a participant in its defined contribution 401(k) plan. As is common in such plans, employees participating in the plan can make contributions that vest immediately, while Wells Fargo matches a certain percentage as an employee benefit. However, Wells Fargo’s contributions do not vest immediately; instead, they vest over time and do not fully vest until an employee has completed three years of employment. Employees who leave before three years forfeit any unvested matching contributions.

The question, as always in these cases, is what happens to those forfeited contributions? The plan gave Wells Fargo the discretion to use these forfeited funds in one of three ways: “(1) to offset its employer contributions, (2) ‘to pay the expenses of the Plan,’ or (3) ‘to make corrective adjustments to Accounts.’” Wells Fargo chose option number one, which benefited it because that option reduced the amount it needed to pay to meet its contribution obligations.

Matula challenged this practice in his complaint. He alleged that Wells Fargo’s use of forfeited funds to offset its matching contributions, rather than using them to pay plan expenses or make corrective adjustments, constituted a breach of fiduciary duty and self-dealing under ERISA. He contended that the plan did not authorize Wells Fargo to use forfeited funds in the manner it did, and that its misuse of funds harmed plan participants.

Wells Fargo filed a motion to dismiss, arguing that Matula lacked Article III standing because he failed to allege an injury in fact. The district court agreed, concluding that Matula had not demonstrated an actual injury to himself that was traceable to Wells Fargo’s use of forfeited funds, and dismissed Matula’s complaint with prejudice. (Your ERISA Watch covered this decision in our June 25, 2025 edition.)

Matula appealed, and the Eighth Circuit reviewed the case de novo because it involved jurisdictional issues. At the outset, the appellate court took a different approach from the district court. Wells Fargo acknowledged that it was making a facial attack on Matula’s standing, which involved (1) evaluating the allegations in the complaint as true, (2) “considering only the materials that are necessarily embraced by the pleadings,” and (3) assuming that Matula would be successful on the merits. The district court had deviated from this approach by adopting Wells Fargo’s interpretation of the plan rules and concluding that Matula lacked standing because he was not entitled to any forfeited funds under that interpretation. The Eighth Circuit “agree[d] with Matula that the district court’s analysis departed from our precedent.”

Unfortunately for Matula, this was insufficient to save the day. The court emphasized that to have standing Matula “must plead a ‘particularized injury that affects [him] in a personal and individual way’ and that is traceable to the violating act or acts allegedly taken by Wells Fargo.” However, Matula “candidly acknowledged that the complaint does not allege any actual injury to Matula’s Plan account stemming from Wells Fargo’s use of forfeited funds.” Instead, Matula emphasized “plan-level” harms.

This concession doomed his appeal. “Having reviewed the complaint and the materials encompassed by it, we agree with that assessment. Therefore, even after accepting Matula’s assertion that the Plan rules allowed Wells Fargo to use forfeited funds to ‘pay expenses of the Plan’ or ‘make corrective adjustments,’ we affirm that Matula failed to plead an injury in fact and thus lacked Article III standing.”

The Eighth Circuit did throw Matula a bone, however: “That said, we agree with Matula that the district court abused its discretion by dismissing his complaint with prejudice.” The court noted that dismissals for lack of jurisdiction should generally be without prejudice, and “[t]he stark circumstances that might justify departing from that general rule are not present here.” As a result, the appellate court affirmed the dismissal of Matula’s complaint for lack of Article III standing, but remanded the case to the district court to enter a dismissal without prejudice.

Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.

Arbitration

Ninth Circuit

Dixon v. MultiCare Health Sys., No. CV25-5414, 2026 WL 1295903 (W.D. Wash. May 12, 2026) (Judge Benjamin H. Settle). Ryan Adam Dixon was a registered nurse at MultiCare Good Samaritan Hospital. He alleges in this action that MultiCare violated his rights in a number of ways, including improperly automatically enrolling him in a 401(k) retirement account. In March, the court ordered that the case should go to arbitration pursuant to the 401(k) plan’s arbitration provision, and stayed Dixon’s ERISA claims. In doing so, the court rejected Dixon’s arguments that (1) the provision prevented him from “effectively vindicating” his rights, and (2) MultiCare waived its right to insist on arbitration. (The court also admonished Dixon, who was proceeding pro se, because he “repeatedly cites to nonexistent cases and to other cases that do not support the proposition for which they were offered.” Your ERISA Watch covered this ruling in our March 11, 2026 edition.) Dixon was not deterred, however, and filed a motion for reconsideration, which the court denied in this order. Dixon argued that (1) he never received notice of the 401(k) plan and thus “never consented to arbitrate,” (2) his “continued deferrals” did not qualify as “informed” or “voluntary” acceptance of the arbitration clause, and (3) the court “failed to fully analyze the enforceability of each part of the arbitration clause, including the ‘representative-action waiver,’ ‘fallback clause,’ ‘minimum-change necessary provision,’ ‘enforceability designation,’ and the ‘unenforceable-section fallback.’” The court made short work of these arguments, noting that Dixon had not previously disputed his consent to arbitrate in earlier filings and that reconsideration was not warranted based on arguments or evidence that could have been raised earlier. Furthermore, the court ruled that thanks to Dixon’s clarification of his arguments, “the Court concludes that his breach of fiduciary claim must be dismissed.” The court stated that a pro se litigant cannot litigate claims not personal to him, and thus Dixon could not assert the ERISA breach of fiduciary duty claims which he was purporting to bring on behalf of the plan. Finally, the Court declined to clarify which documents may be reviewed by the arbitrator, as it had already concluded that MultiCare produced all statutorily required documents. As a result, Dixon’s motion was denied, and the case will continue in arbitration.

Breach of Fiduciary Duty

Ninth Circuit

Chavez v. East Bay Drayage Drivers Security Fund Plan, No. 24-CV-03487-MMC, 2026 WL 1365807 (N.D. Cal. May 15, 2026) (Judge Maxine M. Chesney). Through her husband, Leah Chavez was a beneficiary under the ERISA-governed East Bay Drayage Drivers Security Fund Plan, which provides benefits to employees who are members of Teamsters Local 70 and their families. In 2023, Chavez’s benefits were terminated because the plan determined that her marriage had ended and thus her coverage had expired. Her appeal was denied, and thus she brought this action against the plan, its board of trustees, the plan administrators, and two of the plan’s lawyers. The two claims Chavez brought against the lawyers were for breach of fiduciary duty and interference with rights under ERISA. The parties filed cross-motions for summary judgment on these claims. On the breach of fiduciary duty claim, the court ruled that Chavez failed to raise a genuine issue of material fact regarding whether the lawyers “performed more than the usual professional services in advising their client in connection with plaintiff’s eligibility for benefits under the Plan.” The lawyers provided declarations stating their work involved reviewing documents and providing legal advice, which did not exceed traditional legal services. “Although plaintiff disagrees with the legal advice provided and criticizes the adequacy of the legal work done in advance thereof…such challenge does not constitute the type of showing necessary to support a finding of fiduciary status.” As for Chavez’s retaliation claim, she contended she was no longer pursuing it against the two lawyers. The court treated this attempted withdrawal as an amendment governed by Rule 16 of the Federal Rules of Civil Procedure, which requires a showing of “good cause.” Chavez did not provide good cause for the unilateral withdrawal of her retaliation claim, and thus the court granted the lawyers’ motion on this count as well. As a result, the lawyers’ motion for summary judgment was granted in full.

Discovery

Tenth Circuit

Mayor v. Metropolitan Life Ins. Co., No. 1:25-CV-00012, 2026 WL 1339911 (D. Utah May 14, 2026) (Judge David Barlow). Nicole Mayor brought this action against Metropolitan Life Insurance Company and two officers of Union Pacific Railroad, who were administrators of an ERISA-governed accidental death benefit plan under which her husband, Casey Mayor, was covered. Mr. Mayor died in May of 2023. After his death, Ms. Mayor requested a copy of the accidental death insurance policy but did not receive it. She also submitted a claim for benefits under the plan, but MetLife denied it, contending that benefits were not payable under a policy exclusion for deaths caused by the “voluntary” use of illicit drugs, as records suggested that Mr. Mayor’s death was due to fentanyl. Ms. Mayor then brought this suit, which included a claim under ERISA for statutory penalties due to Union Pacific’s failure to provide required information, and a claim for improper denial of benefits. At issue in this order was a discovery dispute. Ms. Mayor contended that the administrative record as produced by defendants was incomplete, and thus she filed an objection to the composition of the record, as well as a motion for discovery. In her discovery motion Ms. Mayor proposed seventeen document requests, which she divided into four categories: (1) documents regarding MetLife’s conflict of interest; (2) documents missing from the record; (3) documents referenced in the defendants’ pleadings; and (4) documents related to MetLife’s role in responding to plan information requests. To start, the court denied Ms. Mayor’s requests for discovery into MetLife’s conflict of interest, as she failed to justify the necessity of this discovery. The court noted that while MetLife’s dual role as claim administrator and payor presented a conflict of interest, Ms. Mayor did not substantively explain why her specific discovery requests were necessary. The court emphasized that ERISA cases are generally limited to the administrative record, and extra-record discovery is only appropriate “in ‘exceptional circumstances’ and ‘unusual cases.’” However, the court granted Ms. Mayor’s requests for documents that should have been included in the administrative record, such as the “actual” plan documents (the record only contained a summary plan description) and documents granting MetLife discretionary authority. The court noted that there might not be a master plan document, but “there is no question all plan documents MetLife compiled in the course of denying Ms. Mayor’s claim should be in the record,” and this included “all plan documents compiled in the course of denying the claim. If any documents are missing, the defendants must supplement the record accordingly.” This included any documents explicitly granting MetLife discretionary authority. Moving on, the court denied Ms. Mayor’s request for documents regarding MetLife’s alleged failure to consider Utah law regarding the proper interpretation of the policy term “voluntary,” as she had already failed to show that extra-record discovery was necessary. On this issue, “[t]he record is sufficient as it stands.” Next, the court granted Ms. Mayor’s requests for documents referenced in the defendants’ pleadings, but only to the extent they sought documents compiled by MetLife in the course of making its benefits decision. Finally, the court granted Ms. Mayor’s request for documents relating to her statutory penalty claim, specifically agreements between Union Pacific and MetLife regarding MetLife’s role in responding to information requests. The court found these documents relevant and necessary under Ms. Mayor’s theory of the claim, which was “premised on an agency relationship between Union Pacific and MetLife.” The court ordered defendants to supplement the administrative record with responsive documents, or provide verifications that the documents at issue did not exist.

Life Insurance & AD&D Benefit Claims

Fourth Circuit

Metropolitan Life Ins. Co. v. Cooper, No. 1:25-CV-1161, 2026 WL 1346605 (M.D.N.C. May 14, 2026) (Magistrate Judge L. Patrick Auld). This case involves a dispute over $124,000 in life insurance proceeds following the death of Thomas Eugene Fisher III, an employee of Daimler Trucks North America, LLC, who was a participant in Daimler’s ERISA-governed life insurance benefit plan. The plan was insured through a group policy issued by Metropolitan Life Insurance Company. In 2018, Fisher designated his domestic partner, Monica Overcash, as the beneficiary of his life insurance. However, in 2022, Fisher changed the beneficiary to his sister, Diane Cooper. Fisher passed away in April of 2025 due to complications from diabetes. Cooper submitted a claim for the benefits, but Overcash contested this, claiming Fisher lacked the mental capacity to change his beneficiary due to his health condition. Meanwhile, Cooper assigned $6,030.65 of the insurance proceeds to Summersett Funeral Home to cover Fisher’s funeral expenses. MetLife then filed this interpleader action, naming Overcash, Cooper, and Summersett as defendants. Cooper and Summersett filed answers, but Overcash failed to respond to the complaint. MetLife then filed a motion to deposit the insurance proceeds with the court and be discharged from liability. MetLife requested that the court determine the rightful claimant to the proceeds, as well as reimbursement for attorney’s fees and costs. The assigned magistrate judge recommended granting MetLife’s motion in part and denying it in part. The court found that MetLife properly invoked interpleader under Federal Rule of Civil Procedure 22, as the parties were diverse, the amount in controversy exceeded $75,000, and a single fund was at issue. However, the court found it “questionable whether Overcash constitutes a viable claimant…the record contains only Overcash’s unsworn April 2025 letter, the veracity of which the other evidence in the record seriously undermines.” Furthermore, “the record does not indicate what, if anything, MetLife did to investigate Overcash’s letter and/or the validity of Decedent’s designation of Cooper as his beneficiary.” Nevertheless, the court determined that the potential for future claims justified the interpleader. The court thus recommended that MetLife be (1) allowed to deposit the proceeds into the court’s registry, (2) dismissed from the action, and (3) discharged from further liability. However, the court denied MetLife’s request for a permanent injunction against further claims, as MetLife failed to demonstrate irreparable harm or satisfy the standards for injunctive relief. Furthermore, the court denied MetLife’s request for $3,686.36 in attorney’s fees and costs. The court based its decision on the fact that (1) “the record contains neither an explanation of MetLife’s delay in bringing the interpleader action nor an indication that MetLife sought to resolve this matter without litigation,” (2) “Overcash’s unsworn letter constitutes an incredibly slim reed upon which to disregard Decedent’s 2022 designation of Cooper as his beneficiary,” (3) “the evidence before the Court suggests that MetLife pursued this interpleader action largely for its own benefit, to secure protection from suit for its handling of Decedent’s life insurance policy,” (4) “the record establishes that this matter constitutes a routine aspect of Plaintiff’s business,” citing the “significantly ‘discounted rate’” it had negotiated for its representation, as well as “the formulaic nature” of its pleadings, and (5) “MetLife’s litigation strategies increased the cost of this litigation, as MetLife opted to employ process servers…at a cost of more than $700…rather than utilizing a ‘designated delivery service’…or certified mail to serve Defendants[.]” Finally, the court recommended realigning the parties with Cooper and Summersett as plaintiffs and Overcash as the defendant, and entering default against Overcash due to her failure to participate in the action.

Provider Claims

Second Circuit

Emsurgcare v. Hager, No. 25-1975-CV, __ F. App’x __, 2026 WL 1378672 (2d Cir. May 18, 2026) (Before Circuit Judges Nardini, Lee, and Robinson). This is an action by emergency medical providers Emsurgcare and Emergency Surgical Assistant (Emsurgcare) against one of their patients, Avery Hager, and Hager’s insurer, Oxford Health Plans (NY), Inc. and Oxford Health Insurance (Oxford). Emsurgcare sought to recover an unpaid balance on medical care it provided to Hager; Emsurgcare billed Oxford $103,500 for the services, but Oxford paid only $3,475. Emsurgcare sued Hager and Oxford in California state court, asserting breach of contract and account stated claims against Hager. Against Oxford, Emsurgcare alleged ERISA violations, tortious interference with contractual relations, and tortious interference with prospective economic advantage. The case was removed to federal court, where the Central District of California dismissed Emsurgcare’s claims against Hager, ruling that the practice of “balance billing” is illegal under California law, rendering the contract unenforceable. The remaining claims against Oxford were transferred to the Southern District of New York due to a forum selection clause. (Your ERISA Watch covered this ruling in our August 21, 2024 edition.)  In New York, Emsurgcare conceded that its tortious interference claims could not proceed, leaving only the ERISA claim against Oxford. The district court dismissed this claim because Emsurgcare failed to allege that it was a beneficiary or proper assignee of Hager’s health plan. (This decision was covered in our June 18, 2025 edition.) Emsurgcare appealed the dismissals of both Hager and Oxford to the Second Circuit, and this decision was the result. “On appeal, Emsurgcare surprisingly does not present any arguments explaining why the decisions of either district court were wrong on the merits. It essentially argues that both decisions cannot be right, and so at least one of them must be wrong. Specifically, Emsurgcare argues that if the California district court was correct that it cannot sue Hager, and the New York district court was correct that it cannot sue Oxford, then it is left in a Catch-22 where it cannot sue anyone. Such a situation is intolerable, it argues, and contravenes California law mandating that medical providers should have ‘recourse’ in disputes over a balance stemming from emergency medical services.” The Second Circuit was not convinced. It noted that Emsurgcare’s argument regarding its claims against Hager relied on a footnote from the California Supreme Court’s 2009 decision in Prospect Medical Group v. Northridge Emergency Medical Group, but that decision “express[ed] no opinion” on situations where providers have no recourse against health plans. The court characterized Emsurgcare’s arguments as “remarkably scant,” and stated that it “references none of the complicated California statutes that were analyzed in Prospect,” and “makes no effort to answer the question upon which the California Supreme Court offered ‘no opinion.’” As a result, the Second Circuit “discern[ed] no basis to disturb the dismissal of the claim against Hager.” As for the ERISA claim against Oxford, “Emsurgcare does not contend that the district court erred in dismissing it. We therefore deem that claim abandoned.” The rulings below were therefore affirmed.

Third Circuit

The Regents of the Univ. of Cal. v. Horizon Blue Cross Blue Shield of N.J., No. 2:24-CV-7482 (BRM)(CF), 2026 WL 1329562 (D.N.J. May 13, 2026) (Judge Brian R. Martinotti). This is an action by the University of California Irvine Medical Center (UCI) against Horizon Blue Cross Blue Shield of New Jersey alleging underpayment of benefits for three patients who were treated by UCI and were beneficiaries of health plans administered by Horizon. UCI originally filed the action in New Jersey state court, alleging claims for breach of implied contract and quantum meruit. These claims were based on two contracts with third-party insurers, Blue Shield of California and Anthem Blue Cross, which, like Horizon, were part of the nationwide Blue Card Program, and allegedly required UCI to treat Horizon’s beneficiaries and accept payment at specified rates. Horizon removed the case to federal court and then moved to dismiss the complaint because it was preempted by ERISA. In a May 27, 2025 order the court granted Horizon’s motion but gave UCI leave to amend. (Your ERISA Watch covered this ruling in our June 4, 2025 edition.) UCI amended its complaint, adding more information about the nature of the third-party contracts, and Horizon once again moved to dismiss. In this order the court once again found that UCI’s claims were preempted by ERISA, despite the new information, citing to ERISA’s “extraordinary pre-emptive power.” Even though UCI was not “standing in the shoes” of its patients pursuant to an assignment of benefits, the court ruled that its claims were still preempted because they were “premised on” an ERISA plan. UCI’s “claims [are] predicated on the plan,” the plan was “a critical factor in establishing liability,” and the claims “involve construction of the plan…or require interpreting the plan’s terms.” The court further determined that UCI failed to allege facts sufficient to establish an implied contract independent of the ERISA plans. The court noted that UCI’s only cited source of obligation was the Blue Card Program, but the program was a provision of the ERISA plans. Any claim based on the Program would therefore require construction of the plans, and be preempted. The court also found that UCI did not allege a long-standing relationship or specific representations by Horizon that would support an implied contract. “Indeed, the Amended Complaint is clear that Horizon was never contacted by the UCI Medical Center directly.” The court found it unfair to “ascribe an intent to be bound onto Horizon without some allegation that Horizon knew and approved of being bound by the representations of a third party.” Finally, the court dismissed UCI’s quantum meruit claim, stating that such a claim cannot coexist with a breach of contract theory, and furthermore, “an insurance company ‘derives no benefit’ from services provided to an insured for purposes of a quantum meruit claim.” As a result, the court once again dismissed UCI’s claims, again without prejudice.

Ninth Circuit

Women’s Recovery Ctr., LLC v. Anthem Blue Cross Life & Health Ins. Co., No. 8:20-CV-00102-JWH-ADS, 2026 WL 1288652 (C.D. Cal. May 7, 2026) (Judge John W. Holcomb). The plaintiffs in this case are a group of out-of-network substance use disorder treatment providers and clinical laboratories. They have filed a dozen actions, all consolidated here, against various health plan administrators, alleging that they provided medically necessary treatment and laboratory services to 1,691 individuals whose insurance was managed by the administrators, and that the administrators failed to pay or underpaid claims for the treatment and services. Defendants fired back with counterclaims, alleging that plaintiffs “engaged in an unlawful scheme…to defraud, interfere with, and undermine the [Counterclaimants] and the health plans they insure or administer,” thereby illegally enriching themselves to the tune of “millions of dollars.” Specifically, defendants alleged that plaintiffs submitted fraudulent claims, performed unnecessary medical services, and misrepresented billing records, among other activities. Defendants asserted claims for fraud, negligent misrepresentation, breach of contract as to non-ERISA plans, violation of unfair competition law, and equitable restitution under ERISA. Plaintiffs filed a motion to dismiss these counterclaims. Addressing ERISA preemption first, the court examined both express preemption and complete preemption arguments. The court found no express preemption because defendants’ state law claims “have only a ‘tenuous, remote, or peripheral connection with covered plans.’” The court acknowledged that “[a] determination of Counterclaimants’ obligations to pay will require a consultation with the Plans at issue. However, the counterclaims allege that Counterdefendants made fraudulent statements in the documents that they submitted to Counterclaimants. Those statements allegedly caused Counterclaimants to pay more than what was owed. Determining the veracity of those statements does not require significant interpretation of the ERISA plans. Therefore, the claims are not subject to conflict preemption under ERISA § 514(a).” As for complete preemption, the court applied the Ninth Circuit’s two-part test, derived from the Supreme Court’s ruling in Aetna Health Inc. v. Davila: “a state-law cause of action is completely preempted if (1) an individual…could have brought the claim under ERISA § 502(a)(1)(B), and (2) where there is no other independent legal duty that is implicated by a defendant’s actions.” The court jumped to the second prong first and stated that “the fraud and negligent misrepresentation state-law claims both involve violations of duties completely independent of ERISA.” The court ruled that the allegations regarding plaintiffs’ fraudulent activity and ordering of unnecessary treatment “would give rise to actionable claims resulting from a violation of a legal duty regardless of whether an ERISA plan was involved.” As a result, the court rejected plaintiffs’ argument that ERISA preempted defendants’ counterclaims. Regarding defendants’ claim for equitable relief pursuant to ERISA § 502(a)(3), the court dismissed the claim to the extent it sought the overpayment portion of a benefits distribution. Citing Ninth Circuit authority, the court ruled that “the overpayment is lacking in specificity because it is an undifferentiated component of a larger fund.” However, the court noted that defendants also sought payments “made…on the basis that the alleged misrepresentations rendered any payment improper under the terms of Counterclaimants’ Plan.” The court found that these claims could proceed “because the recovery sought is no longer an ‘undifferentiated component of a larger fund,’ but, rather, the entire payment.” The court further found that defendants had adequately alleged that the funds at issue were traceable to plaintiffs’ bank accounts. As for the remaining counterclaims, the court ruled that (1) the claims for fraud and negligent misrepresentation could continue because they provided sufficient details regarding the alleged fraudulent scheme; (2) defendants adequately pleaded a breach of contract claim because they alleged that plaintiffs, as assignees, were bound by the terms of the plans and breached them by waiving member responsibility amounts; and (3) defendants had standing under California’s Unfair Competition Law because they had a legally cognizable claim for the funds at issue. As a result, plaintiffs’ motion to dismiss was mostly a failure, and the court ordered them to file an answer to defendants’ counterclaims.

Retaliation Claims

Fourth Circuit

McClusky v. Allegis Grp. Inc., No. CV SAG-25-3891, 2026 WL 1378897 (D. Md. May 18, 2026) (Judge Stephanie A. Gallagher). Matthew McClusky worked for Allegis Group subsidiaries for approximately 20 years, most recently in Illinois as Director of Sales Operations for Actalent, Inc., Allegis’ engineering and sciences staffing company subsidiary. While at Allegis, McClusky participated in two ERISA-governed deferred compensation programs which included restrictive covenants such as 30-month non-compete and confidentiality provisions. In 2023, McClusky decided to relocate to Colorado to be closer to his family. He consulted with Allegis’ chief legal counsel about the restrictive covenants, who advised McClusky “that he would be ‘clean’ if he stayed away from the work he performed in Illinois or avoided engineering work altogether.” In Colorado McClusky started a new business, Industrial Talent Group, focusing on skilled trades staffing; this was an area handled by a different Allegis subsidiary (Aerotek, Inc.). Allegis initially paid McClusky $75,237 as the first installment of deferred compensation but later determined that he “had accessed internal documents and created a Colorado engineering market analysis while still employed, which the Committee deemed a confidentiality violation, and established Industrial Talent Group, which it found to be competitive activity.” As a result, Allegis terminated further payments, allegedly depriving him of more than $1.6 million, and indicated that it intended to recoup the first paid installment. McClusky filed this action, alleging two counts: wrongful denial of benefits, and retaliation in violation of ERISA’s anti-interference provision, 29 U.S.C. § 1140. McClusky’s retaliation claim was based on Allegis’ decision to recoup the initial payment. Allegis filed a motion to dismiss the retaliation claim. The court stated that McClusky’s claim “sounds in the standard for retaliation claims in an employment discrimination context and not ERISA’s distinct standard for interference with protected rights.” The court explained that “ERISA’s definition of interference requires specific prohibited conduct, which is ‘to discharge, fine, suspend, expel, discipline, or discriminate against a participant.’” The only possibility in this context was “discriminate,” but the court found that McClusky “has not alleged any facts to suggest discrimination, or that Plaintiff was treated differently from another similarly situated individual who had not exercised rights to which he was entitled under the [plans’] provisions.” Thus, McClusky “has not plausibly pleaded any facts that would suggest a plausible claim of discrimination in this context – that the recoupment occurred because he requested the review and not because he (in the Committee’s assessment, at least) had violated the restrictive covenants. Absent such facts, his § 1140 claim must be dismissed.” The dismissal was without prejudice.

Venue

Seventh Circuit

Braham v. Laboratory Corp. of Am. Holdings, No. 25 CV 15583, 2026 WL 1362509 (N.D. Ill. May 15, 2026) (Judge Jeffrey I. Cummings). The plaintiffs in this case are current or former employees of Laboratory Corporation of America Holdings (Labcorp). They were all participants in Labcorp’s Group Benefits Plan, which offered accident, critical illness, and hospital indemnity insurance. They allege that Labcorp and third-party advisor Willis Towers Watson, as fiduciaries of the plan, failed to exercise reasonable diligence in administering the plan, resulting in plaintiffs overpaying for insurance through excessive premiums. They claim Labcorp failed to select and monitor benefits offerings and providers diligently and did not ensure Willis Towers’ commissions were reasonable. Before the court here was defendants’ motion to transfer venue to the Middle District of North Carolina under 28 U.S.C. § 1404(a). The plaintiffs are residents of Illinois, North Carolina, Alabama, and Texas. Labcorp is based in Burlington, North Carolina, and while some of its employees are in Illinois, the majority work in North Carolina. Willis Towers is based in Virginia but has employees in both Illinois and North Carolina. The plan states that it is governed by North Carolina law. The court noted that the parties agreed that venue was proper in North Carolina, and thus it examined private and public interest factors to determine if transfer from Illinois to North Carolina was appropriate. On the private interest factors, the court ruled that (1) plaintiffs’ choice of forum was entitled to limited deference because the claims had weak ties to Illinois; only one of the four class representatives resided there, and it was a multi-state class action; (2) the situs of material events “strongly favored” transfer because the business decisions related to the plan were made in North Carolina; (3) the relative ease of access to sources of proof slightly favored transfer because most documents were located in North Carolina; (4) the convenience of the parties slightly favored transfer because evidence was required from Labcorp and Willis Towers employees, who were largely in North Carolina; and (5) the convenience of the witnesses favored transfer because key witnesses were located in North Carolina. On the public interest factors, the court found that (1) the court’s familiarity with the applicable law favored transfer because the plan was governed by North Carolina law, and the Middle District of North Carolina was more familiar with interpreting its own state’s laws; and (2) the desirability of resolving the controversy in North Carolina was more paramount because more putative class members resided in North Carolina, where Labcorp was headquartered, and the alleged unlawful activity took place there. As a result, “while there is no doubt that this Court could resolve the issues presented in this case, the Court finds in its discretion, taking both the private and public factors together, that defendants have made a sufficient showing warranting transfer of this case to the Middle District of North Carolina.” Defendants’ motion was thus granted.