Plan Sponsors Seek Review of Standard for Assessing Validity of ERISA Releases

Plan sponsor Atmel Corporation and its successor Microchip Technology Incorporated (petitioners) filed a petition for a writ of certiorari on October 23, 2025, asking the Supreme Court to review a Ninth Circuit decision setting forth a standard for assessing the validity of releases of ERISA claims that the petitioners assert "finds no footing in ERISA's text, public policy, or common sense." Microchip Technology Inc., et al. v. Peter Schuman and William Coplin, No. 25-514 (U.S). 

The case was brought by former employees of Atmel who, prior to filing suit, claimed they were entitled to benefits under an ERISA plan Atmel adopted before being acquired by Microchip. According to the petition, Microchip disagreed with the former employees' interpretation of the plan and asserted no benefits were available to them. Microchip and the former employees entered into a settlement agreement to resolve the dispute, which the petition states provided for payment of 50 percent of the benefits claimed in exchange for a release of the asserted ERISA claims. After entering into that agreement, the former employees filed the underlying ERISA lawsuit alleging Microchip breached its ERISA fiduciary duties by misinterpreting the plan to deny them benefits, rendering the release they signed unenforceable. The district court, relying on the Second Circuit's "totality of the circumstances" test for assessing the validity of an ERISA release, rejected the former employees' position, holding that the alleged fiduciary breach asserted against petitioners did not prevent the release from being knowing and voluntary. 

On appeal, the Ninth Circuit vacated the district court's determination, holding that the alleged fiduciary breach should be given "serious consideration" and "may weigh particularly heavily against finding that the release was 'knowing' or 'voluntary.'" In doing so, the court purported to join the "approach" adopted by the Seventh and Eighth Circuits, which considers as one factor whether a release was induced by improper conduct. The petitioners argue that no provision in ERISA mandates a special rule for ERISA releases and that "the Ninth Circuit's judge-made rule... squarely implicates a circuit conflict regarding the proper standard for enforcing ERISA releases." They further argue the rule adopted by the Ninth Circuit undermines the utility of releases in providing for prompt resolution of ERISA claims, prejudices parties that count on the finality of releases, and burdens courts forced to litigate claims that have already been released.

Supreme Court Asked to Review Whether ERISA Preempts a State Unjust Enrichment Claim

UnitedHealthcare Insurance Company and several of its affiliates (United or the petitioners) filed a petition for a writ of certiorari on October 10, 2025, in UnitedHealthcare Insurance Company, et al. v. Fremont Emergency Services, et al., No. 25-452, seeking review of a Nevada Supreme Court holding that a state common law unjust enrichment claim based on United's alleged underpayments to out-of-network providers is not preempted by ERISA. The petitioners present the issue before the Court as whether ERISA preempts such a state law claim when "any duty on United's part to make [the out-of-network payments] derives entirely from United's duties to the plan and its members pursuant to the plan's specific terms." 

The respondents, medical groups affiliated with TeamHealth Holdings, Inc. (TeamHealth), brought several state law claims against United, including unjust enrichment based on alleged underpayments for benefits discharged to United's plan members. The allegations focused on 11,563 emergency medicine claims from out-of-network providers totaling $13.34 million in billed charges, which resulted in reimbursements to members totaling $2.84 million in accordance with plan terms. United raised an ERISA preemption defense to the claims, but a jury found United liable for unjust enrichment, among other claims, and awarded the providers $2.65 million for the alleged underpayments. On appeal, the Nevada Supreme Court rejected United's argument that ERISA preempts the unjust enrichment claim, reasoning that the claim is "based on costs alone" and did "not impact plan administration." In doing so, the court relied on New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Insurance Company, 514 U.S. 645 (1995), and Rutledge v. Pharmaceutical Care Management Association, 592 U.S. 80 (2020), as support for its holding.  

The petitioners contend that the Nevada Supreme Court erred in applying Travelers and Rutledge and their legal argument rests on both "reference to" and "connection with" ERISA preemption. As to "reference to" preemption, the petitioners cite Gobeille v. Liberty Mutual Insurance Company, 577 U.S. 312, 320 (2016), and argue that the unjust enrichment claim "is necessarily premised on United's duty to the plans to pay, on the plans' behalf, for care provided to plan members" and "seeks to alter that duty by requiring United to pay more for such care than the plan itself authorizes" (emphasis in original). The petitioners also advance "connection with" preemption, citing Gobeille and Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983), to argue, among other things, that "[a]n unjust enrichment claim in this context seeks to override the plan's payment terms by allowing a state court to determine what reimbursement rate is required under state law, which may—and usually does, as in this case—require the administrator to pay for out-of-network services at rates higher than the plan-specified rate" (emphasis in original). 

The petition references a "sharp[] divide[]" between federal circuit and district courts on the question presented, with the Second, Third, and Fifth Circuits finding in favor of ERISA preemption and federal district courts deciding both ways on the question. The petitioners point to this divide as evidencing "broader confusion among courts regarding the scope of the rule applied by [the Supreme Court] in Travelers and Rutledge that § 514 does not preempt generally applicable state laws with only incidental effects on plan costs."

Second Petition for Writ of Certiorari Filed Addressing Meaningful Benchmark Pleading Standard

On October 20, 2025, the plaintiffs in Anderson, et al., v. Intel Corporation Investment Policy Committee, et al., No. 25-498 (U.S.), filed a petition for a writ of certiorari in the Supreme Court seeking review of a Ninth Circuit decision affirming dismissal of ERISA breach of fiduciary duty claims based on investment fund underperformance due to a failure by the plaintiffs to plead a "meaningful benchmark." The original consolidated actions filed in 2015 and 2019 alleged that the defendants violated ERISA's duties of prudence and loyalty by causing two Intel defined contribution plans to invest "large allocations" of some of the plans' assets in hedge funds and private equity funds, while more traditional investment options could have provided higher returns with lower fees.

In their petition, the petitioners challenge "whether, for claims predicated on fund underperformance, pleading that an ERISA fiduciary failed to use the requisite care, skill, prudence, or diligence under the circumstances and thus breached ERISA's duty of prudence when investing plan assets requires alleging a meaningful benchmark." They argue that the Ninth Circuit's approach requiring identification in a complaint of a meaningful benchmark "has no basis in [ERISA], contravenes [the Supreme] Court's precedent, and immunizes fiduciaries from liability where they engage in reckless investment decisionmaking." 

The petitioners reference another pending petition for a writ of certiorari in Parker-Hannifin Corp. v. Johnson, No. 24-1030 (March 26, 2025), which seeks review of a Sixth Circuit decision that rejected the meaningful benchmark pleading standard for an imprudence claim based on underperformance of a plan investment. They assert that because their petition "presents a similar question to the one in Parker-Hannifin, it should be held pending the disposition of the petition in Parker-Hannifin." They further assert that if the Court denies certiorari in Parker-Hannifin, it should grant plenary review in Anderson. The petitioners also note that the Supreme Court requested the views of the Solicitor General in Parker-Hannifin on this important pleading question. No government brief has been filed to date.

Upcoming Speaking Engagements

Joanne will speak at the American Benefits Council Policy Board of Directors Meeting on November 4, 2025, as a part of the panel, "The Regulatory Outlook: A Catch-Up with Agency Experts."

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