Federal Court of Appeals Determines that ERISA?ÇÖs Six-Year Statute of Repose May Be Expressly Waived
In a case of first impression for a federal appellate court, the U.S. Court of Appeals for the Eleventh Circuit held that a fiduciary may affirmatively waive any defenses based on the six-year statute of repose in Section 413 of ERISA. In this case, the U.S. Secretary of Labor brought an action against the company and its owner/CEO who was also the trustee of the company?ÇÖs employee stock ownership plan (?Ç£ESOP?Ç¥), claiming that the owner engaged in prohibited self-dealing by causing the plan to purchase company stock at inflated prices. While attempting to negotiate a settlement, the?áSecretary of Labor agreed to delay filing suit in exchange for the defendants executing a series of tolling agreements, in which they agreed they would ?Ç£not assert in any manner the defense of statute of limitations, the doctrine of waiver, laches, or estoppel, or any other matter constituting an avoidance of the Secretary?ÇÖs claims that is based on the time within which the Secretary commenced such action.?Ç¥
Settlement negotiations failed, and after the Secretary filed suit, the owner immediately moved to dismiss the claims based on the statute of repose in Section 413 of ERISA. The district court agreed and dismissed the case, but on appeal the Eleventh Circuit Court of Appeals reversed, explaining that ERISA?ÇÖs statute of repose is not jurisdictional, and statutes of repose are generally subject to express waiver.