A Touch of Grey—ERISA Remains a Complex and Evolving Statute After 40 Years

By Joseph A. Garofolo

To celebrate ERISA’s 40th anniversary and for EES’s inaugural blog, here are 10 observations relating to the landmark statute:

1.  ERISA was signed into law by President Gerald Ford on September 2, 1974, but most of its provisions took effect on January 1, 1975.  After coming out of conference committee, the House of Representatives passed ERISA by a vote of 407-2 on August 20, 1974.

2.  As originally enacted, ERISA § 502 set forth six civil statutory causes of action.  See ERISA §§ 502(a)(1)-(6).  As amended, ERISA currently provides for ten civil statutory causes of action.  See ERISA §§ 502(a)(1)-(10).

3.  The Secretary of Labor has been a party to a number of seminal cases that contributed to the development of ERISA jurisprudence.  See, e.g., Cutaiar v. Marshall, 590 F.2d 523 (3d Cir. 1979); Donovan v. Bierwirth, 680 F.2d 263 (2d Cir. 1982); Donovan v. Mazzola, 716 F.2d 1226 (9th Cir. 1983); Donovan v. Cunningham, 716 F.2d 1455 (5th Cir. 1983).

4.  The Fifth Circuit has recognized that “a pure heart and empty head” are not enough to satisfy ERISA’s fiduciary duties.  Donovan v. Cunningham, 716 F.2d 1455, 1467 (5th Cir. 1983).

5.  According to the Fifth Circuit, ERISA’s prudence standard does not require a fiduciary to conduct himself or herself as a prudent expert: “Some commentators have suggested that the reference in Section 404 to a prudent man ‘familiar with such matters’ creates a ‘prudent expert’ standard under ERISA. . . . However, a review of the relevant history of Section 404 does not support this view; rather, it confirms that the emphasis of Section 404 is on flexibility.”  Donovan v. Cunningham, 715 F.2d 1455, 1467 n.26 (5th Cir. 1983) (citations omitted).

6.  In Donovan v. Bierwirth, the Second Circuit explained that a fiduciary’s decisions “must be made with an eye single to the interests of participants and beneficiaries.”  680 F.2d 263, 271 (2d Cir. 1982) (citations omitted).

7.  The Ninth Circuit has observed that ERISA’s prudence standard is derived from the common law of trusts, but that it must be interpreted “bearing in mind the special nature and purpose of employee benefit plans.”  Donovan v. Mazzola, 716 F.2d 1226, 1231 (9th Cir. 1983).

8.  The Supreme Court has described ERISA’s preemption clause as “conspicuous for its breadth,”  FMC Corp. v. Holliday, 498 U.S. 52, 58 (1990), and the Ninth Circuit has noted that “ERISA contains one of the broadest preemption clauses ever enacted by Congress.”  PM Group Life Ins. v. W. Growers Assur. Trust, 953 F.2d 543, 545 (9th Cir. 1992).

9.  Health and welfare plans covered by ERISA are not exempt from its fiduciary duty provisions.

10.  Since ERISA was enacted, there have been 14 Secretaries of Labor (not including Acting Secretaries): Peter J. Brennan (1973-1975/Nixon); John T. Dunlop (1975-76/Ford); W.J. Usery, Jr. (1976-77/Ford); Ray Marshall (1977-81/Carter); Raymond J. Donovan (1981-85/Reagan); William E. Brock (1985-87/Reagan); Ann Dore McLaughlin (1987-89/Reagan); Elizabeth Hanford Dole (1989-90/Bush); Lynn Morley Martin (1991-93/Bush); Robert B. Reich (1993-97/Clinton); Alexis M. Herman (1997-01/Clinton); Elaine L. Chao (2001-09/Bush); Hilda L. Solis (2009-13/Obama); and Thomas Perez (2013-present/Obama).