Cooper v. Ruane Cunniff & Goldfarb Inc., 990 F.3d 173

Background

Cooper worked for DST and was enrolled in the employer-sponsored profit-sharing account (PSA) covered by ERISA; DST retained Ruane as the PSA investment manager and Ruane acted as a Plan fiduciary.
The PSA suffered massive losses after an overconcentration in Valeant stock; Cooper sued Ruane under ERISA § 502(a)(2) for breach of fiduciary duty on behalf of the Plan.
Cooper had signed DST’s Arbitration Agreement requiring arbitration of “all legal claims arising out of or relating to employment,” with an express carve-out for ERISA-related benefits claims (§ 502(a)(1)); the Agreement barred joinder and class/representative actions.
The investment management agreements between DST and Ruane contained no arbitration clause; Ruane is a non‑signatory to Cooper’s Arbitration Agreement with DST.
The district court compelled arbitration and permitted Ruane to seek arbitration via equitable estoppel; the Second Circuit majority reversed, holding Cooper’s § 502(a)(2) fiduciary‑breach claims do not “relate to” his employment for purposes of the Agreement.
The majority emphasized that the merits of Cooper’s claims turn on Ruane’s investment decisions (not facts about Cooper’s employment), and that forcing arbitration would conflict with ERISA’s representative‑adequacy protections (Coan). A dissent would have applied the presumption in favor of arbitration and affirmed.

Issues

Issue	Cooper's Argument	Ruane's Argument	Held
Whether the Arbitration Agreement’s phrase “relating to employment” covers ERISA § 502(a)(2) fiduciary‑breach claims	Not covered — merits do not depend on facts particular to Cooper’s employment; claims are plan‑focused and could be brought by non‑employees	Covered — PSA is part of compensation; the clause is broad and includes statutory claims; silence on fiduciary claims implies inclusion	Held: Not covered. The merits do not involve facts particular to Cooper’s employment, so the clause does not encompass § 502(a)(2) fiduciary claims.
Whether a non‑signatory (Ruane) may compel arbitration via equitable estoppel	Opposes — no clear consent to arbitrate with non‑signatory; relationship insufficient to estop	Argues estoppel appropriate because claims overlap with DST and parties treated DST and Ruane together; issues intertwined	Not reached by majority (district court had allowed estoppel; dissent would have affirmed estoppel).
Whether enforcing arbitration would conflict with ERISA’s representative adequacy (Coan) and the Agreement’s class/representative waiver	Arbitration would undermine ERISA’s representative safeguards because Agreement forbids joinder/class arbitration	Arbitration still appropriate; carve‑out covers only benefit claims (§ 502(a)(1)), not fiduciary claims (§ 502(a)(2))	Held: Reading clause to include § 502(a)(2) would create tension with Coan and risk undercutting ERISA’s purposes; that counsels against construing clause broadly here.

Key Cases Cited

Coan v. Kaufman, 457 F.3d 250 (2d Cir. 2006) (ERISA § 502(a)(2) representative‑adequacy requirement)
United States ex rel. Welch v. My Left Foot Children’s Therapy, LLC, 871 F.3d 791 (9th Cir. 2017) (employment arbitration clause did not cover FCA claim absent facts tied to employment)
Ross v. American Express Co., 547 F.3d 137 (2d Cir. 2008) (doctrine of equitable estoppel permitting non‑signatory to invoke arbitration in certain circumstances)
Holick v. Cellular Sales of N.Y., LLC, 802 F.3d 391 (2d Cir. 2015) (standard for motion to compel arbitration; scope inquiry)
Jones v. Halliburton Co., 583 F.3d 228 (5th Cir. 2009) (limits on "relate to" in employment arbitration context)
Doe v. Princess Cruise Lines, Ltd., 657 F.3d 1204 (11th Cir. 2011) ("related to" requires direct relationship; not limitless)
Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287 (2010) (arbitration only where parties agreed)
Varity Corp. v. Howe, 516 U.S. 489 (1996) (definition of ERISA fiduciary duties)
LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248 (2008) (relief under ERISA § 409 limited to plan losses)
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (presumption in favor of arbitration)
American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (2013) (arbitration cannot forbid assertion of certain statutory rights)