House Committee Passes GOP Legislation That Seeks to Reduce ERISA Litigation

The U.S. House Committee on Education and the Workforce on Tuesday advanced legislation, on a 19-to-13 party-line vote, that would make it harder for workers and retirees to bring certain legal complaints against the management of employee-sponsored benefit plans, sharpening a partisan dispute over whether the Employee Retirement Income Security Act is being abused by plaintiffs’ lawyers. 

The proposal, the ERISA Litigation Reform Act, would raise the pleading standards required for some claims under ERISA to move forward. Republicans say the bill would deter speculative class action cases that force employers to settle costly cases even when they lack merit. Democrats counter that the measure could undermine the recent unanimous Supreme Court ruling in Cunningham v. Cornell that made it easier to reach discovery in complaints alleging a prohibited transaction under ERISA. 

Meanwhile, a recent ruling by the U.S. 4th Circuit Court of Appeals would make it more difficult for ERISA disputes concerning investment losses to receive class action status.  

The House Committee on the Judiciary will review the bill before it is considered by the full House of Representatives. 

Bill Focused on Litigation 

During Tuesday’s committee hearing, Representative Randy Fine, R-Florida—the bill’s sponsor—argued that companies offering retirement plans have faced a “growing wave of frivolous class action lawsuits” targeting ERISA plans. 

“Every dollar that’s spent defending against meritless claims is a dollar not invested in strengthening retirement plans or expanding employee benefits,” he said, describing what he called a “booming class action industry.” 

The bill focuses on the earliest stage of litigation, Fine said, introducing three changes intended to filter out weak cases before they become expensive legal battles. 

First, it would require plaintiffs alleging excessive fees in retirement plans—one of the most common ERISA claims—to demonstrate that the fees being paid in the plan were unreasonable, rather than forcing plan fiduciaries to prove they were justified. 

Second, it would tighten standards for lawsuits involving employee stock ownership plans, requiring claimants to plausibly allege that a plan paid more than fair value for company stock. 

Third, it would pause discovery—often the most costly stage of litigation—until courts rule on motions to dismiss. 

“These reforms reduce frivolous lawsuits while preserving strong protections for workers and retirees,” Fine said. “Meritorious claims proceed. Speculative claims do not.” 

Democrats on the committee, including Representative Joe Courtney, D-Connecticut, sharply disagreed, as they did in a separate hearing in December 2025, arguing the legislation would effectively overturn the Supreme Court’s Cunningham decision that broadened access to courts for ERISA plaintiffs. 

“The ink is barely dry,” Courtney said, referring to the Supreme Court decision. “This legislation is unbelievably premature.” 

He noted that some corporate defense lawyers, such as those at the law firm Mayer Brown, have reported no surge in lawsuits since the high court’s decision, undermining claims that the ruling unleashed a wave of frivolous cases. 

Representative Suzanne Bonamici, D-Oregon, echoed Courtney’s opposition, arguing that existing legal safeguards already deter meritless lawsuits and that class actions are often the only practical way workers can challenge wrongdoing. 

“It is very unrealistic to expect individuals to each find counsel and seek justice,” Bonamici said. “It’s expensive; it’s inefficient and unrealistic.” 

Effect on Health Plans 

Democrats also warned that the bill’s language could reach beyond retirement plans and affect employer-sponsored health plans, which cover more than 135 million Americans. 

During the markup, the committee rejected two Democratic amendments intended to narrow the bill’s scope and expand workers’ ability to sue for fiduciary misconduct. One proposal, by Courtney, sought to limit the legislation so it would not affect health plans governed by ERISA. 

Another, offered by Representative Robert Scott, D-Virginia—the committee’s top Democrat—would have strengthened participants’ ability to bring fiduciary breach claims before losses become irreversible. Scott argued that under current legal standards, some workers may not be able to challenge mismanagement until a retirement plan has already suffered significant losses. 

“You want to be able to protect the assets when you can clearly make a case,” he said. 

Republicans rejected those proposals, saying the bill is designed only to correct incentives that encourage costly settlements early in litigation.