Proprietary Fund Suit Class Might Not Be Eligible
A plaintiff seeking class action status in a proprietary fund suit against his former employer may have hit a snag.
The case is one brought by Marlon H. Cryer, individually and on behalf of a class of all other persons similarly situated, and on behalf of the Franklin Templeton 401(k) Retirement Plan. The suit, which had claimed that the plan invested in funds offered and managed by Franklin Templeton, when “better-performing and lower-cost funds were available.”
Now U.S. District Judge Claudia Wilken has opened the door (Cryer v. Franklin Resources, Inc.
, N.D. Cal., No. 4:16-cv-04265-CW, order for opposition to motion for reconsideration 8/8/17) for Franklin Templeton to formally seek reconsideration of her July 26 decision certifying the case as a class action, ordering the plaintiff to respond to Franklin Templeton’s primary rebuttal to the suit: a class action release signed by Cryer — after he left the firm.
Judge Wilken ordered that, “…on or before August 14, Plaintiff must file an opposition of no more than five pages. In particular, Plaintiff should address whether the class action release that he executed after his employment terminated is unenforceable under Morris v. Ernst & Young, LLP
, 834 F.3d 975, 979 (9th Cir. 2016), cert. granted
, 137 S. Ct. 809 (2017), or for any other reason.” Moreover, “on or before August 16, FRI may file a reply of no more than three pages.”
Franklin Templeton had argued that Judge Wilken was wrong to rely on the 9th Circuit’s 2016 decision in Morris v. Ernst & Young LLP
, a case in which the 9th Circuit joined the 7th Circuit in holding that class action waivers signed as a condition of employment are barred by the National Labor Relations Act. But since Cryer signed the agreement after he terminated his employment with Franklin, and not as a condition of his employment as was the case in Morris
, Franklin Templeton argued that it didn’t apply.
BloombergBNA notes the 5th and 8th Circuits have drawn different conclusions than have the 9th and 7th Circuits on this issue, and that the U.S. Supreme Court is slated to take up the issue on Oct. 2.