Subtlety of the “Fiduciary Exception” Doctrine

July 3, 2007

Under the “fiduciary exception” doctrine, beneficiaries may sometimes obtain access to communications between their fiduciary and the fiduciary’s lawyer. This doctrine has been applied to situations involving shareholders, union members, trust beneficiaries, etc.

Most of the “fiduciary exception” case law involves ERISA beneficiaries seeking access to communications (about the plan’s administration) between the ERISA plan administrator and the administrator’s lawyer. However, the doctrine is more subtle than many lawyers realize. In Marsh v. Marsh Supermarkets, Inc., No. 1:06-cv-JDT-TAB, 2007 U.S. Dist. LEXIS 28039 (S.D. Ind. Mar. 29, 2007), a terminated executive filed an ERISA suit seeking several years of severance pay. The former executive sought access to communications between the company and its lawyer, relying on the “fiduciary exception” doctrine. However, the court noted that the executive had been covered by a so-called “Top Hat” plan, which the court described as a “‘unique animal[]'” under ERISA. Id. at *6 (citation omitted). Because “Top Hat” plans are outside ERISA’s normal fiduciary requirements, the fiduciary exception did not apply.

Lawyers should not assume that every ERISA lawsuit triggers application of the “fiduciary exception” doctrine.