Trump’s Pick for Top Benefits Cop Viewed as Plaintiffs’ Bar Foe

President Donald Trump‘s nominee to lead the government’s private-sector benefits enforcer is a fierce critic of “frivolous” class-action litigation against employers, and he wants regulators to take a side by reining in the plaintiffs’ bar.

Management liability insurance executive Daniel Aronowitz has been selected to head up the US Labor Department’s Employee Benefits Security Administration, according to a White House document obtained by Bloomberg Law. If confirmed by the Senate, he would take charge of an agency overseeing millions of workplace health, retirement, and welfare plans covering nearly 153 million employees.

Aronowitz has made his career insuring plan administrators against legal threats filed by workers and retirees. That could come in use as the Trump administration charts a new, unconventional course for EBSA to serve as a regulatory backstop in the courts, protecting businesses against threats from the inside, benefits attorneys and industry leaders told Bloomberg Law.

“I hope his nomination indicates a shift in thinking that the DOL is the appropriate body to police these programs and assist in reining in some of the more problematic actions that are simply encouraging employers to avoid certain benefits,” said Allison Wilkerson, a partner representing employee benefit plans at McDermott Will & Emery LLP in Dallas.

The number of class actions charging employers with violating strict fiduciary conduct standards under federal benefits law has snowballed over the last decade, reaching an all-time post-pandemic high in 2020 and remaining elevated ever since. Recent novel legal strategies advanced by trial attorneys have targeted companies for the way they use plan forfeitures, allegedly risky pension de-risking, and supposedly excessive fees paid by health and retirement plan sponsors.

Regulators have struck a largely impartial stance on rising private-sector litigation, despite calls from the regulated community to “take seriously the existential threat that these class-action lawsuits represent,” said Michael Hadley, a partner at Davis & Harman LLP who lobbies on behalf of plan sponsor industry groups, insurance companies, and major institutional asset managers.

“We desperately need their help to get the courts to enforce appropriate pleading standards and reduce the pressure on plan sponsors to settle and pay off the class action lawyers,” Hadley said. “What the Trump administration is saying with this pick is that the era of class-action abuse is coming to an end.”

Unusual Background

Aronowitz’s insurance background is a departure from recent EBSA chief resumes, which have been filled almost exclusively with substantial Washington experience or direct involvement in employee benefit plan operations.

Despite a short stint representing insurance companies for an Am-Law 100 firm, Aronowitz has spent most of his career carving out a niche market uniquely focused on the Employee Retirement Income Security Act. He currently serves as president of ENCORE Fiduciary, a Virginia-based insurer specializing in ERISA fiduciary liability insurance.

Colleagues say his background has shaped him into a proud advocate for plan sponsors who feel isolated against growing legal threats. Among a pool of tight-lipped, white-shoe firm partners and lobbyists usually nominated for the top spot at EBSA, Aronowitz’s experience has made him an uncharacteristically outspoken critic of the plaintiffs’ bar in routine blog posts and court filings.

“The Department of Labor is missing in action,” he wrote in a post on his “Fid Guru” blog in September. “By not focusing on the key issues where they actually have legislative authority, they are allowing plaintiff lawyers to regulate the key fiduciary duties for retirement and health plans in America. With the DOL abdicating its role to regulate the fiduciary standard of care for ERISA-covered plans, we are at the mercy of profit-seeking plaintiff lawyers.”

That approach would better recognize EBSA’s authority that it can act as an arbiter in private-sector disputes, said Brad Campbell, a partner at Faegre Drinker Biddle & Reath LLP who served as the nation’s top benefits regulator at EBSA under former President George W. Bush.

EBSA has substantial leeway to pull regulatory controls that would more clearly outline fiduciary responsibilities and lay out a defense plans can use to protect themselves, Campbell said. A more robust amicus program could also aid courts in determining what normal plan operations look like.

In addition to the blog post, Aronowitz penned a US Supreme Court amicus brief urging the justices to establish clearer pleading standards in a case examining the ease with which private-sector plaintiffs can bring lawsuits.

Concerns Over Pick

Aronowitz’s background also gives some attorneys for multiemployer plans pause, given the rifts that exist between employers and third-party administrators like insurance companies. Aronowitz entered the plan benefits insurance world by specializing in multiemployer, government, and union-brokered plans, said John Colis, president of Euclid Program Managers, the managing general agency that helped Aronowitz set up his first fiduciary liability insurance company in 2011.

Plaintiffs’ firms are concerned that Aronowitz would exclusively shield corporate interests to the detriment of plan participants and beneficiaries the agency is designed to protect. He declined to comment directly on his nomination pending Senate confirmation.

“ERISA stands for the Employee Retirement Income Security Act,” said Cassie Springer Ayeni, who represents plaintiffs in ERISA benefits challenges as president of Springer Ayeni. “It’s in the preamble that it’s designed to protect employees and employee benefits, not employers.”

Aronowitz has used his blog to level attacks against trial lawyers as “copycat minions” of well-known plaintiffs’ attorney Jerome Schlichter, who pioneered a successful series of retirement fees lawsuits. He’s argued that excessive litigation has chilled new plan adoption and stifled innovation.

EBSA’s leader during the Biden administration, Lisa M. Gomez, said she understands Aronowitz’s focus on protecting plans, but hopes he will be open-minded.

“There are definitely, many, many true examples of where things are going wrong and where participants need to be protected,” she said.