International Bancshares 401(k) Suit Kept Alive in Fifth Circuit

International Bancshares Corp. Tuesday failed to convince the Fifth Circuit to require arbitration in a dispute with a former worker challenging the conservative investment strategy in the Texas-based bank’s 401(k) plan.

The US Court of Appeals for the Fifth Circuit joined several other circuits in using the effective vindication doctrine to reject companies’ efforts to force Employee Retirement Income Security Act class actions into arbitration. The doctrine, which counsels against enforcing benefit plan terms that prevent participants from exercising their rights under the statute, has been relied upon by the Second, Third, Sixth, Seventh, Tenth, ...