Eleventh Circuit Joins Other Circuits and Eliminates Exhaustion Requirement for ERISA Fiduciary-Breach Claims

On October 13, 2026, the U.S. Court of Appeals for the Eleventh Circuit (sitting en banc) overruled its four-decade-old precedent in Mason v. Continental Group, Inc., 763 F.2d 1219 (11th Cir. 1985), and its progeny, which required participants to comply with their plan’s internal claims procedures before filing a lawsuit asserting breach of fiduciary duty or other statutory violations under ERISA. In Bolton v. Inland Fresh Seafood Corporation of America, Inc., No. 24-10084, 2026 WL 3056461 (11th Cir. Oct. 13, 2026), the Eleventh Circuit joined seven other circuits in holding that ERISA plaintiffs do not need to exhaust their administrative remedies before filing such suits. As explained below, while this is a notable procedural change within the Eleventh Circuit, it will likely not have a significant impact on ERISA class actions because the exhaustion defense had rarely been successful in defeating such lawsuits, and often simply delayed resolution of the cases.

Background

The “exhaustion” doctrine requires an ERISA participant to first go through the plan’s internal claims procedures—i.e., exhaust administrative remedies—before filing a lawsuit in court. Federal courts generally require ERISA plaintiffs to exhaust their administrative remedies before they assert a claim for benefits under the terms of their plans unless it would be futile to do so. ERISA’s statutory text, however, does not include an exhaustion requirement. Nonetheless, in Mason, the Eleventh Circuit held, for policy reasons, that the judicially created exhaustion requirement also extended to statutory claims, including breach of fiduciary duty and prohibited transaction claims. That precedent allowed ERISA defendants in the Eleventh Circuit to initially seek dismissal of statutory and fiduciary breach claims if the plaintiffs had not gone through their plan’s claims process before suing.

In contrast to the Eleventh Circuit’s approach, seven other U.S. Courts of Appeals (the Third, Fourth, Fifth, Sixth, Ninth, Tenth, and DC Circuits) have held that ERISA plaintiffs are not required to exhaust their administrative remedies before bringing such claims, and instead limit exhaustion to claims for benefits.¹

In Bolton, participants in an employee stock ownership plan (“ESOP”) challenged the ESOP’s purchase of the company’s outstanding stock. Specifically, the participants alleged that the ESOP overpaid for the company’s shares and that the ESOP trustee had breached its fiduciary duties by failing to perform the proper due diligence required to value the company’s shares appropriately. The participants did not exhaust their administrative remedies before filing their lawsuit asserting claims under ERISA Sections 502(a)(2) and (a)(3).

The district court applied Mason and dismissed the lawsuit for failure to exhaust. In October 2025, an Eleventh Circuit panel affirmed, holding it was bound by Mason. However, two of the panel judges wrote separately urging the full Eleventh Circuit to rehear the case and overrule Mason.

En Banc Ruling

The full Eleventh Circuit overruled Mason’s exhaustion requirement with respect to statutory claims. It reasoned that the rule was “an atextual product of judicial creation based solely on policy reasons” that “has not withstood the test of time as most of our sister circuits have come to a contrary conclusion.” Bolton, 2026 WL 3056461, at *2. The court stressed that ERISA itself does not require exhaustion, and that courts should not impose requirements Congress did not include in the statute. Although the defendants argued that the court should exercise its judicial discretion and uphold the exhaustion requirement, the court declined to do so. It explained that ERISA provides for “ready access to the Federal courts,” and that an exhaustion requirement delays that access. In addition, the court acknowledged the potential conflict of interest when a plan fiduciary is asked, through the plan’s claims procedures, to review a claim alleging that the fiduciary engaged in wrongdoing.

Importantly, the court refused to limit its ruling to future cases, finding “no reason” the rule should not apply retroactively. Instead, it applied its ruling—and its elimination of the exhaustion requirement—immediately to the parties in Bolton, reversing the district court’s dismissal. Thus, Bolton also applies to other pending cases in the Eleventh Circuit where the defense has been raised.

Notably, the court did not address whether a plan provision requiring exhaustion of statutory claims would be enforceable, because the ESOP’s claims procedures were optional. And the court was unwilling to evaluate the exhaustion requirement in the ESOP’s arbitration clause because neither party had moved to compel arbitration.

The court also did not disturb its prior precedent and requirement that participants exhaust their administrative remedies before filing a lawsuit for plan benefits under ERISA Section 502(a)(1)(B).

Considerations for Plan Sponsors and Fiduciaries

While noteworthy, the Eleventh Circuit’s ruling is not a surprise to those who have been following the Bolton litigation and ultimately may not have a material impact on ERISA class actions in the Eleventh Circuit. Although failure to exhaust was often raised in motions to dismiss in the Eleventh Circuit, it seldom resulted in a dismissal, particularly in defined contribution plan class actions challenging fees or plan investments. Initial dismissals for failure to exhaust were often without prejudice, or courts simply stayed the lawsuits while the plaintiffs completed the plan’s claims procedures. Because plan fiduciaries would typically reject the premise that they had breached their fiduciary duties or engaged in other statutory violations, the dispute would end up in court again on the same or similar allegations, and district courts have often refused to limit discovery to the administrative record. As a result, the defense often delayed or extended the litigation, with both sides incurring additional legal fees and costs.

Moreover, the Eleventh Circuit’s ruling in Bolton addresses only when district courts may review fiduciary breach and other statutory claims, not whether those claims have any merit. The court emphasized that its ruling does not expand fiduciary liability under ERISA. Plan sponsors and fiduciaries should therefore view Bolton as affecting litigation procedure in the Eleventh Circuit, not their substantive fiduciary obligations or potential liability.

As noted above, the Eleventh Circuit in Bolton did not address the enforceability of plan exhaustion requirements for fiduciary breach or other statutory claims. The court observed, however, that the U.S. Department of Labor has taken the position that such plan-imposed requirements would be subject to significant judicial scrutiny and that plans should not be able to contract away participants’ statutory rights under ERISA. Accordingly, plan sponsors considering adding exhaustion requirements to their plans (or those with existing requirements) should consult with their ERISA counsel to evaluate the enforceability of such requirements, and whether they may provide a valid defense in a future lawsuit.

In light of Bolton, plan sponsors and fiduciaries in the Eleventh Circuit should consider reviewing their plans’ claims procedures, exhaustion requirements, and arbitration provisions, with the recognition that such provisions are likely to face scrutiny if raised as a legal defense. They should also continue to maintain robust claims and appeals procedures for benefit claims, which remain subject to exhaustion.

¹ The Seventh Circuit permits, but does not mandate, exhaustion of ERISA statutory claims, leaving the matter to the trial court’s discretion. See Lindemann v. Mobil Oil Corp., 79 F.3d 647, 650 (7th Cir. 1996). In practice, Seventh Circuit district courts rarely require exhaustion of such claims.