The U.S. Court of Appeals for the Second Circuit issued a mixed ruling Tuesday in *Duke v. Luxottica U.S. Holdings Corp.*, a class action lawsuit challenging the eyewear giant's pension plan calculations under the Employee Retirement Income Security Act (ERISA). The court affirmed in part and reversed in part the district court's decision, addressing complex questions about arbitration, standing, and remedies in ERISA litigation.
Janet Duke filed the lawsuit on behalf of herself and other participants in Luxottica's defined benefit retirement plan, alleging that the plan systematically violated ERISA by using outdated actuarial assumptions when calculating benefits. The case, argued on Jan. 13, 2026, and decided Feb. 5, 2026, involved multiple defendants including Luxottica U.S. Holdings Corp., Oakley Inc., the Luxottica Group ERISA Plans Compliance and Investment Committee, and the Luxottica Group Pension Plan.
The plaintiff pursued two separate legal theories under ERISA's remedial provisions. First, she sought relief on behalf of the plan itself through a Section 502(a)(2) representative action, requesting both plan reformation and monetary repayment to the plan. Second, she pursued relief for herself and other individual participants under Section 502(a)(3).
The case became complicated when an arbitration agreement between Duke and her former employer came into play. The U.S. District Court for the Eastern District of New York had compelled individual arbitration of the Section 502(a)(3) claim, effectively splitting the case between court and arbitration proceedings.
In its decision, the Second Circuit panel, consisting of Circuit Judges Robinson, Nathan, and Kahn, made several key rulings on the scope of Duke's claims and the arbitration issues. The court held that Duke has standing to seek plan reformation on behalf of the plan under Section 502(a)(2), but lacks standing to pursue monetary payments to the plan under the same provision.
The appeals court addressed the tension between mandatory arbitration clauses and ERISA class actions, ruling that the effective vindication doctrine precludes mandatory arbitration of Duke's Section 502(a)(2) claim for plan reformation. This doctrine prevents enforcement of arbitration agreements when doing so would effectively prevent a party from vindicating their statutory rights.
The court also affirmed the district court's denial of a motion for a mandatory stay of litigation, allowing the case to proceed in federal court rather than being put on hold pending arbitration of related claims.
Notably, the Second Circuit panel explicitly stated that given the procedural posture of the appeal, it would not consider whether the plan reformation Duke seeks is actually available as a remedy under Section 502(a)(2). This leaves open the substantive question of what remedies are ultimately available to the plaintiff and class members.
The case highlights ongoing tensions in ERISA litigation between individual arbitration agreements and class-wide relief for plan participants. Employers increasingly include arbitration clauses in employment agreements and plan documents, potentially limiting workers' ability to pursue collective action for systematic plan violations.
Pension plan participants often face challenges when plans allegedly use outdated actuarial assumptions, which can systematically undervalue benefits owed to retirees. Actuarial assumptions about factors like life expectancy, interest rates, and mortality tables directly impact benefit calculations in defined benefit plans.
The ruling could have broader implications for how courts handle mixed ERISA claims involving both individual relief and plan-wide remedies when arbitration agreements are present. The Second Circuit's application of the effective vindication doctrine may provide a pathway for some class action claims to proceed in federal court despite arbitration clauses.
Luxottica, known for brands including Ray-Ban and Oakley, operates one of the world's largest eyewear companies. The company's pension plan covers numerous employees and retirees whose benefits could be affected by the actuarial calculation methods at issue in the case.
The case originated in the Eastern District of New York under Judge Choudhury before being appealed to the Second Circuit. The mixed ruling means some aspects of the litigation will continue in federal court while others may proceed to arbitration.
Legal representation in the case includes attorneys from Stris & Maher LLP, with Rachana Pathak, Peter K. Stris, and Jeff Hahn representing the plaintiff class.
The decision underscores the complexity of modern ERISA litigation, where plan participants must navigate not only substantive benefit calculation issues but also procedural hurdles including arbitration clauses and standing requirements for different types of relief under federal law.