International Bancshares Corporation is the sponsor of a tax-deferred defined contribution retirement savings plan. The IBC Profit Sharing Plan Committee is the named administrator and fiduciary. An IBC subsidiary, International Bank of Commerce, controls investment of Plan assets. The plaintiff, Paul Parrott, worked at an IBC bank until 2021 and was a Plan participant. He alleges that IBC, the Committee, and International Bank of Commerce breached their fiduciary include an arbitration clause, which was made retroactive to January 1, 2024. Parrott had already received his distribution before January 1, 2024, and was no longer employed by IBC.

The district court denied Defendants’ motion to compel arbitration, finding that there was no consideration under Texas law for the amended arbitration agreement.

Initially, the Fifth Circuit finds that it is the Plan’s consent, not the suing Participant’s, which controls: “Section 1132(a)(2) states that a civil action may be brought “by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title,” which provides that a plan fiduciary who violates its fiduciary duties “shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary.” ….  Parrott cites no authority for his theory that the litigant’s consent is important because the statutory right to bring the claim is bestowed on the litigant. It is the consent of the Plan that is relevant.”

At the same time, however:

“IBC violated the effective vindication doctrine with its arbitration provisions. The anti-representative-action clause states that ‘all Covered Claims must be brought solely in the Arbitration Claimant’s individual capacity and not in a representative capacity or on a class, collective, or group basis. That requirement is facially at odds with the statutory text of § 1109 and the remedy it provides…. Although LaRue v. DeWolff, 552 U.S. 248 (2008) may stand for the proposition that there can be plan injuries to individual accounts, it does nothing to undermine the principle that such suits are still brought on behalf of the plan and thus in a representative capacity. To that effect, LaRue states that § 1132(a)(2) ‘authorizes the Secretary of Labor as well as plan participants, beneficiaries, and fiduciaries, to bring actions on behalf of a plan.’ Because § 1132(a)(2) suits, by definition, must be brought in a representative capacity and plan participants are entitled to bring suit to recover all losses and profits, the anti-representative-action clause and remedy limitation are violative of the effective vindication doctrine.”

 

Parrott v. International Bancshares Corporation, No.25-50367, 2026 WL 364324 (5th Cir. Feb. 10, 2026).