Prior to Cunningham v. Cornell, many ERISA lawsuits were dismissed early for failing to allege that fees paid by the plan were unreasonably high. But the Supreme Court’s ruling changed that.

Now, if a retirement plan pays any amount to a vendor that qualifies as a “party in interest,” a lawsuit can proceed—even without claims that the payment was unreasonable. This doesn’t mean employers have broken the law; it means they now must justify those payments later in the legal process, usually after discovery.

What does this mean for employers? First, it significantly increases litigation risk. Discovery is expensive and invasive—requiring disclosure of contracts, meeting minutes, internal emails, and benchmarking analyses. Second, legal costs rise, even if the employer ultimately wins. Finally, reputational risk may increase if the lawsuit becomes public.

Employers need to revisit fiduciary governance. That means: maintaining records of why service providers were chosen, confirming that their fees were reasonable, and showing that performance was monitored over time. This ruling is a call to action for compliance teams, HR departments, and in-house counsel everywhere.