House Hearings Review ERISA Compliance Oversight and Transparency at the DOL

The US House of Representatives Education and Workforce Subcommittee held a hearing on July 22, 2025, on transparency and oversight at the Department of Labor (DOL) Employee Benefits Security Administration (EBSA). The hearing, titled “Restoring Trust: Enhancing Transparency and Oversight at EBSA,” focused on alleged EBSA overreach in enforcing the Employee Retirement Income Security Act (ERISA). EBSA's enforcement includes audits, investigations, and litigation to ensure that companies comply with ERISA's requirements.

Some members of the ESOP community have argued that EBSA has been overly aggressive in investigating and litigating ESOP issues, particularly the price an ESOP pays to purchase shares from owners. Two of the witnesses at the hearing, James Bonham of the ESOP Association and Lars Golumbic of Groom Law Group, testified that they thought EBSA had been too negative and burdensome in its approach to ESOPs.

The hearing focused on two pieces of legislation introduced by Republican members of the committee concerning EBSA practices. The EBSA Investigations Transparency Act would require an annual report from EBSA on its investigations, including the documents it has requested in each case. The names of the companies would not be included.

The second bill, the Balance the Scales Act, focuses on the DOL’s use of common interest agreements. These agreements allow the DOL to provide information to plaintiffs’ attorneys without previously disclosing them to the defendants’ counsel. The practice recently came to light in an ESOP case. Such agreements have been widely criticized, including in a letter from Representative Virginia Foxx (R-NC), and a judge recently ruled decisively against such agreements in that case. The bill would require that if such an agreement does lead to information sharing, the DOL must “provide a copy of such agreement to any employer, plan sponsor, or fiduciary that may be directly and adversely impacted by such assistance.”

Ali Khawar, a former DOL acting assistant secretary and then principal deputy assistant secretary during the Biden administration, testified that “without sufficient resources, even the strongest laws cannot be effectively administered in a timely manner.” On common interest issues, he said that “Congress wisely created a private right of action to enforce ERISA for fiduciaries, participants and beneficiaries, and it specifically authorized the Secretary of Labor to share information. The reality is that over a 15-year period, EBSA only found 12 investigations where it entered into a common interest agreement.”