On June 30, 2026, the Department of Labor’s Office of Inspector General (“OIG”) issued a report entitled “DOL Needs Stronger Oversight and Controls for Sharing Confidential Information.” The report was issued in response to a request made last year by the U.S. House Committee for Education and Workforce Subcommittee on Health, Employment, Labor, and Pensions. Specifically, the Subcommittee had asked the OIG to investigate the Department’s use of common interest agreements to share confidential information with private plaintiffs’ attorneys in ERISA class action litigation, which the Subcommittee had previously identified as a pervasive problem.
In addition to asking the OIG to investigate, the Subcommittee also held a hearing on legislation introduced to address this issue on July 22, 2025, soliciting testimony from multiple witnesses. These witnesses testified that the use of such common interest agreements raised a number of concerns, including that:
- The Department was improperly sharing confidential information obtained during investigations with the ERISA plaintiffs’ bar, which weaponed that information – information they otherwise would not have – to bring and advance class action lawsuits;
- Individuals at the Department were sharing such information with private plaintiffs’ firms with whom they (a) were formerly employed before joining the Department or (b) became employed after leaving the Department; and
- There was a perception amongst plan sponsors, fiduciaries, and service providers that the Department was putting its proverbial thumb on the scales of justice, despite its role as a neutral arbiter of retirement plans.
The results of the OIG’s investigation, which focused on the timeframe of January 1, 2023 through June 30, 2025, were consistent with this testimony. In particular, the OIG found that:
- The Employee Benefits Security Administration had entered into seven common interest agreements with non-governmental entities in that 2.5-year period alone (of which the OIG reviewed four);
- The Department did not have any “formal policies or procedures, a framework for internal coordination, nor tracking mechanisms” in place to put guardrails on the use of such agreements;
- The Department may have improperly shared privileged investigative information with those non-governmental entities, thereby providing them with an “unfair advantage” in litigation and potentially creating “biased outcomes”;
- There were multiple instances of potential conflicts of interests, where the Department’s employees had worked at the same non-governmental entities with whom the Department had shared such information (before and/or after the common interest agreements were entered into); and
- The true extent of the damage done could not be ascertained, as the Department did not adequately track the use of such agreements or its contacts with these entities.
The Inspector General of the OIG testified before the U.S. House Committee for Education and Workforce Subcommittee on Workforce Protections about these findings earlier this week.
As a result of the OIG’s investigation, the Department admitted that its historical practices had “created an appearance of impropriety and presented reputational and potential legal risks to the Department.” The Department also agreed to implement several reforms to its use of common interest agreements. Among other things, the Department will: (i) develop a written policy standardizing its practices; (ii) scrutinize such agreements for potential bias; (iii) require staff involved with common interest agreements to attest that they were not employed with related external parties in the past year and would comply with the post-employment restrictions impose by federal law; and (iv) formally track executed common interest agreements and the information shared with non-governmental entities pursuant to such agreements.
The likely impact of these changes will be to reduce – or even eliminate – the Department’s use of formal common interest agreements with the ERISA plaintiffs’ bar, informal information sharing between the Department and private plaintiffs’ attorneys, and the incentive for Department employees to misuse their positions to gain potential future employment. While this is a welcome first step for plan sponsors, fiduciaries, and service providers, these reforms do not go quite as far as the requirements imposed by the legislation pending in Congress. This legislation, if enacted, would also require the Department to provide copies of common interest agreements to impacted parties and submit an annual report to Congress disclosing extensive information about such agreements.
