The Supreme Court has come down with a unanimous ruling that, at first blush, looks like a big win for employees who count on their 401(k) plans for their retirement nest eggs.

It's not.

In an opinion written by Justice John Paul Stevens, the court ruled that workers could sue under the Employee Retirement Income Security Act, the federal law that protects pensions and other employee benefits, to recover their losses.

In the case, James LaRue contended that the value of his stock holdings plummeted $150,000 when plan administrators failed to follow his instructions and switch to safer investments. His case came to the Supreme Court from the Court of Appeals for the Fourth Circuit in Richmond, Virginia, a notoriously conservative venue among the federal appeals courts, which had his individual lawsuit for breach of fiduciary duty.

Most other federal appeals courts had allowed such individual lawsuits, and so, when the Supreme Court took LaRue's case, the fear was that an adverse ruling could be devastating to employees. And most observers predicted a win for LaRue.

That has now happened. But corporate lawyers are already finding a silver lining in a concurrence written by Chief Justice John Roberts, which was joined by Justice Anthony Kennedy.

Picking up on a theory espoused by the Erisa Industry Committee, which filed an amicus brief on behalf of the respondent company, Roberts suggested that the 401(k) claims could be filed as claims for denial of benefits under another provision of Erisa, and that would require the employee to exhaust his or her administrative remedies before filing suit.

"It's really a very radical argument," said Peter Stris, a law professor at Whittier Law School in Costa Mesa, California, and an Erisa expert, who argued LaRue's case before the justices. Stris expects companies to start crafting arguments against lawsuits using Roberts' concurrence. "If I were representing a company, I'd be doing that," he said." I think it's the next frontier."

Russell Hirschhorn, a lawyer with Proskauer Rose in New York, which defends Erisa claims, agrees. Reached on Wednesday, he was already at work on a client alert about the LaRue decision. "Justice Roberts' concurrence may provide a pleasant surprise from the defense perspective," he says.

And so, a ruling that should have been a comfort for the workingman is now cause for concern.

"This decision, but for the Roberts concurrence, would have settled an area of law; now he has just made it more confusing," says Karen Handorf, a lawyer with Cohen Milstein Hausfeld & Toll, who worked on the amicus brief filed by the Pension Rights Center on behalf of LaRue.

"It's a brand new argument," she says, adding that it doesn't make any sense, because to recover on a denial-of-benefit claim, a 401(k) participant would have to take money from other 401(k) beneficiaries.

There are more worries over at the Workplace Prof Blog, a group of law professors, that notes in a post on the LaRue decision that Roberts' concurrence "has the potential to undermine the holding of the La Rue majority" and says it would be "disastrous" for workers like LaRue who try to recover losses from their individual accounts.

Surely, there's a corporate lawyer somewhere already crafting a brief based on the wisdom of Roberts. And to think, the Bush administration weighed in on LaRue's behalf.

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