Contradictory court decisions are creating hurdles for workers seeking to sue their employers for mishandling 401(k) assets.

At issue are so-called breach-of-fiduciary-duty cases filed under the Employee Retirement Income Security Act, or Erisa.

These cases have proiferated in recent years because of losses in company stocks. The typical stock-drop case argues that the employer, who has a duty to protect 401(k) plan assets, was aware of some sort of corporate malfeasance and, therefore, should have warned employees about the risks of investing in the company's shares.

Workers who file Erisa cases, however, may find themselves floating in largely uncharted waters. Increasingly, judges presented with these cases have taken to tossing them out. Their reasons : Participants can't sue on behalf of the entire plan if only a portion of the plan's participants suffered losses.

It is a technical point but one taht might have an impact on 401(k) plan participants' opportunities to pursue lawsuits for perceived breaches of fiduciary duty.

In August, the Third U.S. Circuit Court of Appeals ruled that employees could sue drug maker Schering-Plough Corp., a move that reversed a lower-court decision. A New York court, however, ruled that employees couldn't sue in stock-drop case brought against investment company J.P. Morgan Chase & Co. because less than 100% of the participants were affected.

Meanwhile, the Fifth U.S. Circuit Court of Appeals, in a case filed against AMR Corp.'s American Airlines, ruled this year that all participants would have to be affected in order for a breach-of-fiduciary-duty case filed on behalf of the plan to go forward, thus raising the bar for plaintiffs to be able to win a case.

"At the moment, everybody is living in a real world of uncertainty," said Myron D. Rumeld, head of the Erisa litigation group in New York for law firm Proskauer Rose LLP. "All parties would probably benefit from greater clarity as to what the law is."

There are two main ways to file a breach-of-fiduciary-duty case under Erisa. Under one method, plaintiffs would file on behalf of themselves, as individuals. If they go this route, however, they are far less likely to get any money, based on a 2002 Supreme Court ruling that has been interpreted to mean that breach-of-fiduciary-duty cases brought by individuals can't result in financial restitution.

As a result, people have been flocking to sue on behalf ot the plan, often as class-action lawsuits. This way, they stand a greater chance at benefiting financially if their employer is found guilty.

The Department of Labor has been trying to influence courts to allow these cases to move forward, regardless of how many participants were affected. The department has filed friend-of-the-court briefs in several cases, including the one against Schering-Plough ; the one in the fifth circuit against American Airlines, which is set for a rehearing ; and one against information-technology services provider Electronic Data Systems Corp.

As it stands, workers' opportunities to seek redress seem to be narrowing. If people file a lawsuit on behalf of themselves, they risk receiving no financial restitution. If they sue on behalf of the plan, they may have to ensure that 100% of the participants were affected.