concurring.
I agree with the result reached by the majority, but I am concerned that we have not afforded Nieolaou with the full scope of ERISA Section 510’s protections. I would focus on Nicolaou’s alleged status as a fiduciary of the Plan, a status which would have placed upon her no small burden to ensure that the Fund was being properly operated. A fiduciary of an employee benefits plan regulated by ERISA is required to discharge her “duties with respect to [the] plan solely in the interest of the participants and beneficiaries .... ” 29 U.S.C. § 1104(a)(1). The statute penalizes fiduciaries who commit breaches of their duties by making them “personally liable to make good ... any losses to the plan resulting from each such breach .... ” 29 U.S.C. § 1109(a). Some time ago, we characterized the duties of a fiduciary under ERISA “to the participants and beneficiaries of the plan [as] ... those of an *331express trust — the highest known to the law.” Donovan v. Bierwirth, 680 F.2d 263, 272, n. 8 (2d Cir.1982).
What is more, a fiduciary under ERISA turns a blind eye to improprieties at her great peril. ERISA explicitly provides in the following terms that a fiduciary’s liability may rest upon more than her own wrongful acts:
In addition to any liability which he may have under any other provisions of this part, a fiduciary with respect to a plan shall be liable for a breach of fiduciary responsibility of another fiduciary with respect to the same plan in the following circumstances:
^ ^ v
(3) if he has knowledge of a breach by such other fiduciary, unless he makes reasonable efforts under the circumstances to remedy the breach.
29 U.S.C. § 1105(a)(3).
Thus, a fiduciary under ERISA is strongly encouraged, as a means of avoiding personal liability, to take steps to remedy perceived improprieties in plan operations. That is, an ERISA fiduciary “may not avoid liability for mismanagement by simply doing nothing.” 1 Ronald J. Cooke, ERISA Practice and Procedure, § 6:11, at 6-126 (2d ed.2004) (citing Free v. Briody, 732 F.2d 1331, 1336 (7th Cir.1984)). Numerous recent cases illustrate the point. See, e.g., In re CMS Energy ERISA Litig., 312 F.Supp.2d 898, 909-10 (E.D.Mich.2004) (ERISA fiduciaries who are not alleged to have participated in co-fiduciaries’ breaches may still be liable if they had knowledge of, but took no action to prevent, co-fiduciaries’ acts); In re Dynegy, Inc. ERISA Litig., 309 F.Supp.2d 861, 905-06 (S.D.Tex.2004) (same); In re Enron Corp. Sec., Derivative & ERISA Litig., 284 F.Supp.2d 511, 661-62 (S.D.Tex.2003) (ERISA fiduciaries may be liable for failing to investigate the propriety of investments of plan funds made by co-fiduciaries).
In light of ERISA’s imposition of liability upon fiduciaries who fail to take reasonable steps to prevent the breaches of her co-fiduciaries, I am troubled by the district court’s conclusion that Section 510’s protections against retaliation do not become effective until “a formal, external inquiry” into possible violations of ERISA is launched. Nicolaou v. Horizon Media, 2003 WL 22852680, at *2 (S.D.N.Y. Oct.15, 2003). Looking at Section 510 alone, the district court correctly stated that its language does not “make any exception for fiduciaries” such that they are afforded greater protection from retaliation than anyone else who has participated in an investigation of possible violations of ERISA. Id. at *3.
But considering Section 510 in conjunction with the provisions of ERISA just discussed, the district court’s reading does not give a fiduciary such as Nicolaou sufficient protection from retaliation after she has taken appropriate steps to investigate possible breaches of duty by other fiduciaries. In fact, the district court’s limitation of Section 510 to the context of “a formal, external inquiry” would seem to leave a prudent fiduciary with nothing but unattractive options when she discovers possible breaches of duty: (1) do nothing and face possible co-fiduciary liability under ERISA Section 405; (2) make her own inquiries among her superiors and face a retaliatory response; (3) bring the matter to the attention of a regulatory agency and hope that doing so is not discovered by her superiors, at least until the agency begins its own inquiry; or (4) take upon herself the burden, and the uncertain prospects, of filing a suit under the provision of ERISA which allows fiduciaries to seek “to enjoin any act or practice which violates” the statute. 29 U.S.C. § 1132(a)(3).
*332I do not believe that ERISA’s framers intended to place fiduciaries in such an unenviable position. Instead, I agree with the reasoning of a Minnesota district court to the effect that it is best to avoid the anomalous result discussed in the following passage:
ERISA affords plaintiff the right to sue to enjoin any act or practice which violates ERISA. 29 U.S.C. § 1132(a)(3). Plaintiff clearly would have recourse under § 510 had she been discharged in retaliation for commencing a legal action against defendant to correct what she perceived to be violations of ERISA. In view of the express authorization which plaintiff possesses under ERISA to sue to remedy violations of ERISA, the court finds it logical to infer that plaintiff also possesses the right to inform plan administrators of suspected violations of ERISA. The opposite conclusion would provide a strong incentive to plan participants to institute litigation without first attempting to resolve the issue informally.
McLean v. Carlson Cos., Inc., 777 F.Supp. 1480, 1484 (D.Minn.1991).
In light of Nicolaou’s status as an ERISA fiduciary, I believe that the allegations of the amended complaint set forth “reasonable efforts” on her part, within the meaning of 29 U.S.C. § 1105(a)(3), to see that Horizon’s 401(k) plan was operated in accordance with the regulatory program set forth in ERISA. I also believe that it is reasonable to conclude that such efforts fall within the protection of Section 510 from the point at which Nicolaou began to conduct her own inquiry into the alleged underfunding of the Plan, and not merely from the point at which Nicolaou and Sil-verman met with Koenigsberg. As stated by the Secretary of Labor, appearing here as amicus curiae:
If fiduciaries do not receive [Sjection 510’s protection during the initial stages of an internal investigation, and have reason to fear that they may lose their jobs if they raise or attempt to address concerns about the plan [they administer], they may be hesitant to vigorously carry out [their] essential and mandated fiduciary functions.
This is surely a result to be avoided.