Matter of Lorrainer C. Brady v The Williams Capital Group, L. P.

In this Article 78 case, the question is whether the petitioner was financially capable of sharing arbitration fees and costs.

In 1999, the respondent hired petitioner to sell fixed income securities. As a requirement for the position, petition needed to complete a Uniform Application for Securities Industry Registration to Transfer in order to become registered with the National Association of Securities Dealers (NASD). Upon registration, petitioner was no subject to the NASD rules.

In 2000, respondent created an employee manual and each employee was required to sign and follows and condition set aside in the manual. The employee manual included a “Mutual Agreement to Arbitrate Claims,” which states that all disputes will be arbitrated and each party will equally share the fees and costs of the arbitrator.

Approximately five years later, in February 2005, petitioner was terminated from her position at The Williams Group. Following her termination, petitioner filed a discrimination complaint with the New York State Division of Human Rights. However, eight months later, before a decision was made, petitioner withdrew her complaint. In December of the same year, petitioner filed a Demand for Arbitration with American Arbitration Association. She was seeking money damages against the respondent. Petitioner claimed that her termination of employment at the Williams Group was in violation of her Civil Rights.

According to the AAA rules, employers were required to pay all arbitration fees. Therefore, AAA decided on behalf of the petitioner and sent an invoice for $42,300 to the respondent. Respondent refused to pay the entire amount due to the Williams Group arbitration agreement in the employees’ manual.

Pursuant to Article 78, petitioner sought to force respondent to pay the fees or to force AAA to issue a judgment on respondent for failure to cooperate.

The Appellate Division sided with the petitioner because they found that respondent “equal share” provision in the agreement was “unenforceable as against public policy.” However, now the petitioner has the burden of showing that she withdrew her initial petition on the grounds that the fees were discouraging to continue the arbitration.

Respondent appealed on the grounds that petitioner was financially capable of paying half of the fees, at the time of the filing the complaint.

Order modified, without costs, by remitting to Supreme Court, New York County, for further

proceedings in accordance with the opinion herein and, as so modified, affirmed.

Read more about this Article 78 case here.

To read about more Article 78 cases go to http://www.sheerinlaw.com/?id=78.