Federal Court Vacates Raymond James Retaliation Arbitration

February 10, 2014

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in January 2012, former Raymond James associated person Fenyk sued his former employer for retaliation, discrimination based on disability and sexual orientation, and violation of the Vermont Fair Employment Practices Act. Claimant sought:

$665,000 compensatory damages for back pay;  
$588,000.00 compensatory damages for front pay;
$250,000, punitive damages; and
attorneys' fees, interest, and costs. 

At the close of the hearing, Claimant withdrew his claim for discrimination based on  sexual orientation. In the Matter of the FINRA Arbitration Between Robert Michael Fenyk, Claimant, vs. Raymond James Financial Services, Inc., Respondent (FINRA Arbitration 12-00288, May 1, 2013).

Respondent Raymond James generally denied the allegations and asserted various affirmative defenses. 

The FINRA Arbitration Panel:

denied Claimant Fenyk's Motion to Amend the Complaint; 
granted the parties' Motions to have Florida Law Apply rather than Vermont Law, and 
granted Respondent's Motion to Admit Certain Evidence under the "After Acquired Evidence Rule." 

The FINRA Arbitration Panel found Respondent Raymond James liable and ordered it to pay to Claimant Fenyk:
  • $600,000.00 compensatory damages for back pay on his claim of discrimination based on  disability;
  • $33,627.50 in attorneys' fees;
  • $2,414.53 in litigation fees pursuant to paragraph 22(b) of the contract between the parties and §760.11(5) of the Florida Civil Rights Act. 
SIDE BAR: Florida Civil Rights Act §760.11(5) Administrative and civil remedies; construction.:

(5) In any civil action brought under this section, the court may issue an order prohibiting the discriminatory practice and providing affirmative relief from the effects of the practice, including back pay. The court may also award compensatory damages, including, but not limited to, damages for mental anguish, loss of dignity, and any other intangible injuries, and punitive damages. The provisions of ss. 768.72 and 768.73 do not apply to this section. The judgment for the total amount of punitive damages awarded under this section to an aggrieved person shall not exceed $100,000. In any action or proceeding under this subsection, the court, in its discretion, may allow the prevailing party a reasonable attorney's fee as part of the costs. It is the intent of the Legislature that this provision for attorney's fees be interpreted in a manner consistent with federal case law involving a Title VII action. The right to trial by jury is preserved in any such private right of action in which the aggrieved person is seeking compensatory or punitive damages, and any party may demand a trial by jury. The commission's determination of reasonable cause is not admissible into evidence in any civil proceeding, including any hearing or trial, except to establish for the court the right to maintain the private right of action. A civil action brought under this section shall be commenced no later than 1 year after the date of determination of reasonable cause by the commission. The commencement of such action shall divest the commission of jurisdiction of the complaint, except that the commission may intervene in the civil action as a matter of right. Notwithstanding the above, the state and its agencies and subdivisions shall not be liable for punitive damages. The total amount of recovery against the state and its agencies and subdivisions shall not exceed the limitation as set forth in s. 768.28(5).

Raymond James Moves To Vacate

Petitioner Raymond James moved to vacate the FINRA arbitration award and Respondent Fenyk moved to confirm. Raymond James Financial Services, Inc. V. Robert Michael Fenyk (Order, DMA, 13-CV-11326, February 6, 2014).

Although not set forth in the FINRA Arbitration Decision, the Court's Order explains that Fenyk worked as an independent broker-dealer for Raymond James, which is described as headquartered in St. Petersburg, Florida. As more fully set forth in the Order: 

In May 2009, petitioner discovered that respondent was abusing alcohol. Given its location, petitioner concluded that it could not adequately supervise respondent, who ran his own branch in Vermont. It terminated respondent on July 1, 2009. On February 15, 2012, respondent filed an 1 arbitration proceeding alleging petitioner retaliated  against him because of his sexual orientation and his disability as an alcoholic, in violation of the Vermont Fair Employment Practices Act, 21 V.S.A. § 495 2  Docket # 7-2. Applying a choice of law clause in the contract the parties signed, Docket # 7-15, R. 000191, the panel determined that Florida law governed the proceeding. Docket # 20-2. In its final dispute resolution document, the panel stated that it considered the pleadings, evidence, and testimony in issuing the award, but it provided no legal analysis or explanation of its reasoning. Petitioner then moved to vacate. 

. . .

1 The parties disagree about whether respondent filed discrimination claims or retaliation claims. His "Statement of Claim" does not specify under which part of § 495 he sued and uses language that appears to conflate the two types of claims. He does, however, label his claims "First Claim - Retaliation Based on Disability" and "Second Claim - Retaliation Based on Sexual Orientation." Docket # 7-2, R. 000009-000010. It thus appears he brought retaliation claims. 

2 Respondent withdrew his sexual orientation claim at the conclusion of the arbitration proceeding, Docket #7-40, R. 001030, and the panel only addressed the retaliation claim based on disability status. Docket # 20-2.

Not-So-Sunny Green Mountain State

Not only did Fenyk's arbitration claim allege a violation of a Vermont statute, but his motion to add discrimination and retaliation claims under Florida law had been denied by the FINRA arbitration panel. Notwithstanding those facts, the Order notes that the FINRA Arbitration Panel deemed Florida law to govern. This resulted in the arbitration proceeding some 2 yeas after the termination of the subject contract despite Florida's one-year statute of limitations on such actions. Pointedly, the Court noted that;

[N]onetheless, the arbitrators ignored that statute and somehow construed Florida law to find a violation of a Vermont statute-a statute which, given the governing law, was wholly inapplicable to the case. Awarding damages to a plaintiff who has pled no claims under the applicable law plainly transgressed the limits of the arbitrators' power. For this reason, the award must be vacated. 
Petitioner's motion to vacate the arbitration award (Docket # 5) is ALLOWED.  Defendant's motion to confirm the arbitration award is DENIED. Judgment may be entered vacating the award.

READ the Full-Text Court Order