An irreverent Wall Street Blog
by Bill Singer
by Bill Singer
Registered Person Wins Labor Law, Overtime, and Wage Case
March 7, 2014
Wall Street ain't always a happy place when it
comes to labor relations. You got hundreds of thousands of registered persons
lacking union representation (for better or worse) or even an effective trade
group. Worse, FINRA, the so-called industry's self-regulatory organization, is
essentially run on the revenues from its member firms, which have the exclusive
vote franchise in all the regulator's elections and rulemaking. In the end, Wall Street's registered persons
are confronted by financially powerful and politically connected employers,
bereft of their own membership organization, and forced to deal with what looks
like a biased regulator that runs the arbitration forum where industry disputes
must be litigated. Today's BrokeAndBroker Blog examines a
somewhat typical employment dispute.
In a Financial
Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in
December 2012, Claimant Ramsey asserted violations of New York Labor
Law, failure to pay overtime, failure to provide claimant with
notice, retaliation against claimant, and failure to pay wages. In addition to
costs, interest and attorneys' fees, Claimant Ramsey sought the following
additional damages per cause of action:
- NYL Law: $13,817.25 compensatory damages, liquidated damages in an amount equal to 100% of such actual damages;
- Overtime: $1,500.00 compensatory damages;
- Notice: $2,500.00 compensatory damages, interest,
- Retaliation: lost back pay, front pay in lieu of reinstatement, lost compensation and damages, and liquidated damages in an amount of not more than $10,000.00;
- Unpaid wages: as determined by the Arbitrator.
In the Matter of the
FINRA Arbitration Between Benjamin Scott Ramsey, Claimant,
vs. Nyppex, LLC, ACP Investment Group, LLC, and Laurence Geoffrey Allen,
Respondents (FINRA Arbitration 12-04283, February
25, 2014).
Respondents generally denied the
allegations and asserted various affirmative
defenses.
Award
The FINRA Arbitration Panel
found Respondents jointly and severally liable and ordered them to pay to
Claimant
Ramsey:
- NYL Law: $3,658.26 plus 9% per annum interest from March 1, 2012 until paid in full; and $3,658.26 in liquidated damages;
- Overtime and Notice: $4,150 compensatory damages;
- Unpaid Wages: $855.77 liquidated damages plus interest in the amount of $38.51 for a total amount of $894.28.
29 U.S. Code § 216 - Penalties. . .(b) Damages; right of action; attorney's fees and costs; termination of right of actionAny employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. . . in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action. . .
Bill
Singer's Comment
What can I say? Not much. Claimant Ramsey alleged all sorts of
workplace horrors: labor law violations, unpaid overtime, unpaid wages and
retaliation. Sounds more like the stuff
of Norma Rae than Wall Street. Note that Claimant Ramsey won, and did so decisively.
Ah, but then comes the whole
closing of the ranks thing that makes mandatory intra-industry arbitration so
unpalatable for me. How convenient that
the FINRA Arbitration Decision is so short on disclosure. We don't really know jack about anything that
went on between the parties. We aren't offered a clue as to specifics and why
this Panel found in the employee's favor. Why is that? Why has darkness descended over this lawsuit
in a way that would rarely, if ever, occur in the civil courts? Why is so much of FINRA's intra-industry
arbitration docket shrouded in shadows?
One conspiracy theory, to which I whole-heartedly ascribe, is that this is exactly what the industry wants, and with an overly compliant self-regulator, this is exactly what the industry gets. This is why we have mandatory arbitration involving labor disputes. This is why so much of what really goes on in the branches and trading desks remains hermetically sealed from the prying eyes of the public.
How lovely and convenient for
the powerful FINRA member firms that they get to force their employees and
customers to give up their right to litigate in the courts and compel them to
arbitrate in a forum operated by FINRA, where, as I noted above, not one of the
customers or employees has a single vote on anything, in contradistinction to
where the member firms have a vote on everything.
And puhlease
. . . don't even suggest that this mandatory intra-industry arbitration is
freely bargained for. Not only is it mandated in FINRA's rules but it is
embedded in the regulatory form that constitutes the application for
registration: Uniform
Application for Securities Industry Registration or
Transfer ("Form U4").
No, I am not a fan or proponent of mandatory arbitration. It stinks when this unfair bargain is forced upon public customers. It stinks, just as badly, when it's forced upon industry registered persons. And the byproduct of all this forced dispute resolution is far too much secrecy and non-disclosure that always seems to further the best interests of FINRA's largest member firms to the detriment of the individual men and women who work at those firms and to the detriment of public customers who feel defrauded by those firms. If you really believe that arbitration is freely bargained for, do me a favor, try and open a brokerage account after you crossed out the arbitration clause -- and if you're seeking employment, let me know how that also goes when you decline to be subject to the intra-industry dispute resolution provisions.FINRA Code of Arbitration Procedure13200. Required Arbitration(a) GenerallyExcept as otherwise provided in the Code, a dispute must be arbitrated under the Code if the dispute arises out of the business activities of a member or an associated person and is between or among:• Members;• Members and Associated Persons; or• Associated Persons.(b) Insurance ActivitiesDisputes arising out of the insurance business activities of a member that is also an insurance company are not required to be arbitrated under the Code.13201. Statutory Employment Discrimination Claims and Disputes Arising Under a Whistleblower Statute that Prohibits the Use of Predispute Arbitration Agreements(a) Statutory Employment Discrimination ClaimsA claim alleging employment discrimination, including sexual harassment, in violation of a statute, is not required to be arbitrated under the Code. Such a claim may be arbitrated only if the parties have agreed to arbitrate it, either before or after the dispute arose. If the parties agree to arbitrate such a claim, the claim will be administered under Rule 13802.(b) Disputes Arising Under a Whistleblower Statute that Prohibits the Use of Predispute Arbitration AgreementsA dispute arising under a whistleblower statute that prohibits the use of predispute arbitration agreements is not required to be arbitrated under the Code. Such a dispute may be arbitrated only if the parties have agreed to arbitrate it after the dispute arose.Form U4:15A. INDIVIDUAL/APPLICANT'S ACKNOWLEDGEMENT AND CONSENT. . .5. I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the SROs indicated in Section 4 (SRO REGISTRATION) as may be amended from time to time and that any arbitration award rendered against me may be entered as a judgment in any court of competent jurisdiction.
Also
READ:
- FINRA Panel Splits On Award In Overtime Pay And Harassment Case
- Pinnacles's $1 Million Arbitration Not Credible, Probative, Substantive, Or Meritorious
- Did You Hear About The FINRA Arbitration Claimant Seeking Over $22 Million in Damages?
- Tullet Prebon's $16 Million Raiding Case Broadside Against BGC Financial Fizzles