RBC In Breathless Arbitration Over Zombies And Beauty Parlor Fumes

October 22, 2015

At first blush, it seemed like a fairly garden-variety attempt to collect on the balance of a promissory note. Then came the counterclaim, which included allegations of an unsafe workplace, constructive discharge, and emotional distress. Frankly, it all seemed pretty much tit for tat, as far as these things go. Then came the oddball facts. The beauty parlor next to the branch. The lack of ventilation. The fumes. The headaches and nausea. Walking Zombies!!!! There's something in the air tonight that takes your breath away -- so just breathe fresh air.

Case In Point

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in March 2011, Claimant RBC Capital Markets asserted breach of a  promissory note executed in July 2008 as a result of Respondent Bushey's alleged failure to repay upon termination of his employment. At the close of the hearing. Claimant requested $977,285,00 inclusive of compensatory damages, pre-judgment interest and attorneys' fees.  In the Matter of the FINRA Arbitration Between RBC Capital Markets LLC, Claimant, vs. Daniel Bushey, Respondent (FINRA Arbitration 11-01338, October 15, 2015).


Respondent Bushey generally denied the allegations and asserted various affirmative defense. Additionally, Bushey counterclaimed citing the following causes of action:
  • breach of duty for failure to provide Respondent with a safe workplace environment (withdrawn in July 2015);
  • intentional disruption of existing contractual relationship;
  • constructive discharge of employee due to intolerable working conditions tantamount to dismissal and discharge;
  • breach of implied covenant of good faith and fair dealing; and 
  • intentional infliction of emotional distress. 
At the close of the hearing, Respondent Bushey requested approximately $8,600,000.00 in damages inclusive of compensatory damages and statutory damages, plus attorneys' fees in the amount of one-third of the total damages awarded.

I can feel it coming in the air tonight, oh Lord!!!

On or about April 30, 2012, Respondent filed a Motion to Amend Counterclaims to include a claim for personal injury. As set forth in the FINRA Arbitration Decision:

[R]espondent alleged that he became ill due to his exposure to harmful chemicals and other environmental allergens which were present within the RBC Vermont office as a consequence of an improperly installed and operated HVAC system. In its Opposition, Claimant asserted, among other things, that Respondent's personal injury claim is not contemplated by the arbitration agreement entered into by the parties and FINRA arbitration is not the proper forum to decide any such personal injury claims. In his Reply, Respondent asserted, among other things, that FINRA arbitration is the proper forum for the determination of all claims between the parties. After hearing oral arguments from the parties at the July 16, 2012, prehearing conference, the Panel issued an Order granting the Motion.

On or about December 5, 2014, Respondent filed a Motion to Amend First Amended Counterclaims for the purpose of including statutory employment discrimination claims. Claimant did not file a written response. At the evidentiary hearing on December 9,  2014, prior to a ruling from the Panel, Respondent withdrew his Motion to Amend Counterclaims.

On or about December 5, 2014, Claimant filed a Motion to Amend for the purpose of adding a claim against Respondent for contribution of half of a FINRA arbitration award in Case Number 09-00524 (Wachovia Securities, LLC vs. RBC Capital Markets, et al.) in the amount of $271,000.00, which the Panel in that arbitration assessed to Claimant RBC Capital Markets LLC and Respondent Bushey jointly and severally. Respondent did not file a written response. At the outset of the hearng on December 9, 2014. The  Panel heard argument on Claimant's Motion to Amend. Respondent opposed the motion on the basis that the amendment had no relation to the proceedings, among other things. Claimant replied that it would be fair and reasonable to add the claim, which would not take any time or require any real extension of the proceedings. The Panel heard oral argument from the parties on December 9, 2014, and thereafter denied Claimant's Motion to Amend without prejudice.

District Court Stayed

On or about January 27, 2015, Claimant  moved to sever certain claims, which the Panel denied. Thereafter, in late January 2015, the FINRA Arbitration Decision explains that:

[R]espondent's counsel submitted a copy of a court order in the matter of Bushey v. RBC Capital Markets. LLC and Aaron Scott from the United States District Court for the District of Vermont dated January 27, 2015, which stayed the court action pending a final determination by the FINRA Panel in this arbitration and ordered that Respondent Bushey must arbitrate all of his non-statutory discrimination claims. On or about February 1, 2015, FINRA Dispute Resolution provided the Panel with a copy of the court order.


The FINRA Arbitration Panel found:

Respondent Bushey liable on the claim of breach of promissory note and ordered him to pay to Claimant RBC:
  • $473,250.00, constituting the balance on the note and accrued pre-judgment interest; and
  • $140,714.41 attorneys' fee plus 5% annual interest from the date of the Award until paid.
Claimant RBC liable for retaliation concerning Respondent's reporting of an unsafe workplace in violation of 21 V.S.A. § 232 and ordered the firm to pay to Respondent 
  • $60,000.00 (reducing via set-off the award against Respondent Bushey to $413,250); and
  • $20,000.00 pursuant to 21 V.S A. § 232 in attorneys' fees plus 5% annual interest from the date of the Award until paid.
Bill Singer's Comment
(Or Why Everyone Was Walking Around Looking Like Zombies . . . with more musical interludes for the living undead and the breathers of fresh air)

Claimant RBC short just shy of $1 million from Respondent Bushey, who, in turn, counterclaimed for $8.6 million. In the end, Claimant winds up with over $550,000 inclusive of attorneys' fees. A lot of big numbers got thrown about. Looks like, for now, RBC emerged with the better hand but keep in mind that the arbitration took about five years to resolve and there may yet be more to this tale on appeal and in the federal courts. 

I was intrigued by the harmful chemicals and retaliation aspects of this case, which didn't get all that fleshed out in the FINRA Arbitration Decision. After reading the federal court Complaint and Order, I realized that this wasn't a flippant legal maneuver by Respondent Bushey.  You might want to delve into some of the background by reading the the District Court Complaint and the ensuing District Court Opinion and Order. 

In the District Court Complaint, we learn that:

14) On or about March 31,2009 BUSHEY contacted RBC's Project Manager Kurt P. Ostrander by email to report that "we have a beauty salon in the building and it doesn't appear [that] they have very good ventilation [and that] the smell in the office of perm is so strong that some of the brokers are feeling sick". Ostrander responded by email to state: "I have forwarded your note to RH [SMITH who was RBC"s Senior Project Manager] to contact the landlord or contractor today and resolve this quickly."

. . .

19) On May 21,2009 BUSHEY made the decision to close the New Office Space and to allow his staff to work from the RBC Williamstown office or from home until "we figure this out". BUSHEY also reported by email to SCOTT:" Everyone is walking around looking like Zombies even with the front door open. My head hasn't felt clear for a week". 

As more fully explained in the District Court Complaint, things started to spiral out of control: 

28) On or about July 6, 2009 BUSHEY spoke by telephone with DEFENDANT SCOTT, to advise him that his work-place symptoms had not yet cleared up and that the symptoms he was continuing to experience made it difficult for him to remain in the office on a full-time basis. In the call BUSHEY asked SCOTT whether he should resign as Branch Manager or should relocate to the Williamstown office. 

29) DEFENDANT SCOTT responded by shouting at him and accusing him of "not sticking it out" and of displaying bad leadership to his co-workers who had similar symptoms. Following this conversation, BUSHEY became aware that SCOTT and others at RBC had decided that he was no longer a "company man" and that they, particularly DEFENDANT SCOTT, sought to make it impossible for him to remain as an employee of RBC. 

30) Following the shouting match with DEFENDANT SCOTT, BUSHEY left the office that night and found that his symptoms had worsened. BUSHEY was then confined to bed due to illness for the next three days. When his symptoms abated, BUSHEY returned to work at the RBC Vermont Office but noticed that his symptoms continued to reoccur and seemed to be related to the length of time he spent each day in the office. 

As evidenced by the lawsuit, bad went to worse. Consider this intriguing disclosure:

In support of his constructive discharge claim, Plaintiff alleges that RBC asked him to be the branch manager of its Manchester, Vermont office, which RBC decided to relocate to a building with a beauty salon with an allegedly defective HV AC system. According to Plaintiff, RBC failed to provide a safe workplace: 

RBC's efforts to renovate and set up and operate a new office in Vermont imposed upon it a duty to provide a safe workplace for its employees. That duty arose at common law and is enforceable in Vermont by an employee against his employer pursuant to the provisions of title 21 Vermont Statutes Annotated section 223(a). That duty required among other things RBC to provide its employees including BUSHEY with "safe and healthful working conditions at their workplace [so that] insofar as practicable no employee shall suffer diminished health, functional capacity or life expectancy as a result of his or her work experience" (id. Section 20l(a)[)]. The duty to provide a safe workplace is nondelegable by the employer. 

Id. at ¶ 

Plaintiff alleges that he made a series of complaints about the working conditions on his own behalf and on behalf of his employees and that "[f]rom June 6, 2009 until about September 1, 2009 the health complaints stated by employees of the RBC Vermont office continued but gradually diminished in frequency and extent of symptoms over that time." Id. at 7, 14. Plaintiff, however, continued to feel ill and sought medical attention and was advised that his symptoms were likely to continue as long as he was exposed to his work environment. He attempted to work from home and sought guidance from his supervisor, Defendant Scott, who allegedly shouted at him and accused him of "'not sticking it out' and of displaying bad leadership to his co-workers who had similar symptoms." Id. at 8, 16. 

Thereafter, Plaintiff alleges the situation continued unabated until "[d]uring the latter part of July 2009, SCOTT telephoned BUSHEY to advise that RBC would accept his resignation as Branch Manager and allow him to work from his home for the time being" but would not allow him to relocate to another RBC branch office on either a temporary or permanent basis, which Plaintiff believed he needed to do in order to properly support his brokerage clients. Id. at 9,  18. 

Plaintiff alleges that he subsequently relocated to RBC's Jacksonville, Florida office where he discovered that as of March 2010, Plaintiff "had been placed on 'probation' by RBC for reasons which were never specifically disclosed to him." Id. at 10, ¶  21. He claims he was not given the opportunity to respond to RBC's decision as allegedly required by RBC's policies and regulations. 

Although Plaintiff alleges that RBC subsequently thwarted his efforts to remain productive, his overall performance remained within the top twenty percent of RBC's U.S. workforce. On November 1, 2010, Plaintiff decided to resign from RBC after his former regional manager advised him that "you need a quick exit strategy and a [good] friend as they are after you." Id. at 11,¶ 22

Pages 3 - 4 of the District Court Opinion and Order

READ the full-text:
Bushey Complaint (District Vermont)