Chase Investment Services Says Former Employee Raised Inadmissible Settlement Communication

July 8, 2021

In the world of employment litigation, courts often cite the time-honored legal doctrine of "woulda, coulda, shoulda" when dismissing a disgruntled employee's claims. In some cases, the hiring of a lawyer woulda, coulda, shoulda avoided the belated filing or the inarticulate pleading, but, then again, many a pro se litigant will explain that they woulda hired a lawyer if they coulda afforded the fees and shoulda done so but for the fact that they lacked the means. A recent employment lawsuit against JP Morgan / Chase brings all of this into focus.

2012 FINRA Arbitration Award

In a FINRA Arbitration Statement of Claim filed in April 2011, pro se associated person Kurt Hoy Pham asserted slander, libel, and defamation against Respondent Chase Investment Services Corp. in connection with his termination of employment by Chase and that firm's filing of Form U4 and U5. Claimant Pham ultimately sought $146,521.95 in lost wages; up to $1,000,000.00 in punitive and other damages; and costs. In the Matter of the Arbitration Between Kurt Huy Pham, Claimant, v. Chase Investment Services Corp., Respondent (FINRA Arbitration Award 11-01483 / July 20, 2012)

Respondent Chase generally denied the allegations and asserted various affirmative defenses. The FINRA Arbitration Hearing Panel denied Claimant Pham's claims and his request for expungement. 

So . . . why are we writing in 2021 about a 2012 FINRA Arbitration Award? Great question!!

2021 SDOH Complaint

On August 31, 2020, Pham filed a Complaint in the United States District Court for the Southern District of Ohio ("SDOH") against JP Morgan Securities and Chase alleging breach of contract. 
Kurt Pham, Plaintiff, v. JP Morgan Securities LLC, and Chase Investment Services Corporation LLC, Defendants (Opinion and Order, United States District Court for the Southern District of Ohio, 20-CV-4500 / July 1, 2021) (the "SDOH Opinion/Order")

The SDOH Opinion/Order offers some context not set out in the 2012 FINRA Arbitration Award:

Plaintiff Kurt Pham was employed by JP Morgan Chase Bank, N.A., beginning in October 2009. (ECF No. 9, ¶ 5). Defendant Chase terminated Mr. Pham's employment on March 12, 2010. (Id.). At the time of Mr. Pham's termination from Chase, he had been investigated for providing inaccurate information on his timecard, and that he had failed to secure confidential client information. (Id. ¶ 6). 

at Page 2 of the SDOH Opinion/Order

In his SDOH Complaint, Pham alleges that:

[C]hase U5's form failed to comply with FINRA, because it did not specify any acts related to the alleged failure to secure confidential client information. (Id.). In other words, Mr. Pham claims that because there was no underlying misconduct, Chase had no right-nonetheless an obligation-to file a U5 asserting misconduct. (Id.).

at Page 2 of the SDOH Opinion/Order

Motion for Summary Judgment

Defendants filed a Motion for Summary Judgment asserting that Pham's Complaint is barred by the doctrine of claim preclusion, and they further move to strike various comments in his responses that reference settlement issues and communications (as contrary to Federal Rule of Evidence 408: Compromise Offers and Negotiations).

In considering a Motion for Summary Judgment predicated upon claim preclusion, SDOH references the following four factors that must be satisfied:

(1) a final decision on the merits by a court of competent jurisdiction; (2) a subsequent action between the same parties or their privies; (3) an issue in the subsequent action which was litigated or which should have been litigated in the prior action; and (4) an identity of the causes of action. 

at Page 4 of the SDOH Opinion/Order

Final Decision on Merits

SDOH quickly finds that the 2012 FINRA Award Arbitration constitutes a final decision on the merits.

Same Old Parties

Next, SDOH found that although Chase Investment Services Corp no longer exists, that company's successor-in-interest is J.P. Morgan Securities, LLC, and, accordingly, the same parties are present in the arbitration and court proceedings.


In his FINRA Arbitration, Claimant Pham asserted slander, libel, and defamation; however, in Plaintiff Pham's SDOH Complaint, he asserted breach of contract. As such, the Court must consider whether the "breach of contract" action should have been litigated in the prior FINRA Arbitration. As SDOH found:

[I]n this case, Mr. Pham's claim in the instant action was or could have been asserted in the previous arbitration action. Just like in the FINRA Arbitration, this matter concerns issues arising out of Mr. Pham's termination. But, as Mr. Pham emphasizes, this lawsuit is a breach-of-contract claim, whereas the FINRA Arbitration involved slander, libel, and defamation. Unfortunately for Mr. Pham, however, he has not demonstrated that the instant case involves different facts as the FINRA Arbitration. Westwood Chemical Co. v. Kulick, 656 F.2d 1224, 1227 (6th Cir. 1981); see also Hapgood v. City of Warren, 127 F.3d 490, 494 (6th Cir. 1997) ("It is irrelevant that the plaintiff, in the second action, is prepared to present evidence or theories of the case not offered in the first action, or that the plaintiff seeks remedies not previously demanded[]" where the same common facts are at issue in both suits). As a result, this Court finds that the breach-of-contract lawsuit is an issue that could have been asserted in the arbitration action. 

at Page 5 of the SDOH Opinion/Order

Same Old Issues

As to the fourth prong of its test, SDOH considers whether the causes of action in Pham's Arbitration Statement of Claim involve the same common facts, allegations, and transactions as those presented in his SDOH Complaint. The Court found that:

[M]r. Pham argues that this Complaint arises out of a different series of facts and "is not regarding termination or Plaintiff's employment. Rather[,] this is pertaining to the employment contract and duty that Defendant(s) have to follow FINRA rules and regulations[,] and what Defendant(s) did after employment had terminated." (ECF No. 15 at 1(emphasis adjusted)). A careful look at Plaintiff's FINRA Statement of Claim and his Complaint shows that the facts alleged are substantially the same. For example, in the Statement of Claim, Mr. Pham stated: "My [U5 Form] should be clear and have no negative marks against it outside of a standard separation." (ECF No. 9 at 3). In the Complaint, he alleges: "Chase Investment Services BREACHED CONTRACT of supervisions and compliance reporting when sending an erroneous and malicious [U5] claiming misconduct . . . Fact is[,] there was no misconduct, so there was no right to file a [U5] with any misconduct allegations." (Id.). This Court finds that there is an "identity" between the causes of action, to the extent that the "claims arose out of the same transaction or series of transactions, or . . . the same core of operative facts." Browning v. Levy, 283 F.3d 761, 771-72, 773-74 (6th Cir. 2002) (internal citation and quotation omitted).

at Page 6 of the SDOH Opinion/Order

Inadmissible Settlement Evidence

Per Federal Rule of Evidence 408, SDOH found that various references by Plaintiff Pham included matters involved in settlement communications, and, as such, were inadmissible into evidence when used to prove a claim, the amount of the claim, or for impeachments. Allowing that Pham was pro se, the Court noted that he is "not expected to have knowledge" of the federal evidentiary rules but is still bound by them. The Court granted the Motion to Strike.

Accordingly, SDOH granted Defendants' Motion for Summary Judgment and Motion to Strike; and dismissed Pham's case.