Raymond James Fin. Servs., Inc. v. Fenyk
| Decision Date | 11 March 2015 |
| Docket Number | No. 14–1252.,14–1252. |
| Parties | RAYMOND JAMES FINANCIAL SERVICES, INC., Petitioner, Appellee, v. Robert Michael FENYK, Respondent, Appellant. |
| Court | U.S. Court of Appeals — First Circuit |
Norman E. Watts, with whom Watts Law Firm, PC was on brief, for appellant.
Sandra D. Grannum, with whom Davidson & Grannum, LLP, Peter J. Pingitore, and Pingitore & Fitzpatrick, LLC were on brief, for appellee.
Before HOWARD, LIPEZ, and BARRON, Circuit Judges.
An arbitration panel awarded appellant Robert Fenyk $600,000 in back pay based on a claim that he was unlawfully terminated from his job as a stock broker because he is an alcoholic. The district court vacated the award, concluding that the arbitrators lacked authority to grant that remedy because Fenyk brought no claims under the state law the arbitrators applied. Fenyk now seeks reinstatement of the award, arguing that the district court failed to give due deference to the arbitrators' ruling.
We reverse the district court's judgment. Although the arbitration decision may have been incorrect as a matter of law, it was not beyond the scope of the panel's authority.
Appellant Fenyk was associated with appellee Raymond James Financial Services (“RJFS”) as a securities broker for more than seven years, first in New York City and then, beginning in October 2004, in Vermont. Fenyk managed his own small branch office in Vermont and was designated an independent contractor for RJFS under his agreement with the company. RJFS is based in Florida, and the “Independent Sales Associate Agreement” that Fenyk signed contained a provision stating that Florida law would govern disputes between the parties. Fenyk also signed RJFS's Business Ethics Policy, in which he agreed to arbitrate any conflicts “arising out of the independent contractor relationship.”
In May 2009, during a routine check of Fenyk's customer communications, an RJFS reviewer noticed an email to a client, Fenyk's former domestic partner, suggesting that Fenyk had an alcohol problem. The email began with information about the client's account, but went on to note Fenyk's “slip” and his “need [for] meetings and real sobriety for a dialoug [sic] with you.” The email also reported that Fenyk's “new AA friend was very hard on [him] last night.”
The reviewer alerted Fenyk's RJFS supervisors in Florida to the email. On May 27, Thomas Harrington, regional director for the Northeast, and John Tholen, the assistant regional director, called Fenyk and told him they were no longer comfortable supervising him from afar and his contract would be terminated in thirty days.1 Harrington testified that he decided to terminate Fenyk's affiliation with RJFS as a result of the email because he was concerned about Fenyk's “ongoing sobriety” and the possibility that he was transacting business with clients while he had “an alcohol problem.” Although Fenyk's employment with RJFS initially was extended beyond the thirty days so he could arrange a sale of his client “book” to another RJFS broker, the relationship ended on July 1, 2009, after Fenyk decided not to proceed with that sale.
Approximately two years later, in June 2011, Fenyk filed a complaint in Vermont state court alleging that he had been fired on account of his sexual orientation and his status as a recovering alcoholic, in violation of Vermont's Fair Employment Practices Act (“VFEPA”), Vt. Stat. Ann. tit. 21, § 495. Once alerted by RJFS of his obligation to arbitrate employment disputes, Fenyk dismissed the complaint and brought an arbitration proceeding before the Financial Industry Regulatory Authority (“FINRA”). His FINRA Statement of Claim reiterated the same two causes of action asserted in his court complaint: retaliation based on sexual orientation and disability, in violation of Vermont law. Fenyk sought $665,000 in back pay, $588,000 in front pay, and $250,000 in punitive damages, along with attorney's fees and costs.
In addition to denying the allegations of discriminatory action, RJFS responded to Fenyk's filing by asserting that Vermont law did not apply to the parties' relationship, and thus the Vermont claims necessarily failed; that Fenyk was an independent contractor, not an employee, and was therefore not protected by either Florida's or Vermont's employment discrimination law; and that his claims were time-barred.
A hearing was held before a panel of three arbitrators in January 2013. On the opening day, Fenyk asked to amend his complaint to add a claim under the Americans with Disabilities Act, 42 U.S.C. §§ 12111 –12117, noting that the federal law “mirrors” the Vermont and Florida employment discrimination statutes and that, hence, there would be no prejudice to the defense. Counsel for RJFS objected to the proposed amendment as untimely, stating that she had “responded to the claims that have been proffered.” She further noted that Fenyk had not, in fact, alleged discrimination per se, but had only asserted claims for retaliation. Fenyk did not at that time propose to add claims under Florida law.
The panel proceeded without deciding whether to accept Fenyk's proposed amendment and, following the four-day hearing, Fenyk again moved to amend his Statement of Claim, this time seeking to add disability discrimination claims under federal, New York, and Florida law.2 He argued that the statutes and the elements of the claims “are essentially the same[,] as are the interpretive judicial decisions,” though he noted that damage awards are handled differently under the various provisions.
On the same day he filed his renewed motion to amend, Fenyk also filed a post-hearing brief, in which he noted that he originally had asserted claims under Vermont law but had since moved “to add claims for violations of other relevant jurisdictions.” He repeated his assertion that the state statutes are similar to each other and to federal law, “forbid[ding] employers from engaging in discriminatory practices against their employees,” again acknowledging that the statutory remedies differed. He urged the panel, inter alia, to grant his motion to amend his Statement of Claim to add claims under federal, New York and Florida law.
In its post-hearing brief, RJFS pressed the panel to reject Fenyk's proposed amendment.3 The company argued, inter alia, that Fenyk had violated FINRA rules by making the motion outside the prescribed time period, RJFS would be prejudiced by the belated amendment, and the proposed ADA claim should in any event be rejected as time-barred. RJFS acknowledged that Florida employment discrimination law “substantially” differs from Vermont law only in its treatment of sexual orientation, and asserted that, even under Vermont's choice-of-law principles, Florida law would apply.
In March 2013, the arbitration panel denied Fenyk's motion to amend his Statement of Claim, finding that the request was untimely and there were “no special circumstances alleged to justify such relief.” At the same time, however, the panel granted what it described as a request from both parties that Florida law be applied to the proceedings.4 The panel subsequently refused to reconsider its denial of Fenyk's motion to amend.
The arbitrators announced their ruling on the merits in late April 2013, issuing only a brief statement of their conclusions. See Zayas v. Bacardi Corp., 524 F.3d 65, 70 (1st Cir.2008) (). We reproduce here the complete “Award” section of their decision.
The panel also assessed RJFS roughly $20,000 in arbitration fees.
RJFS moved in federal court to vacate the arbitration award on the ground that the arbitrators had exceeded their powers by, inter alia, awarding damages on a claim—violation of the Florida Civil Rights Act (“FCRA”)—“that Fenyk never submitted to them for their review.” Verified Petition to Vacate an Arbitration Award, at 6. The district court agreed with RJFS that the award was unsupportable. The court noted that the arbitration panel had determined that Florida law applied, but nonetheless had ignored Florida's one-year statute of limitations for civil rights claims “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.” The court then concluded:
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.
This appeal by Fenyk followed. He argues that the district court erred in construing the Florida statute of limitations to bar his claim and improperly failed to defer to the arbitrators' “good faith effort” to resolve the dispute. In response, RJFS reiterates the two primary flaws it has consistently identified in the arbitration decision: (1) the panel awarded damages despite its finding that Florida law applied and Fenyk brought no claims under Florida law; and (2) even...
To continue reading
Request your trial
-
Ortiz-Espinosa v. BBVA Sec. of P.R., Inc.
..."not squarely determined whether our manifest disregard case law can be reconciled with Hall Street ." Raymond James Fin. Servs., Inc. v. Fenyk , 780 F.3d 59, 64–65 (1st Cir. 2015) (citation and quotation marks omitted).7 We need not and do not decide now whether manifest disregard remains ......
-
Ebbe v. Concorde Inv. Servs., LLC, Civil Action No. 19-10289-PBS
...Cir. 2006) ). The doctrine applies when "the arbitrator recognized the applicable law, but ignored it." Raymond James Fin. Servs., Inc. v. Fenyk, 780 F.3d 59, 64 (1st Cir. 2015) (quoting Bangor Gas Co. v. H.Q. Energy Servs. (U.S.) Inc., 695 F.3d 181, 187 (1st Cir. 2012) ). To succeed on a m......
-
Axia Netmedia Corp. v. Mass. Tech. Park Corp.
...§ 10 of the FAA provides the exclusive grounds under the statute for vacatur of arbitration awards." Raymond James Financial Servs., Inc. v. Fenyk , 780 F.3d 59, 64 (1st Cir. 2015) (citation omitted); see also Bangor Gas Co. v. H.Q. Energy Servs. (U.S.) Inc. , 695 F.3d 181, 187 & n.3 (1st C......
-
Sanwan Trust v. Lindsay, Inc.
...‘[i]t is not enough for [a party] to show that the panel committed an error—or even a serious error.’ " Raymond James Fin. Serv., Inc. v. Fenyk, 780 F.3d 59, 63 (1st Cir. 2015) (quoting Stolt–Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 671, 130 S.Ct. 1758, 176 L.Ed.2d 605 (2010) ......
-
Lost in Dicta: The Curious Case of Nonstatutory Grounds of Vacatur in an Era of Ubiquitous Consumer Arbitration.
...245 (4th Cir. 2013) (declining to review claim under manifest disregard standard). (17.) See Raymond James Fin. Servs., Inc. v. Fenyk, 780 F.3d 59, 64-65 (1st Cir. 2015) (recognizing manifest disregard's status uncertain after Hall Street); Bellantuono v. ICAP Secs. USA, LLC, 557 F. App'x 1......