Broker-Dealer Litigation - Greenberg Traurig LLP

enforceability of the arbitration agreement. The broker knowingly and voluntarily waived her
rights to a jury trial by signing the agreement because the arbitration clause in the agreement was
unambiguous, and it clearly specified that the broker’s discrimination claims were arbitrable
matters. The court also dismissed the broker’s argument that the arbitration clause was
unconscionable. The contract was not procedurally unconscionable in light of the broker’s
educational and professional background and the broker’s failure to provide evidence that she
was precluded from carefully reviewing the contract or negotiating its terms. The contract was
not substantively unconscionable because the contract was not one-sided; both parties were
required to arbitrate disputes under the arbitration clause. The district court also noted that the
contract was not substantively unconscionable because the arbitral panel could award any relief
available in a court of law. As a result, the district court compelled arbitration of the broker’s
claims, including claims against the broker’s coworkers, who were not subject to the
employment agreement. Even though the broker’s coworkers were not signatories, they were
employees of one of the parties to the contract. As a result, the court decided that the broker’s
employment contract fairly required her to arbitrate those claims as well.
Walker v. Morgan Stanley Smith Barney LLC, 2011 WL 1603490 (E.D. Pa. Apr. 28, 2011).
A broker-dealer terminated an investment counselor’s employment. The investment
counselor sued his former employer in state court, alleging that the broker-dealer had denied him
the opportunity to gather his personal belongings before escorting him out of the office. The
employer removed the case to federal court and filed a motion to compel arbitration. The
arbitration agreement required the investment counselor to arbitrate “any controversy or claim
arising out of or in any way relating to Employee’s employment … or termination thereof.” The
investment counselor opposed the motion, arguing that the relief he sought was outside the scope
of the arbitration clause. Specifically, he argued that his claims concern his personal property
and, as such, the claims do not relate to his employment. Based on its review of the complaint,
the court held that the claims fell within the scope of the arbitration agreement, which it noted
was “particularly broad.” The investment counselor’s complaint alleged that his personal
belongings included employment-related materials. For example, he sought return of his
personal computer, which contained a database of prospective clients. The court decided that
these claims fell squarely within the scope of the arbitration agreement and granted the brokerdealer’s
motion to compel arbitration.
Alvarado v. Wells Fargo Advisors, LLC, 2011 WL 677354 (S.D. Tex. Feb. 15, 2011)
After a financial advisor was terminated from her employment with a brokerage firm, she
and the firm had a dispute regarding commissions and payment on a promissory note the
financial advisor signed during her employment. The parties arbitrated their dispute and the
arbitral panel issued an award in favor of the brokerage firm. The financial advisor moved to
vacate the arbitration award on the basis that the award was ambiguous. First, she argued that
the arbitration award did not specifically address one of her defenses, and, as such, the panel
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