Broker-Dealer Denied Motion to Compel Arbitration of Class Action
In Landmark Decision, New York Appellate Court Rules that Lawsuit for Overtime for Stockbrokers Should Proceed as a Class Action
NEW YORK, March 16, 2012 /PRNewswire/ -- Three stockbrokers won a resounding victory in the New York State Appellate Division, First Department as the Court found that the Plaintiffs could not be compelled to arbitrate their claims. The law firm of Joseph, Herzfeld, Hester & Kirschenbaum LLP represents the Plaintiff stockbrokers. The suit charges that during their employment at Brill Securities, Inc., stockbrokers were compensated solely by commissions yet consistently worked in excess of 40 hours a week and never received the legally mandated time-and-a-half overtime pay. The class action was filed on behalf of the Plaintiffs and all other stockbrokers who worked for Brill Securities in New York during the last six years.
Defendants sought to defeat the class action by arguing that an arbitration agreement in stockbrokers' U4 forms precluded class actions. The Appellate Court rejected Defendants' argument in its entirety and held that the claims shall proceed as a class action, an enormous victory for the Plaintiffs.
Attorney Michael Palmer , who argued the case on behalf of the Plaintiffs, stated, "We are pleased by the Court's decision which enforced the parties' agreement to arbitrate only those claims permitted by the FINRA rules. FINRA has consistently recognized that broker-dealers cannot compel stockbrokers to arbitrate claims which were filed as a class action. The Court recognized that a defendant cannot breach their own arbitration agreement to avoid class litigation." Adds attorney Matthew Kadushin , "This slams the door on broker-dealers, who are now without defense."
A copy of the First Department's decision can be found here: http://www.nycourts.gov/reporter/3dseries/2012/2012_01877.htm.
Joseph, Herzfeld, Hester & Kirschenbaum LLP currently represents stockbrokers in eleven class actions for unpaid wages and welcomes inquiries from commission-only stockbrokers and other victims of unpaid wages.
SOURCE Joseph, Herzfeld, Hester & Kirschenbaum LLP
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