Saturday, April 30, 2016

SEC Drafts Rules For Mediation

Earlier this year, the Securities and Exchange Commission (SEC) approved a Financial Industry Regulatory Authority (FINRA) proposal to merge its dispute resolution subsidiary, FINRA Dispute Resolution, Inc. into and with its regulatory subsidiary, FINRA Regulation, Inc. FINRA continues to operate a dispute resolution program, now as a separate department within FINRA Regulation under the name of the Office of Dispute Resolution. Now, the SEC has proposed draft rules for mediation specified in the Corporation Code and other special laws it implements. The guidelines also apply to intra-corporate issues voluntarily brought to the commission by the parties concerned, provided the disputes have not yet been lodged in court. The SEC has the responsibility to determine the aspects of the dispute that can be mediated and those that cannot. Despite the passage of the Securities Regulation Code (SRC), which transferred the jurisdiction over intra-corporate cases to the regular courts, the SEC has retained its power to handle residual cases. The mediation rules are available for comment until May 25, 2016, and do not cover administrative cases including petitions for cease-and-desist orders for violations of the Corporation Code, the SRC, and other laws and circulars issued and implemented by the commission, which are subject to administrative sanctions. See more at-- and

Sunday, April 24, 2016

Deflategate and latest NFL vs. NFLPA arbitration ruling

In a decision that might impact the ongoing Deflategate saga, this month an Arbitrator ruled that NFL Commissioner Roger Goodell is acting within his rights when he places a player on the exempt list for violating the league’s Personal Conduct Policy: “The Article 46.1(a) ‘action’ that is embodied in the notice to a player and that will be at issue in the Article 46.2(a) appeal (heard either by a hearing officer or the Commissioner himself) must be an ‘action’ of the Commissioner...[T]here is no basis either in the contractual documents or the past practices of the Parties to conclude that the Commissioner may completely delegate to a disciplinary officer or anyone else...” If applied to the Brady case, this ruling could make it improper for Goodell to have delegated his powers to football operations executive Troy Vincent who imposed the punishment. Reportedly, the reason Goodell had Vincent “impose” the discipline was clear-- the commissioner wanted to serve as the arbitrator at the inevitable appeal hearing, because actual independent arbitrators had ruled against him too many times in recent cases-- a role he could not play if he were to be ruling on his own ruling. By delegating the power to Vincent, Goodell remained “impartial” in the process. Apparently, the NFLPA objected in a letter just days after the ruling, stating Vincent had no authority to impose discipline on Brady so it must be set aside. Though an arbitrator can’t force the NFL to re-do the disciplinary process, if the Brady case gets remanded to Judge Richard Berman to examine this issue, it may impact the case of Tom Brady and the NFL. Judge Berman previously used Article 46 to favor Brady’s side over the NFL’s last year, but did not reach Brady’s other claims which included improperly delegating authority to discipline players for conduct detrimental to the NFL. Evidently, NFL precedent demonstrates that, in Article 46 arbitration appeals, players must be afforded the opportunity to confront their investigators. The Deflategate case is currently being decided by a three-judge panel in the United States Court of Appeals for the Second Circuit which heard oral arguments last month. See story here-- and and forthcoming decision at UPDATE: A day after this post, based on a 2-1 vote of a three-judge federal panel, the appeals court reversed the district judge's ruling, siding with Commissioner Goodell over the NFL Players Association.

Monday, April 18, 2016

NFL No-Cap Concussion Settlement Approved

Just before the start of the 2013 professional football season, thousands of former players settled with the National Football League (NFL) over concussion-related suits. The league agreed to pay for medical benefits and injury compensation to retired players, as well as to fund medical exams, research and to pay litigation expenses. After that first deal was rejected by the trial court, a second deal doing away with a cap on the fund from which injured former players would draw was reached. The lower court, however, kept out a class of players who had argued that they should benefit from the settlement because in the future they may develop the disease chronic traumatic encephalopathy (CTE). Failure to compensate players with CTE was the primary objection to the previously approved deal which only compensates for CTE if the player has died. Several players appealed to the United States Court of Appeals for the Third Circuit. The appeals court noted that the research surrounding CTE is still nascent. Currently, CTE can be detected only by an autopsy of the brain, and the families of several former players who died and were found to have the condition stand to receive millions. Those awards apply only to players found before the settlement was approved. Appellate judges in affirming approval of the deal stated,"This settlement will provide nearly $1 billion in value to the class of retired players. It is a testament to the players, researchers and advocates who have worked to expose the true human costs of a sport so many love. Though not perfect, it is fair." At the outset, the district judge had signaled a preference for settlement of the case, believing that the interests of all parties would be best served by a negotiated resolution. The settlement was characterized as avoiding litigating thousands of complex individual claims over many years and providing immediate relief and support. NFL Commissioner Roger Goodell and team owners claim they wanted to "do the right thing" for former players with neurological conditions who believe their problems stem from on-field concussions. The underlying case accused the league of hiding concussions to protect its image. See more here-- and

Monday, April 4, 2016

Arbitration to the Main Stage

In an action by several exotic dancers and entertainers against the operators of Rachel’s Adult Entertainment and Steakhouse in West Palm Beach, a federal judge granted a the strip club’s motion to compel arbitration in a Fair Labor Standards Act (FSLA), finding the entertainers' objections to agreements they signed unpersuasive or incorrect. Plaintiffs sought unpaid wages, claiming they were misclassified as independent contractors and that defendants failed to pay them a proper minimum wage and overtime as workers. Enforcement of the arbitration clause had been objected to because it was asserted all pages were not provided to dancers when they signed the agreements, which they claimed was under duress. Others argued they did not understand the arbitration clause due to language barriers. However, testimony given at an evidentiary hearing was deemed not fully credible by U.S. District Judge Robin Rosenberg. The club provided evidence that the documents were prepared by a third party who routinely stapled the pages together before delivering them. “The court can discern no credible basis for defendants or agents of defendants to choose to extract signature pages for certain dancers, and not others,” Judge Rosenberg wrote. “Thus, the court concludes that plaintiffs must rise or fall together. Either defendants systematically engaged in a pattern of practice of removing signature pages at the time of execution or defendants did not.” She also found the dancers’ claim of duress was without merit because the defendants provided evidence that no one was penalized for asking for more time to read the documents. “Florida law also places a strong duty on signatories to read the contents of the contract before signing,” wrote the court. Apparently, language barrier claims were exaggerated and mostly raised by a claimant who provided substantial testimony in English. The judge further stated that FLSA claims are routinely arbitrated, that the plaintiffs’ counsel had recently moved for arbitration on FLSA claims in an analogous case, that the arbitrator has the authority to sever portions of the agreement that are invalid or unenforceable, and that the Eleventh Circuit has held that when an arbitration agreement invokes the rules of the American Arbitration Association (AAA), as this one does, then it is clear the arbitrator is expected to determine if the agreement is valid. See more on story here-- and case-- Monteverde et al. v. West Palm Beach Food and Beverage LLC, case number 9:15-cv-81203, U.S. District Court for the Southern District of Florida