Liddle & Robinson Attorneys at Law New York City

News Item

Former Trader v. Countrywide Securities Corp. - 5/12/2009

Award Amount- $4,580,350.00

Details: Liddle & Robinson, L.L.P. has obtained a significant landmark decision on behalf of its client in the amount of $4,580,350.00 plus an order of expungment of its client's FINRA Form U-5. Our client, head of Countrywide's U.S. Treasury trading desk based in California, brought an action against his former employer in connection with the termination of his employment. Our client's employment was terminated after a routine transaction in the February 7, 2008 U.S. Federal Reserve auction of 30-year treasury bonds that, as a result of Countrywide's status as a primary dealer, caused a trading loss which was beyond his control. In an effort to avoid paying Our client his guaranteed compensation pursuant to his employment contract, Countrywide falsely claimed that the termination of his employment was for cause. Although Countrywide knew that our client had not engaged in any wrongdoing, it thereafter attempted to extort a release of our client's legal claims against it by threatening our client with a dirty Form U-5 which it would be filing with FINRA. Our client refused to submit to Countrywide's extortionate threat, and as a consequence Countrywide filed a Form U-5 which stated the reason for the termination of our client's employment as insubordination. Pursuant to an arbitration agreement with JAMS, our client thereafter asserted claims against Countrywide including breach of contract, wrongful termination of employment, and the expungment of his Form U-5. After five days of trial and post-trial briefing, among the Arbitrator's findings was that (1) our client had engaged in no wrongdoing and did not violate any policy or operating practice, procedure or rule of Countywide, (2) Countrywide was aware that our client had not engaged in any wrongdoing as its own internal investigation effectively so determined, (3) Countrywide exhibited a disturbing willingness to file a defamatory Form U-5 which would be relied upon by both FINRA and our client's future prospective employers, and (4) the termination of our client's employment was wrongful. The Arbitrator's finding in favor of our client with respect to his wrongful discharge claim is an important landmark, both in California and nationally, concerning a continually developing exception to the employment at will doctrine. Although California (and virtually all jurisdictions) has a strong public policy of employment at will, the Arbitrator upheld our client's position that there is an exception to this public policy where there is an agreement to arbitrate employment claims. Although this important exception to the employment at will doctrine has yet to be adjudicated by the California courts, the Arbitrator found that [i]f a California state or federal court is called upon to make that determination, it most likely would so decide and would adopt the better and prevailing view nationally (via federal Circuit Court opinions) that " even assuming a strong state public policy favoring 'at will' employment --- a claim for wrongful discharge, based upon a claim of termination without 'just cause' exists under applicable state law, if there is a valid and enforceable contractual provision to arbitrate the circumstances of employment and termination. As a result of these and other findings, the Arbitrator issued an award ordering that our client's Form U-5 be expunged, and that Countrywide pay our client $4,580,350.00 as damages for his breach of contract and wrongful discharge claims.

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