J.P. Morgan Advisors Wrongful Termination Claim Revived on Appeal

4 Nov    Investing News

After two failed attempts to win a wrongful termination claim in arbitration and in court, a former JPMorgan Chase & Co. bank-based broker in California has been given another chance to prove his case.

A U.S. Court of Appeals panel for the Ninth Circuit reversed a lower court ruling and vacated an arbitration award that denied Bradley Sayre’s claims, according to a memorandum issued October 24.

Arbitrators violated due process in refusing to postpone hearings in July 2017 after Sayre’s lawyer fell ill and the broker asked for a delay to care for a newborn child, according to the order from judges Andrew D. Hurwitz and Kenneth Kiyul Lee. A third judge dissented from the opinion.

The decision allows Sayre to revive the Financial Industry Regulatory Authority arbitration claim, which he had filed in May 2015 following his dismissal by J.P. Morgan in March 2014. He sought more than $830,000 in damages for loss of his book of business, according to the claim.

Sayre joined JPMorgan Chase’s bank branch-based Private Client unit in 2011 in San Diego, after running an office for Edward Jones in La Jolla for four years. He is currently an advisor with USAA Financial Advisors in San Diego, according to BrokerCheck.

Sayre alleged in his arbitration claim filed in 2015 that his managers “set him up” for firing because he complained internally after he was instructed to destroy marketing materials allegedly to avoid liability in a federal investigation of the bank’s sale of collateralized derivative products.

The appellate court’s decision does not address the allegations, but lawyers said that any decision to vacate an arbitration award is notable. The federal court system gives strong deference to the arbitration process, and permits vacature primarily on procedural grounds.

“There must have been a blue moon because this result is that rare,” said Jeffrey K. Riffer, a securities lawyer with Elkins Kalt Weintraub Reuben Gartside LLP in Los Angeles, who was not involved in Sayre’s case.

Circuit Judges Hurwitz and Lee wrote that their decision is “one of the rare instances where an arbitration award must be vacated due to the arbitration panel’s arbitrary denial of a reasonable request for postponement.”

In a dissent, Judge John B. Owens cited “the extremely deferential standard of review accorded to an arbitration panel’s decision,” and criticized Sayre’s request for a 12-week paternity delay as a “last-minute announcement.”

Sayre and his attorneys at the Mirch Law Firm in San Diego did not return requests for comment about their plans.

In March 2017, while the arbitration claim was pending, they filed a federal court claim for more than $1 million on non-arbitral allegations, including violation of whistleblower protections under the Dodd-Frank Act, violation of California labor laws and retaliation.

The appellate court’s ruling also revives that case, which had been dismissed in February 2018 following the arbitration decision. Riffer said the appeals decision also allows rescheduling of the arbitration claims under a new panel.

A spokeswoman for JPMorgan declined to comment on the decision or on the bank’s procedural plans.

Two of the three arbitrators who ruled against Sayre did not return requests for comment. One, who was the sole ‘non-public’ arbitrator with industry ties on the panel, declined to comment.

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