Tuesday, October 16, 2007
An equity partner in a New York law firm negotiated an employment agreement that changed her status to contract partner. She was thereafter terminated, allegedly removed files after business hours and was locked out of the firm's offices. The lawyer sued the firm and a settlement was reached. The lawyer then brought two new actions against the firm and its shareholders. The firm moved to dismiss based on the settlement or, in the alternative, to stay the actions and compel arbitration pursuant to a clause in the employment agreement. The New York Supreme Court dismissed the causes except for a gender discrimination claim. The Appellate Division, First Department, reinstated the dismissed claims and denied the firm's motion to compel arbitration.
The Court of Appeals reversed, noting the strong public policy favoring arbitration. On remand, the Appellate Divsion must determine whether the discrimination claim is subject to arbitration. (Mike Frisch)