Appeals Court Sides With Employee, Upholds $4 Million Award In Retaliatory Firing Dispute

From the Florida Phoenix:

By Michael Moline

September 17, 2020

A split federal appeals court has reinstated a $4 million arbitration award to a Miami investment adviser fired by Citigroup Global Markets Inc. for behaving abusively toward co-workers.

It was a rare arbitration win by an employee against a major corporation.

A panel of the U.S. Court of Appeals for the 11th Circuit ruled, 2-1, that the arbitrator could reasonably have concluded that Citi axed “star performer” Christian Gherardi for threatening to force arbitration after his supervisors sent him a “final warning” letter following “inappropriate and abusive behavior towards colleagues.”

The majority ruling by Judge Britt Grant cited the enormous deference that the courts owe to arbitrators under the Federal Arbitration Act, even when they make serious legal errors.

The law is intended to provide an alternative to expensive civil litigation if employer and employee agree (even though for many companies signing these agreements is a condition of employment).

“Because the dispute’s resolution was contractually assigned to the arbitrators and they arguably construed the contract, that is enough. As Gherardi correctly points out, Citi’s argument boils down to a claim that the arbitrators misinterpreted the governing contract. This is a far cry from a valid claim that the arbitrators exceeded their powers,” Grant wrote, joined by Judge Barbara Lagoa.

“This rule can be a tough pill to swallow for a losing party subjected to what seems like a legally questionable interpretation. And courts are understandably protective of our interpretative authority. But we have good reason to defer to the arbitrator’s reasoning, even when it is different than our own,” Grant added.

Arbitration appeals to corporations because it is cheaper and “you don’t have the risk of having your case decided by a runaway jury,” said Ethan Brecher, the New York attorney who represented Gherardi, in a telephone interview.

“You have more control and privacy over the process. Companies tend to view arbitration as a more favorable form. I think that’s generally borne out in reality. So, it is rare instance when an employee will get a big win.”

In a dissent, Judge Beverly Martin wrote that Gherardi’s contract explicitly categorized him as an at-will employee, subject to firing for any reason or none. She added that the company decided to fire him on Dec. 9, 2015 — one day before he notified his superiors of his decision to seek arbitration.

“Given that Citi’s decision to fire Mr. Gherardi had already been made at the time he announced his decision to arbitrate, Citi’s decision to fire him could not have been motivated by retaliation,” she wrote.

This story was originally published by the Florida Phoenix. For more stories from the Florida Phoenix, visit FloridaPhoenix.com.