Q: I left my firm and it filed an arbitration action against me for repayment of an upfront bonus. I believe I have a counterclaim against my former employer for sexual harassment but I'd prefer to have it heard in court rather than in arbitration. Can I file a separate claim against my firm in court?
-F.B., California

A: Rule 13201 of the FINRA Arbitration Code addresses this situation. "A claim alleging employment discrimination, including sexual harassment, in violation of a statute, is not required to be arbitrated under the Code. Such a claim may be arbitrated only if the parties have agreed to arbitrate it, either before or after the dispute arose. If the parties agree to arbitrate such a claim, the claim will be administered under Rule 13802." If the arbitration clause in your employment contract did not include discrimination claims, and if you did not otherwise agree to arbitrate such claims, you are entitled to bring your claim in court. Rule 13803 provides that, if a firm has a claim in arbitration against a broker and the broker thereafter brings a statutory discrimination claim in court against the firm, the firm has the option to bring its arbitration claim in court as a counterclaim. The firm must notify the advisor in writing that it is exercising this option and must file a copy of that notification with FINRA before filing an answer to the court complaint. If the firm files an answer in court without exercising this option, it will be found to have waived its right to assert the arbitration claim in court. That doesn't mean that the firm's claim against you disappears, just that it would have to be heard separately in the arbitration. The firm cannot exercise this option after the first hearing has begun on the arbitration claim.

Q: I'm planning to leave my firm soon and I suspect they will try to get an injunction preventing me from soliciting my clients. I know they're supposed to file an arbitration claim at the same time they file for an injunction in court but there's some strange language in my contract that says I agreed "that any injunction order shall stay in full force and effect until a panel of arbitrators renders a full and final decision on the merits." I thought that once they get an injunction in court an arbitration hearing is held within 15 days where the panel can decide whether to lift the injunction pending a final hearing. Does the language in my contract supersede the FINRA rule?
-M.G., via e-mail

A: You are correct that Rule 13804(a)(2) of the Arbitration Code requires that a party seeking a temporary injunctive order from a court must, at the same time, file an arbitration claim requesting permanent injunctive relief. It is also correct that Rule 13804(b)(1) requires that an arbitration hearing on the request for permanent injunctive relief begin within 15 days of the date the court issues the temporary injunctive order. But, it would ultimately be up to the arbitration panel on whether the language of your contract or the Arbitration Code takes precedence. The question would be whether the parties, by contract, could divest the panel of the decision-making authority it's given in the Code. It might consider Rule 3110(f)(4), which says: "No predispute arbitration agreement shall include any condition that...limits the ability of arbitrators to make any award." Keep in mind, however, that this rule was intended to apply to customer agreements and an arbitration panel might not decide to extend it to employment contracts.

Alan J. Foxman, Esq., is an attorney with the law firm of Lavalle, Brown, Ronan & Mullins, P.A., in Boca Raton, Fla. His comments are not intended to be legal advice. He can be reached at afoxman@lavallebrown.com.