Employment Discrimination Claims – Securities Law -Rules Regulations Arbitration Litigation NASD NYSE SEC

Employment Discrimination Arbitrations

For many years, all claims that a registered representative had against a broker/dealer was subject to mandatory arbitration, by virtue of the representative’s association with the National Association of Securities Dealers, Inc.

However, on January 1, 1999, a change was made to the NASD Code of Arbitration Procedure, Rule 10201 (Required Submission), relating to the arbitration of employment discrimination claims. That provision is now FINRA Rule 13201:

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.

Therefore, brokers should carefully consider their options when filing a discrimination or sexual harassment claim, as the case may be more appropriate for a court proceeding, rather than anarbitration.