National Litigation Hotline

A federal district court in the Southern District of New York has recently held that claims brought under the Sarbanes-Oxley Act were not exempt from mandatory arbitration. Boss v. Salomon Smith Barney Inc., 2002 WL 21146653 (S.D.N.Y. May 16, 2003).

Plaintiff Kenneth Boss was employed by Salomon Smith Barney as a research analyst. Boss claimed that contrary to established rules, policies, and procedures, he was directed to share a draft research report with Salomon's investment bankers, and that he was pressured by Salomon to change his recommendations. Boss further alleged that when he failed to do so, Salomon retaliated by terminating his employment. Boss commenced a lawsuit seeking damages and reinstatement, to which Salomon responded by bringing a motion to stay the litigation and compel arbitration. In support of its motion, Salomon cited several internal documents (including its employee handbook), which stated that arbitration was the 'required and exclusive forum' for resolution of all employment disputes (including those brought under any federal, state or local statute, regulation, or common law doctrine regarding termination of employment). Salomon also referred to a U-4 application for registration with the NASD that Boss had executed, which called for arbitration of all disputes between Boss and Salomon.