Cohen v. UBS Financial Services Inc.
799 F.3d 174
| 2d Cir. | 2015Background
- Cohen, a California-based UBS financial advisor, signed a Compensation Plan agreeing to arbitration under FINRA and to waive class/collective actions.
- Cohen filed a putative nationwide FLSA wage claim and California-law claims including PAGA, seeking to pursue them in court.
- UBS moved to stay and compel FINRA arbitration; Cohen argued Rule 13204 of FINRA's Industry Code barred arbitration of the claims.
- District court granted the stay and arbitration; Cohen sought reconsideration, which was denied.
- On appeal, Cohen contends Rule 13204 is a contrary congressional command; UBS argues it is not, and the claims are arbitrable.
- Court concludes Rule 13204 does not prohibit enforcing pre-dispute waivers of class/collective actions and does not block the arbitration of Cohen’s individual claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 13204 is a contrary congressional command to FAA arbitration. | Cohen asserts Rule 13204 bars enforcement of the arbitration and waivers. | UBS contends Rule 13204 is not contrary and does not bar pre-dispute waivers. | Rule 13204 is not contrary; it does not prohibit pre-dispute waivers or enforceability. |
| Whether Cohen’s PAGA claims are arbitrable or time-barred under California law. | Cohen would keep PAGA claims in court and/or argue timely arbitration. | PAGA claims are time-barred; or not subject to arbitration under FAA. | PAGA claims are time-barred; no need to decide preemption with FAA. |
Key Cases Cited
- Lloyd v. JPMorgan Chase & Co., 791 F.3d 265 (2d Cir. 2015) (Rule 13204 context; arbitration scope and waivers)
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (PAGA arbitrability and California law)
- In re American Express Merchants’ Litig., 667 F.3d 204 (2d Cir. 2012) (FAA preemption and arbitration waivers (antithetical arguments))
- Granite Rock Co. v. International Bhd. of Teamsters, 561 U.S. 287 (U.S. 2010) (contractual arbitrability; enforceability per the FAA)
- Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (U.S. 2010) (intentions controlling; class-action arbitration limits)