APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION
503 N.E.2d 786, 151 Ill. App. 3d 597, 104 Ill. Dec. 924 1987.IL.6
Appeal from the Circuit Court of Cook County; the Hon. Benjamin S. Mackoff, Judge, presiding.
JUSTICE LINN delivered the opinion of the court. JOHNSON, J., concurs. JUSTICE JIGANTI, Dissenting.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LINN
Plaintiff, Donaldson, Lufkin & Jenrette Futures, Inc. (Donaldson), appeals from an order of the circuit court which denied its application for a stay of arbitration proceedings. (Ill. Rev. Stat. 1985, ch. 10, par. 102(b).) Donaldson applied for the stay on the ground that it had not agreed to arbitrate the compensation claims which defendant-appellee and former employee Edwin C. Barr (Barr) had raised in his arbitration demand to the Chicago Board of Trade. The trial court denied Donaldson's application, finding that "in cases arising under the Uniform Arbitration Act . . . if it is unclear whether [a claim] is arbitrable, the matter would be directed to arbitration to allow the arbitrator to determine his own jurisdiction."
On appeal Donaldson raises the following issues: (1) whether the trial court erred in allowing the arbitrator to determine his own jurisdiction; and (2) whether the trial court erred in not finding that the scope of the parties' arbitration agreement did not cover Barr's claims.
Plaintiff Donaldson originally operated as a commodity futures broker and had several offices, which included one in Chicago. The Chicago office was also the office which directed the trading activities on the Chicago Board of Trade.
In 1983, Donaldson hired the defendant Barr to locate in the Chicago office and take the post of a senior vice-president for the company. Barr's duties included supervising managers and account executives, as well as managing Donaldson's trading activities on five commodity exchanges, including the Chicago Board of Trade.
In addition to providing Barr with membership in the Chicago Board of Trade, Donaldson also prepared several documents which described Barr's employment duties and which also provided a compensation analysis for these duties. Such compensation included a straight salary of $90,000 per year, the use of a car, a top-line percentage of a maximum of 5% of the gross generated from any new business for the first year, and a bottom-line percentage of 5% from related offices. In addition, and notable in this regard, was the inclusion of 15% of the bottom-line profit of the Chicago office activities.
In July 1985, Donaldson sold its operation to another firm and ceased activity as a broker on all exchanges, including the Chicago Board of Trade. Barr also ceased working for Donaldson under ambiguous circumstances at approximately the same time that Donaldson sold its commodity business.
In October 1985, Barr's attorney sent Donaldson a letter in which Barr demanded more than $500,000 in additional employment compensation; $419,000 of this amount allegedly arose as 15% of the operating income which was generated by his Chicago office from 1983 through 1985. Other claims included the recruitment bonus of 5% of the gross first-year commissions produced by new offices or employees Barr brought to Donaldson, as well as reimbursement of travel and entertainment expenses.
When Donaldson did not comply with Barr's demand for payment, Barr sought arbitration before the Chicago Board of Trade, pursuant to that organization's rules. The board then set a date for the arbitration hearing in December 1985.
In response, on December 12, 1985, Donaldson filed in the circuit court of Cook County a verified application for a stay of the arbitration demanded by Barr, as well as a request for a temporary restraining order to prevent arbitration from proceeding until the court ruled on this application. Donaldson also verified complaint at law, seeking a declaratory judgment that Donaldson had discharged all its obligations to Barr, as well as seeking relief from Barr on a breach of a rental car agreement. Meanwhile, in the proceedings on Donaldson's application for stay of arbitration, the circuit court granted the Chicago Board of Trade leave to intervene as a party defendant.
In its petition, Donaldson conceded that board Rule 600.00 mandated arbitration of any dispute between members of the Board, "which arises out of the Exchange business of such parties." (Chicago Board of Trade Rule 600.00.) However, Donaldson maintained that the disputes as to compensation which Barr raised were not within the scope of the Chicago Board of Trade rule and that there was no other applicable arbitration clause in the original agreement. It was Barr's contention in the trial court that the dispute between Donaldson and Barr was not one which arose out of a mere employment contract; instead, it involved Chicago Board of Trade business and therefore fell within the scope of Rule 600.00. In addition, ...