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03/20/96 ROBERT SIMMEN IV v. LEHMAN BROTHERS

March 20, 1996

ROBERT SIMMEN IV, PLAINTIFF-APPELLANT,
v.
LEHMAN BROTHERS, INC., AND DON DALIS, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. 94 L 06875. Honorable Willard J. Lassers, Judge Presiding.

The Honorable Justice Cerda delivered the opinion of the court: Greiman And Tully, JJ., concur.

The opinion of the court was delivered by: Cerda

JUSTICE CERDA delivered the opinion of the court:

Plaintiff, Robert Simmen IV, appeals from the order of the circuit court of Cook County granting the motion of defendants, Lehman Brothers, Inc., and Don Dalis, to stay proceedings on plaintiff's complaint pending arbitration. Plaintiff, a stock broker, filed a tort action for intentional interference with his economic rights against his former employer and a branch office manager. Plaintiff argues that his complaint arose out of defendants' conduct after his employment as a broker ended and was therefore not required to be arbitrated pursuant to New York Stock Exchange Rule 347.

I. Facts

Plaintiff's complaint alleged that he had been employed as a broker selling securities by Lehman, a securities brokerage firm. As part of his employment plaintiff signed a U-4 form, which stated in part:

"I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the organizations with which I register, as indicated in item 10 as may be amended from time to time."

In May 1993 plaintiff allegedly was allowed to resign. Defendant Lehman Brothers indicated on a National Association of Securities Dealers Form U-5 that plaintiff voluntarily resigned. New York Stock Exchange Rule 345.17(a) required that the reasons for the discharge or termination of employment of any registered person be reported to the New York Stock Exchange on a U-5 form. 2 N.Y.S.E. Guide (CCH) P 2345.17 (March 1995).

After plaintiff left employment with Lehman, he was offered a position with Prudential-Bache Securities, but the day following the offer plaintiff was advised that the firm could not hire him. Plaintiff allegedly was told that the prudential firm had called Dalis, plaintiff's supervisor, who allegedly said that Lehman intended to amend the U-5 form "regarding plaintiff's separation." Dalis allegedly had the intent to prevent Prudential-Bache Securities from hiring plaintiff. Defendants never actually amended the U-5 form. Plaintiff claimed injury from the statement and sought recovery for damages to his reputation.

Defendants moved to stay the circuit court proceedings pending arbitration before the New York Stock Exchange on the basis that plaintiff had agreed that any controversy between him and Lehman arising out of employment or termination of employment be arbitrated. The motion to stay proceedings was based on provisions of both the United States Arbitration Act of 1925 (9 U.S.C.A. § 1 et seq. (West 1970)), and the Uniform Arbitration Act as adopted in Illinois (710 ILCS 5/1 et seq. (Michie 1993).

On January 13, 1995, the trial court granted defendants' motion to stay proceedings pending arbitration. Plaintiff then appealed.

II. Analysis

Plaintiff argues that the trial court erred in ruling that New York Stock Exchange Rule 347 (NYSE Rule 347) mandated arbitration of his claim because he contends that the arbitration contract was no longer in effect after he resigned and because the agreement did not cover claims that arose after termination of his employment with Lehman.

The stay was granted pursuant to the United States Arbitration Act of 1925, which provides for a stay of the trial of an action involving arbitrable issues (9 U.S.C.A § 3 (West 1970)) where the arbitration contract evidences a transaction involving commerce (9 U.S.C.A. § 2 (West 1970)). The intent of the act was to move the parties out of court and into arbitration as quickly and easily as possible. ( Moses H. Cone Memorial Hospital v. Mercury Construction Corp. (1983), 460 U.S. 1, 22, 74 L. Ed. 2d 765, 784, 103 S. Ct. 927, 940.) Any doubts concerning the scope of arbitrable issues are to be resolved in favor of arbitration. ( Moses, 460 U.S. at 24-25, 74 L. Ed. 2d at 785, 103 S. Ct. at ...


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