James Fellus commenced arbitration against his former employer, Sterne, Agee & Leach, Inc. (“SAL”), seeking damages for wrongful termination. At the close of the arbitration hearing, Fellus submitted an exhibit related to one of the central issues before the panel. SAL objected to the use of this exhibit, but was overruled. The arbitrators ultimately issued an award in Fellus’ favor.
SAL moved in federal court to vacate or modify the award under Sections 10 and 11 of the Federal Arbitration Act. Its principal argument was that the arbitrators were guilty of misconduct in denying SAL the opportunity to dispute the exhibit submitted by Fellus to the panel at the hearing’s conclusion. The court rejected this argument, noting that arbitrators enjoy broad discretion in determining whether to hear certain evidence, and “need only hear enough evidence to make an informed decision.” To that end, SAL had admitted in its motion papers that the arbitrators had in fact heard evidence throughout the hearing on the same issue addressed in Fellus’ disputed exhibit. Accordingly, the court held that the arbitrators’ refusal to permit SAL to address the issue further after Fellus’ exhibit was submitted did not amount to a lack of fundamental fairness warranting vacation of the award.
Click here to review the court’s decision, captioned James B. Fellus v. Sterne, Agee & Leach, Inc., No. 10-CV-8881(SAS) (S.D.N.Y. 2011).