Berger v. Welsh

Under either the Federal Arbitration Act or the Georgia Arbitration Code, the superior court erred in vacating the award of the Financial Industry Regulatory Authority arbitrator.

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Floyd K. Berger appeals from a trial court order vacating an arbitration award in his favor after an evidentiary hearing before a Financial Industry Regulatory Authority “FINRA” arbitrator. He contends that the superior court erred in 1 applying state law, rather than federal law, in its review of the award; 2 vacating the award on the grounds that the arbitrator overstepped his authority and manifestly disregarded the law; 3 ordering a rehearing on the issue of attorney fees and expenses; and 4 denying his cross-motion to confirm the award. For the reasons that follow, we reverse the superior court’s decision and remand with instruction that the court confirm the award.

Berger was an employee of Bear Stearns & Co. in Atlanta who held a primarily administrative position with fixed compensation, but also worked on client accounts where compensation was commission-based. He alleged that because he was salaried, the firm’s payroll system did not offer a convenient way for him also to receive commissions. With the firm’s agreement, he and a Bear Stearns’ commission-based financial advisor, John Welsh, agreed that Berger would enter his commission-based production information under Welsh’s representative number. Berger alleged that for several years, as per their agreement, Welsh transferred the appropriate portion of commissions to him, but then began to skip payments. In June 2011, after both men had left their jobs at Bear Stearns, Berger filed a statement of claim against Welsh with FINRA’s dispute resolution division, alleging, inter alia, breach of contract and unjust enrichment, and seeking attorney fees and an award of approximately $55,000 exclusive of interest, attorney fees, and costs.

Berger v. Welsh

Under either the Federal Arbitration Act or the Georgia Arbitration Code, the superior court erred in vacating the award of the Financial Industry Regulatory Authority arbitrator.

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