Bon Voyage! Dodd Frank Whistleblower Claim Shipped to Arbitration


In Murray v. UBS Securities, LLC, Judge Failla in the Southern District of New York compelled arbitration of a Dodd-Frank whistleblower retaliation claim, holding that nothing in the anti-retaliation provision, 15 U.S.C. 78u-6(h), precludes the arbitration of these claims.

Murray brought suit in August 2012, alleging that UBS terminated his employment in retaliation for making disclosures protected by the Sarbanes-Oxley Act (“SOX”), which in turn violated Dodd-Frank. Specifically, he alleged that he was pressured to change research reports to promote UBS Securities’ products and trading positions in a way that would be false or misleading.

UBS moved to compel arbitration, citing an arbitration agreement Murray signed when he was hired in 2011 in which he agreed to arbitrate any dispute “arising out of the employment relationship” between him and UBS “unless prohibited by applicable law.” UBS also cited a Form U-4 signed by Murray in which he agreed to arbitrate any dispute required to be arbitrated under FINRA rules.

Looking to the language of Dodd-Frank’s anti-retaliation provision, the court held it does not include any prohibition against pre-dispute arbitration agreements. In so holding, the court rejected Murray’s argument that, because he alleged protected activity under SOX, SOX’s prohibition of arbitration should govern rather than the Dodd-Frank’s anti-retaliation provision itself.

The court’s grant of UBS’s motion to compel arbitration in Murray is consistent with the one other district court decision to date to address the issue. In Ruhe v. Masimo Corp., 2011 U.S. Dist. LEXIS 104811 (C.D. Cal. Sept. 16, 2011), a California district court also concluded that nothing in the Dodd-Frank Act prohibits the arbitration of 15 U.S.C. 78u-6(h) claims.