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A federal court in Tennessee upheld an arbitration award over an objection that the arbitrators misapplied the law.
In Hilliard v. Saul, No. 3:06-0454, 2007 WL 433241 (M.D. Tenn. Feb. 02, 2007), Saul was employed with Hilliard and complained of Hilliard's alleged securities violations. Saul was also accused of ethical violations. Subsequently, Saul was fired and he pursued claims of retaliatory discharge and under the Tennessee Public Protection Act (TPPA) in arbitration. An arbitration award was issued in his favor. Hilliard moved to vacate the award for manifest disregard of law.
The Court agreed with Hilliard's argument that the arbitrator manifestly disregarded the law in deciding the TPPA claim because Saul's complaint about the securities violation was not the only reason he was fired, a requirement under the TPPA.
However, the Court agreed with Saul that the arbitrator did not manifestly disregard the law in deciding the claim for retaliatory discharge. It was determined that Saul was fired for two reasons, complaining about Hilliard's security violations and Saul's ethical violation. Sufficient evidence existed in support of the arbitrators' decision that Saul was fired primarily because of the complaints made of Hilliard, including the timing of the investigation in relation to the ethical violation and complaints of the securities violations.
Despite the Court's conclusion that the TPPA award would fail, it concluded that the retaliatory discharge was "an adequate and independent basis" for the issuance of the panel's award.
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