FINRA Arbitration Rules Prohibiting Class Waiver NOT Preempted

From the BNA Labor Reports: “A federal district court in New York Sept. 11 declined to compel financial solutions analysts pursuing a class and collective overtime action against brokerage firm Merrill Lynch to individually arbitrate their claims under the procedures of the Financial Industry Regulatory Authority (Zeltser v. Merrill Lynch & Co., S.D.N.Y., No. 1:13-cv-01531, 9/11/13).
The Merrill Lynch employees, like others in the securities industry, were required to sign agreements to arbitrate any dispute with the firm, but Judge Harold Baer of the U.S. District Court for the Southern District of New York said FINRA’s arbitration code does not permit class or collective actions. Baer denied the employer’s request that he order the employees to take their claims to FINRA as individuals, and he rejected the brokerage firm’s alternative request that he dismiss the lawsuit.
The brokerage firm challenged a FINRA rule that prohibits enforcement of arbitration agreements against participants in ongoing class or collective actions, but Baer rejected the firm’s contention that the rule is preempted by the Federal Arbitration Act.”

Interesting development on the preemption front.

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