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Federal Appeals Court Schedules Oral Argument in Appeal of District Court’s Denial of New York Life’s Motion to Compel Arbitration of Former Agent’s $14 Million Lawsuit

Yesterday, the United States Court of Appeals for the First Circuit scheduled oral argument in an appeal by New York Life (and two related companies) of the United States District Court for the District of New Hampshire’s denial of a motion to compel arbitration filed by New York Life in a lawsuit filed by Ketler Bossé, a former soliciting agent and district agent for the company.

The parties filed their appellate briefs earlier this year and then, at the First Circuit’s request, supplemental briefs in July.  Oral argument is scheduled for September 24, 2020, at 10 a.m.  It will be conducted via Zoom due to the Coronavirus pandemic.

Factual Background

Mr. Bossé engaged Fojo Law and filed a Complaint in the District Court in January 2019, asserting various federal and state employment-related claims against New York Life, including claims for discrimination and retaliation under 42 U.S.C. § 1981, conspiracy to interfere with civil rights under 42 U.S.C. § 1985, and breach of contract under 42 U.S.C. § 1981, and various state law claims, including claims for breach of the covenant of good faith and fair dealing, fraud, wrongful termination, tortious interference with economic advantage, violation of New Hampshire’s Consumer Protection Act (RSA 358-A), breach of fiduciary duty, unjust enrichment, quantum meruit, conversion, and defamation.

Mr. Bossé alleged that, despite excelling as an agent for New York Life and the many accolades he earned during his 14-year affiliation with the company, New York Life terminated him because he is black and then defamed him and appropriated his clients. He alleged he is owed over $14 million in lost commissions, residual commissions, override commissions, and other compensation and expenses.

The Parties’ Arguments

New York Life filed a motion to compel arbitration, arguing that, under an employment agreement Mr. Bossé signed in 2004 (which was then terminated in 2005), Mr. Bossé’s claims must be dismissed in favor of arbitration because, under the agreement, he is obligated to arbitrate all claims he might have against New York life before the Financial Industry Regulatory Authority (“FINRA”). New York Life also moved to dismiss Count III (conspiracy to interfere with Mr. Bossé’s civil rights) for failure to state a claim.

We filed an objection and argued the case should not be referred to arbitration because the facts and circumstances giving rise to this lawsuit occurred over 12 years after the agreement terminated, while Mr. Bossé was working as an independent contractor (not an employee) under two other agreements, neither of which contained an arbitration provision. We argued further that, even if the arbitration clause survived the 2004 agreement, it could not apply to Mr. Bossé’s claims because they are unrelated to the agreement and arose long after its termination.

The District Court’s Ruling

The District Court DENIED New York Life’s motion in a 23-page order issued on November 13, 2019.  The Court held a valid agreement to arbitrate did not exist (and denied New York Life’s request to dismiss Count III).

The Court rejected New York Life’s argument that the arbitration clause was so expansive that it covered Mr. Bossé’s claims, concluding “No reasonable person in either Bossé’s position or New York Life’s position would have understood the 2004 Partner’s Agreement arbitration provision (and survival provision) to require arbitration of any and all future claims of whatever nature or type, no matter how unrelated to the Partner’s Agreement, and no matter how distant in the future the claim arose.” The Court even adopted the analogy we offered in our objection: “For example, a reasonable person signing the Partner’s Agreement would hardly think that a slip and fall injury suffered by plaintiff on New York Life property 30 years in the future, and 25 years after any work or other relationship terminated, would be subject to arbitration under that particular clause.” The Court continued: “Defendants’ current position – that the Partner’s Agreement obligates the parties to arbitrate any and every dispute between them, no matter what it is and no matter when it arises – is unbounded to the point of absurdity.”

The Appeal

New York Life appealed the District Court’s decision regarding the arbitration provision only.  The parties filed lengthy briefs earlier this year, including New York Life’s principal brief in January, Mr. Bossé’s appellee brief in March, and supplemental briefs in July.  The First Circuit will focus on two issues: (1) whether the arbitration provision covers this dispute, and (2) whether the issue of whether the arbitration provision applies at all should have been decided by the District Court.

If the First Circuit affirms the District Court’s decision, this case will (barring any further appeals by New York Life) proceed in court.  If so, th parties will then hold a Rule 26(f) conference, prepare and submit a discovery plan to the Court, and begin discovery.