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BERGER v. CANTOR FITZGERALD SECS. AND PRUDENTIAL S

November 1, 1996

BRIAN BERGER, Plaintiff, against CANTOR FITZGERALD SECURITIES and PRUDENTIAL SECURITIES, INC., Defendants.

SHIRA A. SCHEINDLIN, U.S.D.J.


The opinion of the court was delivered by: SCHEINDLIN

SHIRA A. SCHEINDLIN, U.S.D.J.

 On April 18, 1996, Plaintiff Brian Berger filed claims against Defendants Cantor Fitzgerald Securities (Cantor) and Prudential Securities, Inc. (Prudential) under the Americans with Disabilities Act, 42 U.S.C. § 12112 (1996); Title VII of the Civil Rights Act, 42 U.S.C. § 2000e (1996); Section 1985 of the Civil Rights Act, 42 U.S.C. § 1985(3) (1996); the New York State Human Rights Law, N.Y. Exec. Law §§ 296(1)(a), 296(6) and 296(7) (McKinney 1996) and the New York City Human Rights Law, Admin. Code of City of N.Y. §§ 8-107-1(a), 8-107-6, 8-107-7 and 8-502(a). On September 20, 1996, Defendants moved to compel arbitration of Plaintiff's claims, pursuant to Sections 2-4 of the Federal Arbitration Act (FAA), 9 U.S.C. §§ 2-4. For the reasons set forth below, the motions of both Defendants are denied pending discovery on Plaintiff's claim that the agreement to arbitrate was obtained as a result of misrepresentation, high pressure tactics and unfair dealing.

 I. Background

 Cantor is a government securities broker-dealer whose principal place of business is One World Trade Center, New York, New York. See Plaintiff's Complaint, dated April 12, 1996, "Complaint" at P 3. Prudential is a securities broker-dealer whose principal place of business is 199 Water Street, New York, New York. See id. at P 4. Both Defendants are and were members of the National Association of Securities Dealers (NASD) during the events underlying this proceeding. See Affidavit of Tracy J. Abatemarco, Attorney for Defendant Cantor, dated August 5, 1996, "Abatemarco Aff." at P 8; Affidavit of Vincent Alfieri, Attorney for Defendant Prudential, dated August 5, 1996, "Alfieri Aff." at P 5; Affidavit of David T. Weiss, Deputy General Counsel, Director of Compliance, and a Vice President of Defendant Cantor, dated September 19, 1996, "Weiss Aff." at P 3. Berger is a citizen of the State of New York. See Complaint at P 2.

 According to the allegations in the Complaint, Cantor hired Berger as a clerk in October, 1991. Cantor promoted Berger to the position of typist or assistant broker in November, 1993. In January, 1994, Cantor designated Berger as the assistant to Michelle Digiaro, a Cantor broker. During the time that Berger served as Digiaro's assistant, Digiaro allegedly sold $ 100,000,000 to $ 300,000,000 worth of securities per day to Prudential. She dealt with a Prudential employee named Scott Graham. See Complaint at PP 5-8, 11-12.

 At approximately 4:15 p.m. on September 8, 1994, Digiaro and two other Cantor brokers, Annie Cassisa and Tom Sylvester, allegedly entered into a conversation with Graham. See Complaint at P 14. In the course of this conversation, which occurred during business hours and at the offices of both Cantor and Prudential, the above Cantor and Prudential brokers accused Berger of (1) "having AIDS"; (2) "having a deadly disease"; (3) "coughing all day"; (4) "handling their food while having AIDS"; (5) "being a faggot"; (6) "being a homosexual"; (7) "bringing girls to the office as a cover" and (8) "giving blow jobs" ("the Statements"). See id. at PP 15-16. Prudential, through Graham, directed Cantor, through Digiaro, Cassisa and Sylvester, to "fire the faggot." See id. at P 17. Berger heard the Statements, which he asserts were and are all false, see id. at PP 32, 70, 72; Affidavit of Brian Berger, dated September 9, 1996, "Berger Aff." at P 5, and "was overwhelmed and devastated." See Complaint at P 18.

 Plaintiff also alleges that when he complained about the Statements to Frank Pezzuti, a Senior Managing Director at Cantor and the head of all of its trading rooms, Digiaro, Graham, and unnamed Cantor employees branded Berger a "snitch" and a "rat" and "proceeded to turn virtually the entire trading floor on which Plaintiff worked against him." See Complaint at PP 19, 21-22. As a result, Berger was isolated and shunned by Cantor and its employees. See id. at P 23.

 Cantor terminated Berger on March 10, 1995, for "lateness" and "poor performance." See Complaint at PP 25-26. Plaintiff alleges that these reasons were mere pretexts for his "discriminatory and malicious" termination by Defendants Cantor and Prudential. See id. at P 27.

 In support of their motions to compel arbitration, Defendants allege that on November 18, 1993, Plaintiff executed a Uniform Application for Securities Industry Registration or Transfer, known as a "U-4 Form," which contains an arbitration clause providing that disputes arising out of Plaintiff's employment and between Plaintiff and his employer or a customer must be submitted to mandatory arbitration according to the rules of the NASD. See Cantor's Memorandum of Law in Support of its Motion to Compel Arbitration and Stay Proceedings, "Cantor Memo." at 3-4; Prudential's Memorandum of Law in Support of its Motion to Compel Arbitration, "Prudential Memo." at 2.

 In opposition to Defendants' motions, Berger claims that he did not agree to the arbitration clause in the U-4 Form. See Berger Aff. at PP 3-4; Plaintiff's Memorandum of Law in Opposition to Defendant's Motions to Compel Arbitration, "Plaintiff's Memo. in Opposition" at 1-2. Berger asserts that he was told only to fill out an "application to become a registered government securities broker," Berger Aff. at PP 3, 26, that he "was given no more than five minutes to do so," id. at P 3, that Cantor "never mentioned the word arbitration," id. at P 3, and that an unnamed woman in Cantor's Compliance Department simply instructed him "to put [his] social security number at the top of each page, . . . to fill in the necessary information and sign at the bottom of the last page." Id. at P 27. Plaintiff also asserts that Cantor never provided him with a copy of the NASD Manual sections necessary for Plaintiff to understand the content and scope of the arbitration clause. See id. at PP 44-47; Plaintiff's Memo. in Opposition at 23-25. Plaintiff thus concludes that any agreement to arbitrate was the involuntary result of misrepresentation, high pressure tactics, and unfair dealing. See Berger Aff. at P 4.

 II. Discussion

 Relying on his allegation that Cantor induced him to sign the U-4 Form through misrepresentation, high pressure tactics, and unfair dealing, Plaintiff argues that the arbitration clause in the U-4 agreement should not be enforced. As a ...


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