Posts tagged with "attorney"

Medical Marijuana Use in the Connecticut Workplace

The news that Connecticut has given its approval to four medical marijuana growers in Simsbury, West Haven, Portland, and Watertown, inches the state that much closer to full implementation of the medical marijuana law that was passed in 2012.

The state also reported that over 1600 individuals in Connecticut have been certified by the state to receive medical marijuana. That number is expected to grow once production begins in earnest.

Add to that news, the legalization of marijuana in Colorado and Washington and employers now have a whole new area of law to familiarize themselves with.

It would be easy to just write some puns on the matter (and who can resist it in the headline) but it’s not such a laughing matter to employers struggling to figure out what the rules of the road are.

Summary of CT Medical Marijuana Laws

There are 5 important takeaways from CT’s medical marijuana laws:

  • Employers may not refuse to hire a person or discharge, penalize or threaten an employee based solely on such person’s or employee’s status as a qualifying patient or primary caregiver.
  • Employers may discriminate if required by federal funding or contracting provisions.
  • Employers may continue to prohibit the use of intoxicating substances, including marijuana, at work.
  • Employers may continue to discipline employees for being under the influence of intoxicating substances at work.
  • But employers may not presume that a drug test result that is positive for marijuana means that the employee used at work or was under the influence at work.

While it is clear under [state law] that an employer may terminate or discipline an employee who reports to work impaired on account of his/her medical marijuana use, the law does not address how employers are to treat employees … who use marijuana during non-work hours, but will inevitably fail routine drug tests administered pursuant to a drug-free workplace policy.

Considering Employer Liability

If the employer terminates [the employee] for violating its policy, it risks liability if he/she proves he/she was not under the influence at work. On the other hand, if it does not terminate …, the employer risks liability should [the employee] report to work under the influence and injure herself or others.

Another novel issue that is arising? Suppose your employee is on a business trip in Colorado. After a sales meeting, on the way back to his hotel, the employee legally purchases and then consumes some Rocky Mountain marijuana. Can you discipline the employee for engaging in a legal activity while on “company business”?

As long as we have disparate state laws on the subject, we’re not going to get clear cut answers. For employers, be sure to stay up to date on the developments and talk with your legal counsel about the implications for your business now that we are on the outskirts of implementation.

Credit to Daniel Schwartz of Shipman and Goodwin LLP.

If you are the victim of workplace harassment, wrongful termination, or any other labor law crime, it is imperative that you consult with an experienced employment law practitioner. The lawyers at Maya Murphy, P.C., are experienced and knowledgeable employment law practitioners and assist clients in Bridgeport, Darien, Fairfield, Greenwich, New Canaan, Norwalk, Stamford, Westport, and elsewhere in Fairfield County. Please do not hesitate to contact Attorney Joseph C. Maya, Esq. of Maya Murphy, P.C. at 266 Post Road East, Westport, Connecticut, by telephone at (203) 221-3100, or by email at jmaya@mayalaw.com

Federal Court Found Form U-4 and FINRA Rules to Constitute a Sufficient Basis for an Arbitration Agreement Between the Parties

Lawrence R. Gilmore v. Scott T. Brandt, 2011 WL 5240421 (D. Colo. Oct. 31, 2011).

In a case before the United States District Court for the District of Colorado, Lawrence Gilmore (“Gilmore”) filed a motion to confirm the Financial Industry Regulatory Authority (“FINRA”) arbitration award in his favor, pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 9.  Scott Brandt (“Brandt”) responded by filing a motion to vacate the FINRA award pursuant to the FAA, 9 U.S.C. § 10.  The court granted Gilmore’s motion to confirm the award, entered judgment for the award, and denied Brandt’s motion to vacate the award.

Case Details

The dispute underlying the FINRA arbitration began when Brandt, a representative of Lighthouse Capital Corporation, suggested that Gilmore invest $92,000 in Diversified Lending Group, Inc. (“DLG”).  Gilmore made the investment, which was quickly decimated.  Gilmore alleged that DLG was a Ponzi scheme and filed a Statement of Claim with FINRA.  Rather than seek a stay of arbitration, Brandt contested the issue of arbitrability by appending a statement of jurisdictional objection to his FINRA Arbitration Submission Agreement and raising jurisdictional objections throughout the arbitration proceedings.

FINRA appointed a panel of arbitrators to hear the matter, however, the arbitration panel did not directly address Brandt’s jurisdictional challenge.  In December 2010, the panel issued an arbitration award in Gilmore’s favor for compensatory damages of $106,024.68, post-judgment interest, and attorneys’ fees.

Arbitrability of a Dispute

In his motion for vacatur, Brandt argued that he never entered into an arbitration agreement with Gilmore; therefore, their dispute should not have been subjected to arbitration. The district court found that Brandt had sufficiently preserved his objection to arbitrability, and that it fell to the court to decide whether the dispute was in fact arbitrable.

Because arbitration is entirely a matter of contract, a party cannot be required to arbitrate a dispute that it has not agreed to submit to arbitration. See Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 57 (1995).  When Brandt first sought to be licensed to sell securities, he executed a Uniform Application for Securities Industry Registration or Transfer (“Form U-4”), which contained a section agreeing “to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of [FINRA].”

The court determined that the agreement embodied in Brandt’s Form U-4 would constitute an agreement to arbitrate the dispute with Gilmore only if FINRA rules required this dispute to be arbitrated.

FINRA Rule 12200

FINRA Rule 12200 is a broad provision that generally applies to any customer dispute arising in connection with the business activities of a FINRA member.  Specifically, FINRA Rule 12200 requires that a dispute must be arbitrated under the FINRA Code of Arbitration Procedure if: (1) arbitration is required by written agreement or requested by a customer; (2) the dispute is between a customer and a FINRA member or associated person; and (3) the dispute arises in connection with the business activities of the FINRA member or associated person.

By submitting his Statement of Claim to FINRA for arbitration, Gilmore was clearly requesting arbitration of the dispute.  The district court found that Gilmore was in a customer relationship with Brandt because Brandt had induced him to invest in DLG.

The Court’s Decision

Additionally, the district court found that Gilmore’s claims related to Brandt’s recommendation of an investment in particular securities fell within the class of disputes reasonably regulated by FINRA.  Therefore, the district court determined that FINRA Rule 12200 required the dispute between Gilmore and Brandt be submitted to arbitration.  Because of this result, Brandt’s U-4 Form was determined to be his agreement to submit to arbitration of the dispute.

Because the arbitration panel had jurisdiction to decide the dispute, the award decision is entitled to deference by the federal court.  9 U.S.C. § 9-11.  Because Brandt provided no argument that satisfied the statutory grounds for vacatur of an arbitration award, 9 U.S.C. § 10(a), the court granted Gilmore’s motion for confirmation of the arbitration award of compensatory damages of $106,024.68, with interest, and attorneys’ fees.


Should you have any questions relating to FINRA or arbitration issues, please do not hesitate to contact Attorney Joseph C. Maya of Maya Murphy, P.C. in the firm’s Westport office in Fairfield County, Connecticut at 203-221-3100 or at JMaya@Mayalaw.com.

DSUE: The Deceased Spouse’s Unused Exclusion

What is DSUE?

Many individuals have no idea what the DSUE is. Well, it is a fairly simple term when you break it down. Every individual gets an exclusion amount for estate and gift taxes that is adjusted for inflation, last year it was $5,250,000. That means that on death, or during life, an individual can devise, bequeath, or gift up to that amount without generating any tax liability. (Gifts must be under the annual exclusion amount of $14,000 in order to not be subjected to a 40% tax).

If you are married, you and your spouse can combine your exclusion amounts or, when one spouse passes away with some of their exclusion left, the other spouse may use that. This is called portability and the unused amount is called the deceased spouse’s unused exclusion (DSUE for short).

An Example of DSUE

For example, imagine you and your spouse have used none of your exclusion amounts. Now, one spouse passes away and their estate is $2,250,000. The deceased spouse’s estate will not be subject to estate tax because they had an exclusion amount of $5,250,000 in 2013. Therefore, the spouse had $3,000,000 left after their estate was settled. If the surviving spouse or their executor makes the election, they may use the remaining $3,000,000 from their deceased spouse’s estate in addition to their $5,250,000. This means they can exclude up to $8,250,000 from estate, gift, and generation skipping transfer tax. The DSUE is thus “portable.”

While no estate planner relies on portability (because the government can change the law at any time), it is definitely a useful tool for those with large enough estates to utilize it. In 2013, the government set forth legislation to make portability “permanent” for the foreseeable future.

For more on the DSUE and portability see this article: Lewis Saret, Estate Tax Portability – Date DSUE Amount May Be Taken Into Account, Forbes, Jan. 14, 2014.

If you have any questions related to DSUE or other matters of estates and trusts, please do not hesitate to contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com to schedule a free initial consultation.

2014 Estate & Gift Tax Limits Adjusted For Inflation

Starting in 2014, people who have done some estate planning and made the maximum tax-free transfers to their families (and those thinking about doing it) can take another crack at it. Beginning January 1st 2014, the amount folks can pass on during life (and at their death) completely free from federal estate tax will increase by an additional $90,000.

Using the Consumer Price Index data for the most recent month and the preceding 11 months, the tax experts at Research Institute of America calculated and reported increases for 2014 to a number of tax limits including the income where the various marginal tax brackets apply, the standard deduction amounts, the personal exemption amount, and a number of other items. They also calculated adjusted amounts for the various estate tax and gift tax limits that will apply in 2014.

  • Gift tax limits rise in 2013
  • 2013 tax rules that can save you money
  • Reducing taxes on IRA payouts
Limits Affecting Tax Free Gifts

Here are a few of the new limits that affect tax free gifts made in 2014:

Unified estate and gift tax exclusion amount. For gifts made and estates of decedents dying in 2014, the exclusion amount will be $5,340,000 (up from $5,250,000 for gifts made and estates of decedents dying in 2013).

This means that in 2014, each person has a credit that can be used to offset the estate tax on a taxable estate of up to $5.34 million of assets. The practical application of this is that individuals can make gifts during life or transfers at death of up to this new higher limit and pay no federal estate tax. Also, new last year is that spouses may combine their unused individual credit amounts and pass on assets free of estate tax on a taxable estate of up to $10.68 million at the death of the second spouse, assuming none of these credits were used during their lifetimes.

Estate Limit Changes

Other estate limits that change in 2014 include:

Generation-skipping transfer (GST) tax exemption. The exemption from GST tax will be $5,340,000 for transfers in 2014 (up from $5,250,000 for transfers in 2013).

Increased annual exclusion for gifts to non-citizen spouses. For gifts made in 2014, the annual exclusion for gifts to non-citizen spouses will be $145,000 (up from $143,000 for 2013).

Foreign earned income exclusion. The foreign earned income exclusion amount increases to $99,200 in 2014 (up from $97,600 in 2013).

Gift tax annual exclusion. For gifts made in 2014, the gift tax annual exclusion will be $14,000 (same as for gifts made in 2013). Generally the amount that can be given to any individual each year that is excluded from the gift tax is $14,000 per person per year. In 2014, this amount is projected to remain at $14,000 per person as the amount that may be gifted annually free from the gift tax. Parents may also use the technique of “gift splitting” or combining gifts to a child, whereby they can each make a gift of $14,000, for a total amount of tax free gifts made of $28,000 to a single person or child each year.

Credit: Ray Martin

If you have any questions related to estates and trusts, please do not hesitate to contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com to schedule a free initial consultation.

Americans With Disabilities Act

Defining “Disability”

State and county laws dilute the effect of disability rulings. The U.S. Supreme Court ruling that narrowed the definition of a disability under the Americans With Disabilities Act (ADA) will have limited use for Westchester employers struggling with the issue, a pair of lawyers specializing in employment law said.

That’s because the Empire State defines a “disability” more liberally as a medical impairment rather than the national standard that defines it as a condition that impairs at least one major life activity, such as bathing or brushing one’s teeth.

Supreme Court Ruling

Using that narrower meaning, the Supreme Court unanimously ruled that an automobile plant worker from Kentucky could not be considered disabled because she failed to prove that her carpal tunnel syndrome “substantially limited” a major life activity.

“It is insufficient for individuals attempting to prove disability status under this test to merely submit evidence of a medical diagnosis of an impairment,” Justice Sandra Day O’Connor wrote in the court’s 18-page decision.

Ella Williams, a paint inspector at the Toyota Motor Corp. plant in Georgetown, Ky., was fired for poor attendance that she blamed on her illness. She sued Toyota in a U.S. District Court, claiming the automaker refused to provide her with an ADA-required “reasonable” accommodation from her job polishing cars on the assembly line. Her claim was dismissed by the district court but reinstated by a federal appellate court in Cincinnati.

The Supreme Court referred Williams’ case back to the appellate court for further review (Toyota v. Ella Williams, No. 00-1089).

Who will this ruling affect?

“Before the ruling, employees lost 94 percent of claims filed under ADA because they could not establish that they were disabled to the extent called for under the law. This certainly isn’t going to make it any easier for them,” said Robert Heiferman of Jackson Lewis, the employment law firm that has an office in White Plains.

“Nationally, this ruling is probably a lot more significant than it is in New York,” he said. Heiferman cited the state’s human rights law, which bars discrimination against people with disabilities, as well as the state’s disability definition, which is broad enough to include carpal tunnel syndrome.

In addition, the Human Rights Commission created by Westchester County in 2000 can take action on complaints from individuals alleging discrimination on the basis of a disability.

A lawyer with practices in New York and Connecticut says Westchester employers may benefit from the ruling, notwithstanding the state and county laws.

“For employers, the Supreme Court ruling now creates the ability to allege a new defense in ADA cases,” said Joseph Maya, whose Maya & Associates P.C. specializes in employment and labor law. The firm has offices in New York City and Fairfield, Conn.

The Impact of the Ruling Going Forward

“The Supreme Court ruling is a very significant decision that will provide strong guidance for the lower courts, administrative agencies and certainly the appellate courts in cases concerning disability and employees bringing claims against employees,” Maya said. Disability community advocates criticized the Supreme Court decision, though one advocate said the decision highlighted an issue he said merited further study.

“Part of the problem we see is that there has to be a more universally accepted definition of a disability. A very well-meaning piece of legislation has a lot of confusing language in it. It warrants a second look,” said Robert S. Cole, a principal with his wife, Susan, in Cole Communications of Eastchester, and a board member of the 26 million-member American Association for People With Disabilities, an advocacy group based in Washington, D.C.

By ALEX PHILIPPIDIS
Fairfield County Business Journal

The lawyers at Maya Murphy, P.C., are experienced and knowledgeable employment law practitioners and assist clients in New York, Bridgeport, Darien, Fairfield, Greenwich, New Canaan, Norwalk, Stamford, Westport, and elsewhere in Fairfield County. Should you have any questions about age discrimination and workplace discrimination or any other employment law matter, please do not hesitate to contact Attorney Joseph C. Maya, Esq. He may be reached at Maya Murphy, P.C., 266 Post Road East, Westport, Connecticut, by telephone at (203) 221-3100, or by email at JMaya@mayalaw.com.

What is a Constructive Discharge?

Employment Resignation

Hopefully, you have never been fired – that is a discharge or termination.  Sometimes, however, an employee has no reasonable alternative to quitting – that is a constructive discharge.  The involuntary nature of the employee’s “quit” may enable him or her to claim the constructive discharge as an adverse employment action so as to maintain a claim for employment discrimination.  An employee’s reasonable decision to resign because of unendurable working conditions is, for remedial purposes, equated to a formal discharge.

A constructive discharge occurs when an employer indirectly, but deliberately, makes an employee’s working conditions so intolerable that the employee is forced involuntarily to resign.  The key points of inquiry are the employer’s intentional conduct and the intolerable level of the employee’s working conditions.  The standard for evaluation is objective – how would a reasonable employee behave in the particular employee’s shoes?  Subjective feelings as to the intolerable nature of the employee’s position cannot support a finding of constructive discharge.

Establishing Constructive Discharge

In assessing a claim of constructive discharge, individual factors, standing alone, may be insufficient to carry the day.  For this reason, the pertinent conditions are aggregated since a reasonable person encounters life’s circumstances cumulatively rather than individually.  Some routine workplace events – e.g. a poor performance appraisal, lack of training, or increased job demands – are to be expected and do not support an inference that a reasonable person would be “compelled” to resign.  The standard for constructive discharge goes beyond difficult or unpleasant working conditions.

As is so often the case in employment law, the presence of a constructive discharge depends upon the circumstances of the particular employee involved.  If you feel that your employer deliberately made your work environment intolerable and that you were forced to quit, you should confer with a seasoned employment law litigator to determine your rights.


The employment law attorneys in the Westport, Connecticut office of Maya Murphy, P.C. have extensive experience in the negotiation and litigation of all sorts of employment-related disputes and assist clients from Greenwich, Stamford, New Canaan, Darien, Norwalk, Westport and Fairfield in resolving such issues. If you have any questions regarding constructive discharge or other matters of employment law, please do not hesitate to contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or JMaya@Mayalaw.com to schedule a free initial consultation.

A Summary of Sexual Harassment Workplace Policies in Connecticut

Unfortunately, many instances of sexual harassment in the workplace go unreported, due either to a fear of retaliation or uncertainty as to whether the conduct constituted sexual harassment.  Whatever the case, no employee should feel demeaned in any way while on the job.  The following provides an overview of the various laws and regulations concerning sexual harassment in Connecticut, and the various steps employers must take to ensure compliance with the law.

First and foremost, even before consulting an attorney, anyone with questions or concerns relating to human rights or discrimination issues in Connecticut should consult Connecticut’s Commission on Human Rights and Opportunities (CHRO), which states that its mission “is to eliminate discrimination through civil and human rights law enforcement and to establish equal opportunity and justice for all persons within the state through advocacy and education.”  The site provides valuable resources and links.  With regard to sexual harassment, the site contains a step-by-step guide on what to do if you feel you have been the victim of sexual harassment.

The Commission gets its authority from Connecticut General Statute § 46a-54, which grants the Commission the authority to “require an employer having three or more employees to post in a prominent and accessible location information concerning the illegality of sexual harassment and remedies available to victims of sexual harassment,” and second, “to require an employer having fifty or more employees to provide two hours of training and education to all supervisory employees [ . . . ].”  The statute further provides that the training and education “shall include information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims of sexual harassment.”

What is sexual harassment?

By way of reference, sexual harassment refers to “any unwelcome sexual advances or requests for sexual favors or any conduct of a sexual nature.”

Employers with 3+ Employees

The information that is required of an employer having three or more employees includes, but is not limited to:

  • The statutory definition of sexual harassment and examples of different types of sexual harassment;
  • Notice that sexual harassment is prohibited by the State of Connecticut’s Discriminatory Employment Practices Law and Title VII of the 1964 Civil Rights Act;
  • The remedies available to a victim of sexual harassment, which can include but are not limited to:
    • Cease and desist orders;
    • Back pay;
    • Compensatory damages; and
    • Hiring, promotion or reinstatement;
  • Notice that the harasser may be subject to civil and/or criminal penalties;
  • The contact information for the CHRO;
  • A statement that Connecticut law requires that a formal written complaint be filed with the Commission within 180 days of the date when the alleged harassment occurred;
  • A large bold-faced notice stating, “Sexual Harassment is Illegal.”
Employers with 50+ Employees

An employer with fifty or more employees, in addition to the aforementioned requirements, must provide two hours of specialized sexual harassment training, which “shall be conducted in a classroom-like setting, using clear and understandable language and in a format that allows participants to ask questions and receive answers.”  The statute provides a long list of the specific topics that an employer can and should include in the training.


It is the hope that the above provides a concise, easy to understand the policies that an employer must abide by when it comes to sexual harassment.  If you feel that you have been the victim of sexual harassment, or even if you are not sure, you should consult with an attorney experienced in employment law.  The attorneys at Maya Murphy, P.C. regularly represent employees throughout the Fairfield County and New York City regions, and are ready to advocate on your behalf.  If you have questions or want to schedule a consultation, please contact Joseph C. Maya, Esq. at 203-221-3100 or at JMaya@mayalaw.com.

Court Enforces Non-Compete Clause Against Real Estate Agent

Century 21 Access America v. McGregor-Mclean, 2004 Conn. Super. LEXIS 3239

Century 21 Access America is a national real estate company that employed Ms. Tori McGregor-Mclean as a real estate agent in its Bridgeport, CT office from July 2003 to June 16, 2004.  Her employment contract, dated July 7, 2003, contained a non-compete clause that prohibited her for a two-year period following termination from engaging in competing business activities within a fifteen-mile radius of 3850 Main Street, Bridgeport, CT.  Ms. McGregor-Mclean voluntarily terminated her employment on June 16, 2004 and began to work for Buyer’s Capitol Real Estate, a company located outside of the fifteen-mile radius in Stamford, CT.

Century 21 did not have a problem with her new employment because the office was located outside of the prohibited area but issues arose when Ms. McGregor-Mclean began accepting listings within the fifteen-mile radius.  Century 21 sued Ms. McGregor-Mclean in Connecticut state court for violation of the non-compete clause and requested that the court issue an injunction to enforce the agreement.

The Court’s Decision

The court found that Ms. McGregor-Mclean’s activities with her new real estate agency were in fact violations of the non-compete agreement and it ordered that the provisions be enforced.  The plain language of the non-compete clause stipulated that Ms. McGregor-Mclean was prohibited from carrying out any direct or indirect competing business activities within the defined fifteen-mile radius.  She was in breach of the agreement because she accepted five listings within the prohibited area – it is inconsequential as a matter of law that her office was located outside of the fifteen-mile radius.

Under the agreement, she was prohibited from having a physical business presence and transacting individual deals within the defined area.  The court identified the unlawful breaches of the non-compete clause, concluded that the agreement was valid and reasonable, and issued an injunction to enjoin Ms. McGregor-Mclean from further violations of the covenant not to compete.


The lawyers at Maya Murphy, P.C., are experienced and knowledgeable employment and corporate law practitioners and assist clients in New York, Bridgeport, Darien, Fairfield, Greenwich, New Canaan, Norwalk, Stamford, Westport, and elsewhere in Fairfield County.  If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment agreement, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.

ERISA Claim Challenges Vague Language of FINRA Arbitration Award in order to Include Back Pay as Benefits-Eligible Compensation

Ronald A. Roganti  v .Metropolitan Life Insurance Company, et el, 2012 WL 2324476 (S.D.N.Y.  June 18, 2012)

In a case before the Southern District of New York, Ronald Roganti (“Roganti”), a former employee of the Metropolitan Life Insurance Company (“MetLife”), asserted claims under the Sarbanes–Oxley Act of 2002, 18 U.S.C. § 1514A (“SOX”), and the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132 (“ERISA”). Both claims challenge MetLife’s denial of Roganti’s request that a 2010 Financial Industry Regulatory Authority (“FINRA”) arbitration award be treated as benefits-eligible compensation.  MetLife moved to dismiss both claims on several grounds.  The court granted MetLife’s motion with respect to the SOX claim and denied the motion with respect to the ERISA claim.

Case Background

The underlying dispute in this case arose during Roganti’s employment with MetLife, which lasted from 1971 to 2005.  In 1999, Roganti began to voice concerns regarding allegedly-suspect business practices at MetLife and continued to do so until he terminated his employment in 2005.   Roganti claimed that throughout that time period, MetLife repeatedly disregarded his complaints and actively retaliated against him, including undermining his authority within the business subsets he oversaw and reducing his compensation with the specific purpose of reducing his pension benefits.

In July 2004, Roganti filed his initial Statement of Claim with the National Association of Securities Dealers (“NASD”) to arbitrate his disputes with MetLife.  FINRA, the successor to NASD, appointed a panel of three arbitrators to adjudicate four claims brought by Roganti: (1) the breach of contract claim, based on MetLife’s reduction of Roganti’s compensation; (2) violation of SOX retaliation provisions, based on MetLife’s retaliation against Roganti for reporting questionable business practices; (3) for the value of services rendered by Roganti; and (4) for violating ERISA, on the theory that, in reducing Roganti’s compensation, MetLife also sought to reduce his pension benefits.

In August 2010, the FINRA panel held that MetLife was liable to Roganti for $2,492,442.07 in “compensatory damages … above [MetLife’s] existing pension and benefit obligation to Claimant.” The arbitral award explain neither how the arbitrators arrived at this sum nor for what the award was intended to compensate Roganti. FINRA Docket Number 04-04876.

Benefits Claim

On March 24, 2011, Roganti filed a benefits claim with MetLife, in its capacity as the Plan Administrator, asking that the arbitral award be treated as compensation for income which MetLife had improperly denied him, and that the award be factored into the calculation of the benefits which he was entitled to under his pension plan with MetLife. MetLife denied the request for three reasons.

First, only income of current employees was benefits-eligible; therefore, since Roganti was not employed by MetLife when he received the award, it did not qualify as benefits-eligible compensation.  Second, FINRA broadly termed the award as “compensatory damages” rather than stating it was compensation for lost income.  Finally, the FINRA award did not indicate to which years of Roganti’s employment the award applied; therefore, even if the award represented unpaid income, it would be impossible for MetLife to determine concretely how the award should affect Roganti’s pension benefits. Roganti appealed this decision to MetLife, and MetLife again denied his claim.  Subsequently, Roganti filed SOX and ERISA claims in federal district court.

Because Roganti’s current SOX and ERISA claims are based on the 2011 denial of pension benefits, the court determined that these have not already been dispositioned by the 2010 FINRA arbitration.  Therefore, the court denied MetLife’s motions to dismiss both claims on grounds of res judicata and collateral estoppel.  However, because Roganti did not exhaust administrative remedies before filing his SOX claim in federal district court, the court determined that his SOX claim must be dismissed.

ERISA Claims

Roganti made two claims under ERISA, which creates a private right of action to enforce the provisions of a retirement benefits plan. 29 U.S.C. § 1132(a)(1)(B).  First, he alleged that the FINRA arbitral award compensated him for unpaid wages that resulted from MetLife’s retaliation against him.  Second, he argued that because the award constituted back pay, it must be taken into account in calculating his pension benefits.  The court determined that central to both claims is the issue of whether the FINRA arbitration award constitutes back pay to compensate Roganti for services rendered while he was a MetLife employee, which would properly be included in pension benefits calculations.

The Court’s Decision

Neither the brevity of the FINRA arbitration award nor Roganti’s statement of claims to FINRA provided the court with sufficient clarity to resolve the factual issue of exactly what the award represented. The court, therefore, construed the ambiguity in the award language in the light most favorable to Roganti.  The court concluded that he had met his burden and denied MetLife’s motion to dismiss the ERISA claim.

Because the three-month timeframe to seek clarification from a FINRA arbitration panel pursuant to 9 U.S.C. § 12 had elapsed, the court ordered the ERISA Plan Director to closely review the arbitral record, in the context of the evidence offered and arguments made by both sides at the arbitration, to determine whether or not the award represented back pay for Roganti.  The court found it unacceptable that the initial denials of benefits were based on the terse language of the arbitration award, rather than a more detailed analysis as to what the award amounts represented.


Should you have any questions relating to FINRA, employment, compensation or benefits issues please do not hesitate to contact Attorney Joseph C. Maya of Maya Murphy, P.C. in the firm’s Westport office in Fairfield County, Connecticut at 203-221-3100 or at JMaya@Mayalaw.com.

Enforceability of Non-Solicitation Agreement for Potential Clients of Former Employer

Webster Financial Corporation v. McDonald, 2009 Conn. Super. LEXIS 169

USI Insurance Services of Connecticut, Inc., formerly Webster Insurance, Inc., employed Mr. William McDonald as a senior vice president at its Westport, CT office.  The company had Mr. McDonald sign an employment agreement dated February 11, 2003 that contained non-compete and non-solicitation clauses in the event of his termination.  The agreement prohibited Mr. McDonald from soliciting any of USI’s contacts that had been clients or potential clients in the twelve months prior to his termination and established a geographical limit of twenty-five miles within USI’s Westport office.

As for the time limitation, the covenant was applicable for the great period of two years following Mr. McDonald’s termination or as long as he received benefits from a deferred compensation plan.  Mr. McDonald resigned on September 21, 2007 and began to work at Shoff Darby, Inc., an industry competitor well within the prohibited twenty-five mile radius of USI’s Westport office.  At his new firm, Mr. McDonald proceeded to solicit and sell insurance products to USI’s former and current clients.  Additionally, he contacted several USI employees and urged them to leave the company to seek employment with Shoff Darby.

Enforcing the Agreement 

USI sued Mr. McDonald and asked the court to enforce the provisions of the restrictive covenant.  Mr. McDonald presented two defenses to the court, arguing that the agreement was overly broad and therefore unenforceable.  He claimed that the prohibition of potential clients and the potential unlimited duration made the non-compete agreement unreasonable and unenforceable.

USI asserted the validity of the agreement and emphasized to the court that it contained a “blue pencil” provision that authorized the court to amend the time and/or geographical limitation in order to comply with Connecticut law.  Mr. McDonald countered this argument stating that this legal procedure would require the court to essentially rewrite the non-compete contract, an act forbidden under Connecticut law.

The Court’s Decision

The court found in favor of USI with regard to the issue of the agreement’s enforceability with its holding stating, “taking the covenant as whole, nothing on the face of the contract renders the covenant unenforceable as a matter of law”.  While deliberating about the claim that the prohibition on potential clients was unreasonable, the court stated that there is no direction or precedent from the Connecticut Appellate Courts and that the Superior Courts throughout the state were divided on the issue.

This court took the approach used in Cuna Mutual Life Ins. Co. v. Butler (2007 Conn. Super. LEXIS 1623) that such limitations on potential clients are reasonable so long as they are “readily identifiable and narrowly defined”.  The court concluded that the potentially unlimited applicable duration of the agreement was not “per se unreasonable” because the agreement as a whole contained several other definitive restrictions such as the twenty-five mile radius from the Westport office and the limited group of clients for the anti-solicitation clause.


If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment agreement, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.