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Barclays Capital Inc. v. Grady

United States District Court, D. Massachusetts

July 29, 2019

BARCLAYS CAPITAL INC., Petitioner,
v.
MATTHEW GRADY, Respondent.

          ORDER AND MEMORANDUM ON PETITION TO CONFIRM ARBITRATION AWARD (DOCKET NO. 10)

          TIMOTHY S. HILLMAN DISTRICT JUDGE.

         Following Matthew Grady's resignation from his employment at Barclays Capital Inc. (“BCI”), the parties submitted claims to an arbitration panel, BCI because it believed arbitration would be a more favorable forum, and Mr. Grady because he did not know he had a choice. BCI now moves for this Court to confirm the Award. Because the Court has not choice but to confirm the Award, it will do so. For the reasons stated below, BCI's petition is granted.

         Background

         In July 2011, Mr. Grady signed an Offer of Employment (“Offer Letter”) to accept a position as an investment representative at BCI. The Offer Letter provided Mr. Grady with the option to receive a personal loan of $900, 000 from an a BCI affiliate, Barclays Bank PLC (“Barclays Bank”). Mr. Grady accepted that loan to be forgiven in seven equal, annual installments as long as Mr. Grady remained employed by BCI. If his employment ended before the loan was repaid, Mr. Grady would then be obligated to pay the remaining principal as of the date of his termination, plus interest. Mr. Grady executed a Promissory Note in favor of Barclays Bank (the “Note”).

         The Offer Letter also provided the following:

Your obligations for the loan will be solely to [Barclays Bank] and will be independent of your employment with [BCI].
To be clear, [Barclays Bank] is not your employer and does not have any authority or control over any aspect of your employment or continued employment by Barclays, nor is the Bank a member of the Financial Industry Regulatory Authority (“FINRA”). Accordingly, any disputes between you and [Barclays Bank], including any disputes arising out of or relating to the loan, are not subject to FINRA arbitration but rather will be adjudicated in an appropriate court of law.

(Docket No. 44-1, at 3) (emphasis added). Further, the Offer Letter contained an arbitration agreement, which provided: “This arbitration agreement does not apply to any dispute that may arise between you and [Barclays Bank].” Id. at 4 (emphasis in original).

         Consistent with the Offer Letter, the Note contained an exclusive forum selection clause providing:

The Borrower expressly agrees that any and all actions to enforce the terms of this Note shall be litigated only in the state or federal courts sitting in the State and County of New York and in no other.

Id. at 8.

         On January 23, 2015, Mr. Grady resigned from Barclays, causing the unpaid principle balance of the loan-$514, 285.71-to become payable under the terms of the Note. Following Mr. Grady's resignation, Barclays Bank assigned the Note to BCI. See Id. at 11.

         Within one week of that assignment, on June 22, 2015, BCI filed a claim with FINRA, initiating arbitration to collect the outstanding principal balance, the tax withholding amounts owed by Grady, and accrued interest. Mr. Grady, without counsel, filed an answer and submitted counterclaims against Barclays. In March 2017, Mr. Grady participated in a two-day evidentiary hearing before a panel of three FINRA arbitrators, again without counsel. On March 29, 2017, that panel ...


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