The trial court's decision granting the defendant's motion to compel arbitration and stay the case pending FINRA arbitration was affirmed on appeal. The court found that the parties' claims arose out of business activities under FINRA Rule 13200 and were subject to mandatory arbitration.
Excerpt
Arbitration motion to stay proceedings FINRA Rule 13200 contract interpretation. Parties disagree whether dispute arising out of contract dissolving Appellee's membership and employment arises out of their business activities making it subject to mandatory arbitration under FINRA Rule 13200. Given the strong preference for arbitration and the rather broad definition of "business activities," the trial court did not err in finding that all of Appellants' claims were subject to arbitration. Additionally, the forum-selection clause in the parties' contract did not supersede the arbitration provisions already binding the parties.
What This Ruling Means
# Cedar Brook Financial Partners Holdings v. Schlang
**What Happened**
An employee named Schlang worked for Cedar Brook Financial Partners Holdings and had a contract that included an arbitration clause. When the company ended Schlang's employment and membership, a dispute arose. Schlang sued the company in court, claiming breach of contract and fraud. The company asked the court to stop the lawsuit and send the dispute to arbitration instead—a private process outside the court system—based on their contract.
**What the Court Decided**
The court agreed with the company. It ruled that the dispute directly related to their business activities and fell under the mandatory arbitration rules (FINRA Rule 13200) in their contract. The lawsuit was dismissed, and the case was sent to private arbitration instead.
**Why This Matters for Workers**
This case shows that courts generally enforce arbitration agreements in employment contracts. If your employment contract includes an arbitration clause, you may not have the right to sue your employer in court. Instead, disputes go to private arbitration—a process with fewer protections than the court system, less public transparency, and limited appeal options.
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