Wage Payment Claim
Tossed under Forum Selection Clause
Claim for Common Stock
Has to be Tried in Delaware
In Fabian v. BGC Holdings, LP, 2014 IL App (1st) 141576 a broker originally hired by Cantor Fitzgerald joined a spinoff in 2007 of Cantor. He signed an “Agreement of Limited Partnership” and under it claimed he was entitled to common stock based on his earning 100, 393 “founding partner units.” In March 2009 Fabian quit and filed an arbitration at the Chicago Mercantile Exchange, in which he was awarded $121,758 in commissions.
The issue in the case was not the commissions but his founding partner units, which his now former employer claimed he forfeited by going to work for a competitor.
Fabian sued in Cook County Circuit Court under the Illinois Wage Payment and Collection Act, seeking the liquidated value of the common stock, i.e., $860,856.35. BGC Holdings filed a motion to strike and a motion to dismiss, relying on a forum selection clause in the partnership agreement. Section 13.04 (“Jurisdiction and Forum; Waiver of Jury Trial”) provided that “all actions arising out of the agreement… shall be tried and determined exclusively in the state or federal courts in the State of Delaware…”
The circuit court granted the motion to dismiss with prejudice, and on appeal the First District Appellate Court agreed that the forum selection clause was controlling. Fabian had argued that the clause violated the public policy embodied in the wage payment law, but the appeals court rejected this argument. The court reasoned that forum selection clauses are favored in Illinois, the clause did not purport to limit the right to recover under the statute on the merits, and “contracts between businessmen….should be enforced by courts absent some compelling reason why they should not be enforced.”
However, on a technical application of the court rules, the appeals court sent the case back to the trial judge, reversing his order that the case was dismissed with prejudice as to the motion to strike. As a practical matter, this would be a procedural hoop that BGC easily jumps through.
Court decision at http://www.state.il.us/court/Opinions/AppellateCourt/2014/1stDistrict/1141576.pdf