The Securities and Exchange Commission (SEC) has published a proposed rule applicable to arbitrations conducted by the Financial Industry Regulatory Authority, Inc. (FINRA). See 77 Fed. Reg. 1773. The rule would preclude collective action claims by employees of FINRA members brought under the Fair Labor Standards Act, the Age Discrimination in Employment Act or the Equal Pay Act of 1963 from being arbitrated in a FINRA forum.
In collective actions, unlike class actions, an individual must affirmatively consent or "opt-in" to become a member of the collective action to benefit from the outcome. Absent members (those who do not opt-in) are not precluded from pursuing their claims in other forums. FINRA has expressed the view that once a collective action has been granted, the claims in dispute are administered like a class action and therefore would be precluded from arbitration in FINRA's forum. FINRA further believes that class actions should be handled through the judicial forum, which has procedures to manage such claims.
Responses to the SEC notice should be submitted on or before February 1, 2012.
Please see full alert below for more information.
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.