The Financial Industry Regulatory Authority (FINRA) announced on January 25, 2012 that it fined brokerage house Merrill Lynch, Pierce, Fenner & Smith $1 million for requiring employees to resolve disputes relating to "retention bonuses" in New York state courts. The FINRA rules require its member firms and their employees to arbitrate such disputes in FINRA arbitration.
The SEC recently published a notice that the Financial Industry Regulatory Authority, Inc. ("FINRA") has proposed a rule change to its Code of Arbitration Procedure for Industry Disputes. The proposal would be a welcome change - the new rule would make collective actions ineligible for FINRA arbitration, just as class actions already are. With the rule change, employees who are registered with FINRA (e.g., stockbrokers, traders, and other employees working in securities businesses) will be able to file and participate in FLSA, ADEA, and EPA collective actions without the threat of being compelled to arbitrate their claims in FINRA's forum.
Most employees in the financial services industry work all year long to earn an annual bonus, which often represents a major portion of their total compensation for the year. Unfortunately, employees not protected by a contract or an offer letter that specifically calls for a bonus payment if and when terminated (even if before year end), will likely be out of luck this season, even if they worked an entire fiscal year.