Wachovia Securities, LLC v. Brand, No. 10-2111

Decided Feb. 16, 2012

Former employees of a local Wachovia branch started a new office with a competitor company. Wachovia brought an arbitration action against the former employees claiming breach of contractual and common law duties: namely misappropriating confidential Wachovia information and stealing former Wachovia clients. The former employees responded by calling the matter frivolous and bringing several counterclaims; they did not, however, bring a claim for attorneys fees under South Carolina’s Frivolous Civil Proceedings Act. Toward the end of hearings, the arbitrators revisited the issue of attorneys’ fees and the employees finally made a claim for them under FCPA. Despite Wachovia’s objections and pleas of surprise, the panel rejected all Wachovia’s claims and awarded damages to the former employees—including attorneys’ fees under the FCPA.

The district court confirmed the award and rejected Wachovia’s arguments for vacatur, finding that the panel did not manifestly disregard the law, decide issues not before them, or fail to hold necessary hearings. On appeal, the Fourth Circuit affirmed. The court held that arbitrators have broad discretion when applying procedural rules of law not explicitly agreed to by the parties and that the panel appropriately handled the matter of attorneys’ fees with necessary fact finding and hearings.

Full Opinion

-C. Alexander Cable

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