Downs

Summary

Plaintiff Thomas L. Downs went to work for Prudential-Bache Securities, Inc. (Prudential-Bache), in December 1983. He signed an application and an employment agreement, both of which provide for arbitration of any disputes he might have with Prudential-Bache. The employment agreement requires arbitration under the rules of the New York Stock Exchange (NYSE); in the event the stock exchange declines to hear the matter, arbitration is required under the rules of the American Arbitration Association.

According to Downs’s complaint in September 1986, a dispute arose over trading Downs had performed for one of his clients, the Titus trust. Downs alleges that Prudential-Bache paid the trust $251,000 in losses the trust had incurred and in return received an assignment of the trust’s claims against Downs. Downs further alleges that Prudential-Bache planned to take its claims against him to arbitration before the NYSE. Downs also alleges that Prudential-Bache wrongfully terminated his employment.

In response to Downs’s complaint, Prudential-Bache moved for an order compelling arbitration of his claims before the NYSE, staying the superior court action and consolidating…