Morgan Stanley & Co. v. David Couch

MEMORANDUM

In 2007, Plaintiffs Morgan Stanley & Co. LLC and Morgan Stanley Smith Barney, LLC (together, “Morgan Stanley”) hired Defendant David Couch as a financial ad-visor. Upon his hiring, Couch signed an employment contract that included an agreement to arbitrate “any controversy or claim” arising out of his employment, “excluding statutory employment claims.”

In 2013, Morgan Stanley fired Couch. Couch sued Morgan Stanley, pleading vio lations of the California Labor Code and economic interference under California common law. The parties proceeded to litigate Couch’s claims on the merits for over a year. In 2015, after discovery had closed and mere days before summary judgment motions were due, Couch filed a separate set of claims with the Financial Industry Regulatory Authority (“FINRA”), a self-regulatory organization that often serves as an arbitration forum for financial sector disputes. In .response, Morgan Stanley filed this action for declaratory relief, arguing that by including the economic interference claims in his complaint, and then litigating those claims for more than a year, Couch had waived his arbitration rights under the employment contract. Morgan Stanley…