## Facts

- Christian S. Gherardi began working for Citigroup Global Markets Inc. (Citigroup) as a financial advisor in 1996.
- His employment was governed by three written sources: a dual-employment agreement, Citigroup’s employee handbook, and the handbook’s employment arbitration policy (collectively, the employment documents).
- The employment documents repeatedly stated that Gherardi’s employment was “at will,” meaning either party could end the relationship at any time, with or without notice, for any reason or no reason.
- The handbook included an arbitration requirement directing covered employment disputes to arbitration.
- The handbook also included an anti-retaliation provision stating Citigroup would not retaliate against employees for filing employment claims.
- In 2015, Citigroup terminated Gherardi.
- Gherardi initiated arbitration against Citigroup asserting a wrongful-termination theory.
- Citigroup defended on the ground that, because the employment documents unambiguously established at-will employment, it had the contractual right to terminate Gherardi without cause.
- Gherardi argued the anti-retaliation provision could be read as an exception to at-will employment, and alternatively contended the documents were susceptible to interpretations that included implied terms negating at-will status.
- After a hearing and post-hearing submissions, the FINRA arbitration panel ruled for Gherardi on his wrongful-termination claim and awarded him substantial monetary relief.
- Citigroup filed an action in the Southern District of Florida to vacate the award under the Federal Arbitration Act (FAA), arguing the arbitrators exceeded their authority by disregarding the employment documents’ at-will language. Gherardi sought confirmation.

## Issues

1. Whether the FINRA arbitrators exceeded their powers under FAA § 10(a)(4) by awarding relief for wrongful termination despite unambiguous at-will provisions in the governing employment documents.
2. Whether Citigroup’s handbook anti-retaliation policy or alleged implied terms could reasonably be interpreted to limit Citigroup’s at-will right to terminate employment.

## Decision

- The court granted Citigroup’s request to vacate the arbitration award and denied confirmation.
- The court concluded the employment documents unambiguously established an at-will relationship permitting termination at any time, for any reason or no reason.
- The court found the anti-retaliation provision could not reasonably be read to negate or override the at-will terms reflected throughout the employment documents.
- Because the wrongful-termination award depended on a reading that conflicted with the clear at-will language, the court held the arbitrators exceeded their authority within the meaning of FAA § 10(a)(4).

## Legal Principles

- Courts review arbitration awards under the FAA with strong deference, but may vacate an award under § 10(a)(4) when arbitrators exceed the authority granted by the parties.
- An arbitrator exceeds that authority when the award is not grounded in a reasonable construction of the parties’ agreement and instead imposes obligations the contract cannot fairly be read to contain.
- When employment documents repeatedly and plainly provide for at-will employment, a tribunal may not treat general policy statements (including workplace policies) as creating job-security rights inconsistent with the at-will term, absent contractual language that actually modifies the at-will arrangement.
- An award must “draw its essence” from the parties’ contract; an award that effectively rewrites unambiguous contract terms is subject to vacatur under FAA § 10(a)(4).

## Conclusion

In *Gherardi v. Citigroup Global Markets Inc.*, the Southern District of Florida vacated a FINRA arbitration award because it concluded the arbitrators exceeded their FAA authority by granting wrongful-termination relief based on an interpretation of an anti-retaliation policy that could not be squared with the employment documents’ repeated, unambiguous at-will terms.


Gherardi v. Citigroup Global Markets Inc., Case No. 1:18-cv-20969-UU, 2018 U.S. Dist. LEXIS 236992 (2018)