## Facts

- Robert Michael Fenyk worked for Raymond James Financial Services, Inc. (RJFS) for over seven years, operating a small Vermont branch as an independent contractor.
- The parties’ agreement designated Florida as RJFS’s principal place of business, required arbitration of disputes arising from the relationship, and selected Florida law to govern disputes.
- In May 2009, during review of client communications, RJFS discovered Fenyk sent a client an email discussing alcohol-related difficulties and sobriety efforts.
- RJFS supervisors in Florida decided to terminate Fenyk’s contract, citing concerns about supervising him remotely given sobriety-related risk.
- In 2011, Fenyk sued alleging termination based on sexual orientation and recovering-alcoholic status under Vermont’s Fair Employment Practices Act; after RJFS invoked arbitration, Fenyk dismissed the court action and proceeded in FINRA arbitration.
- In arbitration, Fenyk primarily presented claims under Vermont law; RJFS argued Florida law governed and that any Florida statutory claim would be time-barred.
- The arbitration panel applied Florida law and awarded Fenyk $600,000 in back pay for disability discrimination, treating Fenyk’s failure to plead a Florida statutory claim as a nonfatal labeling error.

## Issues

1. Whether arbitrators exceeded their powers under FAA § 10(a)(4) by awarding back pay on a Florida disability-discrimination theory not formally pleaded by the claimant.
2. Whether arbitrators exceeded their powers by declining to deny relief as time-barred under Florida’s limitations period after finding Florida law governed.

## Decision

- The First Circuit reversed the district court’s vacatur and ordered confirmation of the arbitration award.
- The court held the arbitrators did not exceed their powers because they resolved the discrimination dispute the parties submitted and were at least arguably applying the contract and governing law.
- Any error in recharacterizing the pleaded legal theory or addressing the statute of limitations was treated as, at most, legal error on the merits, not an ultra vires act under § 10(a)(4).

## Legal Principles

- Judicial review of arbitration awards under the FAA is highly deferential; an award cannot be vacated merely for legal error, even serious error.
- Under FAA § 10(a)(4), vacatur is limited to situations where arbitrators act outside the scope of their contractual authority or decide matters not submitted.
- Arbitrators may decide a dispute framed by the parties’ submissions even if the claimant imperfectly labels the governing statutory basis, particularly where the underlying factual theory was litigated and choice-of-law was contested.
- Statute-of-limitations defenses generally go to the merits of the dispute; an arbitrator’s handling of limitations does not, without more, show an excess of arbitral power.

## Conclusion

The First Circuit reinstated the FINRA award, holding that the panel acted within its authority under the arbitration agreement and the parties’ submissions when it applied Florida law and awarded back pay, and that alleged pleading and limitations errors did not justify vacatur under FAA § 10(a)(4).


Raymond James Fin. Servs., Inc. v. Fenyk, 780 F.3d 59 (1st Cir. 2015)