## Facts

- Prudential-Bache Securities, Inc. withdrew from the Puerto Rico market and terminated several senior executives, including José F. Rodríguez.
- Rodríguez claimed his employment agreement allowed termination only for just cause and that the withdrawal-based termination breached that agreement.
- Related employment disputes involving Rodríguez and other executives proceeded in New York Stock Exchange (NYSE) arbitration after the district court compelled arbitration and stayed the federal action.
- The NYSE panel conducted multiple hearings between February 1992 and December 1993.
- On January 7, 1994, the panel issued a monetary award for the executives, including $1,014,250 to Rodríguez, plus specified costs and attorney’s fees.
- Prudential petitioned in federal court to vacate the award, arguing it violated public policy and reflected manifest disregard of Puerto Rico Law 80, which Prudential asserted was the exclusive remedy for unjust discharge.
- Rodríguez moved to confirm the arbitration award and enter judgment on it.

## Issues

1. Whether the arbitration award should be vacated under the Federal Arbitration Act (FAA) for “manifest disregard of the law,” based on an alleged conflict with Puerto Rico Law 80.
2. Whether enforcement of the award was barred because it contravened an explicit, well-defined, and dominant public policy.
3. Whether other objections—arbitration discovery limits, attorney’s fees, and treatment of promissory notes and bonus payments—required vacatur or modification under the FAA.

## Decision

- The court denied Prudential’s petition to vacate the NYSE arbitration award.
- The court granted Rodríguez’s motion to confirm and entered judgment confirming the award.
- The court held Prudential failed to satisfy the narrow FAA standards for vacatur or modification.
- The court concluded the record did not show the arbitrators knowingly and intentionally disregarded controlling law, nor that the award violated any explicit, dominant public policy.
- The court rejected Prudential’s procedural and remedial challenges, deferring to the arbitrators’ management of the arbitration and damages determinations.

## Legal Principles

- Judicial review of arbitration awards under the FAA is highly deferential; courts do not reweigh evidence or correct ordinary legal or factual error.
- “Manifest disregard of the law” requires more than mistake; it requires proof the arbitrators knew a governing legal rule and deliberately ignored it.
- A public-policy challenge to an arbitral award requires identification of an explicit, well-defined, and dominant policy that enforcement would violate.
- Arbitrators have broad authority to manage procedure and award remedies submitted to them; discovery limits and contested damage components generally do not justify vacatur absent fundamental unfairness or excess of authority.

## Conclusion

The district court confirmed the NYSE arbitration award because Prudential did not meet the FAA’s narrow grounds for disturbing an arbitral decision, and neither Puerto Rico Law 80 nor asserted public-policy and procedural objections demonstrated manifest disregard, excess of authority, or a basis to refuse enforcement.


Rodriguez v. Prudential-Bache Sec., Inc., 882 F. Supp. 1202 (D.P.R. 1995)