Legal News

Did the National Arbitration Forum Pander To ?Famous Parties??

By Nathan Koppel

Disgruntled former employees can be a litigious lot, but the National Arbitration Forum, one of the nation's largest arbitration firms, has been hit with a particular doozy of a suit from an ex-employee.

Deanna Richert, a former manager at the Forum, filed a federal suit claiming she was denied promotions and terminated last year because of her gender and age, which were, respectively, female and over 40.

Pretty standard fare so far, but Richert also busts out some heavy artillery, claiming that in its arbitrations, NAF fraudulently favored regular business clients, "who were referred to in-house as the 'Famous Parties.'"

Click here for NAF’s answer. In an email to the Law Blog, the organization responded:

The National Arbitration Forum categorically denies all of the claims made by Deanna Richert in her lawsuit, which is a classic case of a disgruntled terminated employee attempting to capitalize on recent negative PR and force a large settlement. She was terminated last year and had made no complaints during her five years of employment at the National Arbitration Forum, formal or otherwise, regarding the claims raised in her lawsuit. She has offered no proof in support of her allegations, and has not produced a single corroborating witness, including at an EEOC mediation. . . . The FORUM takes all allegations against the National Arbitration Forum, its arbitrators, other employees, and the arbitration process very seriously.

According to Richert's complaint, NAF employees allegedly did a lot of nice stuff for the so-called F.P's, including:

• instructing arbitrators to change decisions they had issued that were adverse to the Famous Parties;
• ensuring that arbitrators who had ruled against the FP's did not get more cases;
• drafting claim forms for the FP's.

NAF has been in the spotlight before. It has been sued by the San Francisco city attorney for allegedly favoring repeat business clients (click here for an LB post) and it was the subject of this BizWeek article which claimed that NAF repeatedly favored banks over consumers.

In a previous statement to WSJ, NAF said: "The National Arbitration Forum's independent case administration and neutral decision makers constitute a system that satisfies or exceeds objective standards of fairness. Our arbitration program has been supported in all courts in which it has been reviewed."

Full post as published by Law Blog - WSJ.com on May 19, 2009 (boomark / email).