The District of Columbia Court of Appeals heard arguments this morning in a dispute between K&L Gates and a former longtime partner at the firm, Robert Ted Parker, who sued the firm for wrongful termination.
The appeals court is weighing whether to uphold a ruling ordering the parties to arbitration. Parker filed his initial lawsuit in a California state court, but the firm filed a motion to compel arbitration in Washington, citing provisions in its partnership agreement.
Arguments today before an appellate panel came down to two issues – first, whether the partnership agreement was clear about which state's law to apply in determining whether a dispute should go to arbitration, and second, whether the D.C. court had jurisdiction to hear the appeal at all.
Parker, according to briefs, was an equity partner in the San Francisco office of K&L Gates. He was a partner at Preston Gates & Ellis for more than a decade before the firm merged with Kirkpatrick & Lockhart Nicholson Graham in 2007 to form K&L Gates. When the firms merged and Parker joined K&L Gates as an equity partner, he signed a supplement to the partnership agreement stating that he agreed to the terms.
In October 2009, Parker left the firm. The firm said Parker resigned, but he claimed in filings that he was essentially fired because the firm demanded his resignation. Parker alleged that the firm pushed him out by forcing him to drop a securities action against Lehman Brothers Holdings Inc., after Lehman offered the firm new business in exchange.
Parker sued the firm in Superior Court of California in San Francisco for wrongful termination, contract and tort claims, and age discrimination. Lehman denied wrongdoing and K&L Gates, citing a section of the partnership agreement that called for arbitration in Washington to resolve disputes relating to the agreement, moved to compel arbitration in District of Columbia Superior Court. A judge granted the motion and Parker appealed.
The appeals court focused today on whether the partnership agreement specified which state's law would govern disputes and arbitration. Parker argued that California law, which gives judges more discretion in compelling arbitration, should apply, since he lives and had worked there. The firm pointed to sections of the agreement that state arbitration should take place under Delaware law.
Judges Catharine Easterly and Roy McLeese III pressed Parker to explain why, if the agreement stated that arbitration should take place pursuant to the Delaware Uniform Arbitration Act, that law shouldn't also govern whether a judge could compel arbitration. Parker, who is representing himself, argued that although Delaware law might govern the arbitration, the agreement didn’t specify that it should govern decisions made before, such as whether to compel arbitration.
Parker said that it made sense for California law to apply because the case had the most connections to that state. Easterly noted that parties can choose any state's law they want to apply in a contract and that the court can't ignore that.
Zuckerman Spaeder partner Mark Foster, lead counsel for K&L Gates, maintained that there was no reason to choose California law because the agreement specified Delaware. Easterly noted that the trial judge decided the case under District of Columbia law, asking Foster whether that meant the trial judge made an error. Foster said it didn't matter because the laws were the same, so the result was the same.
McLeese asked whether the court could even hear the appeal, citing case law that an order on a motion to compel arbitration wasn't a "final" decision. Parker and Foster both cited the U.S. Supreme Court 2000 holding in Green Tree Fin. Corp. v. Randolph that such an order was final because it was an independent case and not "embedded" in other litigation, such as the California proceeding.
Parker, in his brief, also challenged the validity of the agreement and whether he was bound to it, but the court didn't address those issues during arguments.
Senior Judge John Ferren is also assigned to the case, but he was not in court. The parties were told at the start of the hearing that he would listen to arguments.