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Arbitration Award Against Thelen Reid Is Upheld
New York Law Journal
October 15, 2007
A New York state judge has upheld a $450,000 arbitration award to a partner who claimed he was fired from the law firm now known as Thelen Reid Brown Raysman & Steiner in violation of an employment contract.
In August 2005, Lee A. Goldberg joined New York's Brown Raysman Millstein Felder & Steiner as an income partner pursuant to a two-year contract specifying he would earn a minimum of $400,000 in the first year and $425,000 in the second. He was fired in September 2006, shortly before the firm merged with Thelen Reid & Priest.
Thelen Reid argued in the subsequent arbitration that Goldberg, a patent litigator, was fired for cause and that he himself had breached his contract by failing to either bill or originate a sufficient amount of business. But the arbitrator, Stephen F. Ruffino of New York's Gibney, Anthony & Flaherty, found that the contract contained no language requiring Goldberg to meet any targets.
"I find that his sole duty was to be available to work," Ruffino wrote in his decision awarding $453,469, including attorney fees. "The record is clear that he was ready and willing to work and that he actively sought out billable work."
The arbitrator said Thelen Reid could have been "genuinely and completely disappointed" in Goldberg's performance but that the firm's "subjective opinion" could not be the basis for interpreting the contract.
But Thelen Reid urged Manhattan Supreme Court Justice Bernard Fried not to confirm the award on the grounds that, while there were no explicit billing requirements, Goldberg's 562 billable hours and $260,000 in client business clearly fell short of reasonable expectations.
"To suggest that Brown Raysman bargained for a million dollar space warmer is irrational on its face," Thelen Reid argued in court filings. "This is not an Agreement to pay an hourly wage to a store clerk who may be required to stand idle when business is slow. [Mr. Goldberg] was purportedly a multimillion-dollar originator with a duty to develop a practice. He was expected to bill more than a day a week. Brown Raysman did not agree, as he testified, to pay him $400,000 simply on the (albeit unstated) commitment that he would not 'goof-off.'"
But Fried ruled in Goldberg v. Thelen Reid Brown Raysman & Steiner, 650164/07, that the arbitrator's award had been "carefully reasoned" and should not be disturbed.
"The arbitrator rendered an award that considered the plain meaning of the operative words in the parties' agreements," the judge wrote.
Fried noted that Ruffino had reasonably considered evidence that Goldberg had not been hired as a rainmaker despite contractual language stating that he would be "responsible for developing and supervising" a patent litigation practice. The arbitrator discounted the significance of this language because it was also present in the contract of someone the firm had acknowledged to be a "service partner."
Ruffino's discussion of these issues "established a rational basis for the arbitrator's award," the judge said.
Thelen Reid also had objected to the arbitrator's award of attorney fees to Goldberg, as such fees are not provided for in the employment arbitration rules of the American Arbitration Association and were not specified in Goldberg's contract. But Fried said Ruffino also had a rational basis for awarding attorney fees, in part because Thelen Reid also had requested them in its answer to Goldberg's demand for arbitration.
Thelen Reid appeared pro se before Fried. Neither John C. Ohman, the partner handling the case, nor a firm spokesman returned calls seeking comment Friday.
Goldberg's lawyer, Jeffrey A. Jannuzzo, said his client, now a partner in the New York office of Israeli law firm Pearl Cohen Zedek Latzer, was told by former Brown Raysman managing partner Peter Brown that the firm had plenty of work that they just needed people to handle. Jannuzzo said Goldberg was also told that, if there was not enough patent litigation, he would be given general litigation cases to handle.
Another fired partner testified at the arbitration that Brown told him the same thing, said Jannuzzo.
