District Judge Denise L. Cote
Wendt was BondFactor’s president. He and Fitzgerald were fired in 2013 after raising concerns CEO Butcher improperly spent BondFactor’s investor funds, and directed it pay a finder’s fee to an unlicensed broker-dealer. A Feb. 10, 2015, partial final arbitral award dismissed all claims against BondFactor and its co-defendants, except Fitzgerald’s claim for unpaid wages under New York’s Labor Law and his contract breach claim for unreimbursed expenses. A May 13 final award granted him attorneys’ fees. State Supreme Court denied Wendt vacatur, but found the arbitrator’s denial of his contract breach claim violated state public policy against forfeiture of earned but unpaid wages. Under governing New York law, District Court dismissed, as res judicata, Wendt’s and Fitzgerald’s whistleblower suit alleging retaliation under the Dodd-Frank Act. The arbitrator’s awards were final adjudications on the merits as to Fitzgerald. Because Wendt did not appeal the state court ruling affirming the arbitrator’s finding with respect to his retaliation and other claims, litigation over the retaliation claim was concluded. The facts supporting their Dodd-Frank retaliation claims were related in time, space, and origin to those adjudicated in arbitration.