An attorney cannot use a clause in their shareholder agreement to compel arbitration in a lawsuit by their former law firm alleging that he performed unpaid legal work for a client with whom he had an undisclosed business interest.

The Superior Court ruled Thursday that the arbitration clause in Richard Perr’s shareholder agreement with Philadelphia-based Fineman, Krekstein & Harris did not extend to cover allegations that he violated his employment agreement. The judges were divided, however, on how the firm’s claims involving the employment agreement should proceed while its shareholder-related claims are in arbitration.