Palese v. Tanner Bolt & Nut

Alternative Dispute Resolution

, New York Law Journal


Judge Frederic Block

Palese sold his two businesses to Tanner Bolt & Nut Inc., which agreed to hire Palese for a five year term ending on May 31, 2015. A clause in Tanner's June 2010 employment agreement, required arbitration of all disputes arising from or in any way related to Palese's employment. The two June 2010 asset purchase agreements (APAs) contained identical "Governing Law Disputes" clauses calling for litigation in New York courts. The parties' relationship soured and Palese's employment ended in March 2012. Tanner stopped paying certain promissory notes. District court compelled arbitration of Palese's claims that in response to his objections to "constant racist, illegal and discriminatory" workplace conduct, Tanner retaliated against Palese by firing him, and in "further retaliation," stopped payment on the promissory notes. Contrasting the Seventh Circuit's decision in Rosenblum v. and informed by the Second Circuit's reasoning in Bank Julius Baer & Co. v. Waxfield Ltd., the court held the APAs' forum selection clause complementary to the arbitration clause. The parties must arbitrate their disputes, but to the extent Palese filed suit in a court in New York, Tanner would challenge neither jurisdiction nor venue.

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