Earlier this week, the Third Circuit Court of Appeals ruled that former TD Ameritrade employee, Boris Khazin, must arbitrate his whistleblower claims instead of suing in court. Khazin, who worked in the firm’s compliance group, sued TD Ameritrade for retaliating against him as a whistleblower when he complained about alleged securities law violations. The issue before the court was whether Dodd-Frank’s ban on mandatory, pre-dispute arbitration agreements could be applied retroactively. Dodd-Frank was passed by Congress in 2010 in the wake of the financial crisis. In Khazin’s case, he signed an agreement in 2006, which stated that he was required to arbitrate employment-related claims through FINRA. The lower court compelled arbitration between TD Ameritrade, and Khazin subsequently appealed to the Third Circuit. The Third Circuit refused to expand Dodd-Frank’s whistleblower protections beyond its technical reading, and thus, affirmed the lower court’s decision.
This issue was a matter of first impression in the U.S Court of Appeals for the Third Circuit. Other circuits have been split on this question.