Pending the outcome of the company’s appeal of a judge’s ruling denying arbitration. Wedbush Securities Inc. is asking a judge to put on hold a lawsuit filed by a former senior vice president who alleges that he was wrongfully terminated because he resisted pressure to release legal claims for wage theft penalties that were the subject of a separate lawsuit filed by a different former Wedbush employee.
On May 29, Los Angeles Superior Court Judge Kristin Escalante agreed with plaintiff Michael Stuart’s attorneys that even if the parties agreed to the terms of a 2011 agreement compelling arbitration, the accord was superseded by a January 2023 employment agreement that did not contain such a requirement.
“The agreement outlined plaintiff’s title, job duties, reporting structure and compensation, including benefits (but) there was no arbitration provision in the agreement,” the judge wrote.
After Stuart signed the amended employment agreement, Wedbush asked the plaintiff to sign a new arbitration agreement and he declined, the judge further wrote.
But in court papers filed with Escalante on Wednesday, Wedbush attorneys state that given that the company is appealing her rule, a stay pending an appellate court’s decision is warranted.
“A stay is consistent with the general principle that a trial court should not exercise jurisdiction over aspects of a case involved in an appeal,” the Wedbush attorneys state in their court papers. “Moreover, a stay is warranted to avoid prejudice and because the decision to deny arbitration was highly contested and a close call.”
Moreover, a stay will save both party and judicial resources, according to the Wedbush attorneys’ pleadings. A hearing on the Wedbush stay motion is scheduled Aug. 5.
According to his lawsuit, Stuart was hired in September 2002, as an associate in institutional equity sales and five years later was promoted to his final position of senior vice president of equity sales.
In March 2015, a former Wedbush employee filed a class-action and Private Attorneys General Act lawsuit against Wedbush alleging that the company, among other things, engaged in wage theft and that it failed to pay employees for overtime hours and for missed meal and rest periods.
The California Labor Code Private Attorneys General Act allows aggrieved employees to sue employers for Labor Code violations and recover civil penalties on behalf of the state.
In November 2020, a state appellate court held in the other matter that Wedbush’s commissioned employees, which included Stuart, were not subject to the administrative exemption under California law and were entitled to overtime pay and meal and rest periods. Stuart contends he did not receive overtime or meal and rest periods.
In April 2024, management asked Stuart and some of his colleagues to release their PAGA claims, telling Stuart it “would be helpful to the Wedbush family” to do so, but all of them eventually refused to do so, Stuart alleges. Then, in August of the same year, Wedbush gave Stuart and a colleague low bonuses despite strong job performances, according to Stuart’s suit.
Stuart and his co-workers who objected to the PAGA releases were all over 50 years old and had worked for Wedbush for more than 20 years when they were fired effective December 2024, the Stuart suit states. Stuart believes that Wedbush CEO Gary Wedbush wanted to get rid of the plaintiff and his colleagues because he considered them “disloyal,” according to the plaintiff’s suit filed Nov. 21.
Stuart is represented by attorney Genie Harrison, whose current clients include former Los Angeles Fire Dept. Chief Kristin Crowley in litigation against the city and Mayor Karen Bass. Harrison’s past clients include Tennie Pierce, a Black retired LAFD firefighter. In 2007, the City Council agreed to pay nearly $1.5 million to settle a lawsuit filed by Pierce, who was served a meal laced with dog food by his colleagues.