Tong v. S.A.C. Capital Management, LLC

16 Misc. 3d 401
CourtNew York Supreme Court
DecidedMay 17, 2007
StatusPublished
Cited by8 cases

This text of 16 Misc. 3d 401 (Tong v. S.A.C. Capital Management, LLC) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tong v. S.A.C. Capital Management, LLC, 16 Misc. 3d 401 (N.Y. Super. Ct. 2007).

Opinion

OPINION OF THE COURT

Bernard J. Fried, J.

Defendants have moved to compel plaintiff Andrew Z. Tong to arbitrate his discrimination claims under an arbitration clause in an agreement he signed upon beginning his employment at defendant S.A.C. Capital Management, LLC (SAC), and to stay litigation pending the arbitration, pursuant to CPLR 2201, 7501 and 7503. For the reasons that follow, I grant defendants’ motion and stay the action pending the outcome of arbitration.

Tong’s allegations are based on events that took place while Tong was recruited for employment as an analyst/trader for defendants from August 2005 until his termination, which became effective on April 10, 2006. Defendants do not dispute the facts as alleged by plaintiff for purposes of this motion.

According to documents submitted by plaintiff, Tong is a 37-year-old, married, Chinese man. Between 1992 and 1994, Tong pursued a Ph.D. in computer science at Columbia University. In 1994, he took a leave of absence for family reasons, after receiving his Master’s degree. Tong went to work at Bear Stearns, and later at Fuji Bank. (Notice and omnibus cross motion, exhibit S.) In this capacity, Tong worked in financial risk management and gave presentations in Virginia, New York, and Canada about artificial intelligence, which were related to his graduate work in computer science.

[403]*403Tong first met defendant Ping Jiang in 1998, when they were both working in the emerging markets department of Lehman Brothers, Inc. Jiang was Tong’s professional reference when Tong left Lehman in 2001 to join Stark Investments, Inc., in Mequon, Wisconsin. Over the next four years, the two men stayed in touch and occasionally socialized.

In early 2005, Jiang telephoned Tong and told him that he had taken a job at a private asset management firm called SAC and would like Tong to join his emerging markets macro trading group there. Between May and early July of 2005, Tong spoke to Jiang and expressed his interest in joining him at SAC. In early-to-mid-July, Jiang told Tong over the phone that he was offering him a job that would include a minimum salary of at least $250,000, and could shortly become considerably more profitable. Jiang told Tong that he would be trading stock indexes, currencies, and interest rates. Tong accepted the job offer over the phone soon afterward. Jiang then told Tong that he would have to demonstrate his commitment to Jiang and SAC by resigning from his current position and moving to New York as soon as possible. Tong complied and made a trip to New York. On July 24, Tong met with Jiang both alone and with other members of Jiang’s group. Jiang told Tong about his top secret training philosophy, which was to include a program of strict confidentiality and the elimination of Tong’s alleged personality flaws by requiring him to wear certain kinds of clothing at work.

In mid-August 2005, when Tong had still not received a formal job offer, Jiang asked Tong to come to New York permanently and begin work. Tong arrived in New York on August 18, 2005 and reported to Jiang for work the next day. On August 19, Jiang showed Tong a faxed copy of an offer letter from SAC; his employment was officially to begin on September 1, 2005. Unofficially, Tong began work immediately.

On August 26, Tong was given SAC’s statement of policies and code of ethics and conduct and an offer letter offering him a position as analyst/trader. The letter states that it is “also contingent upon ... (3) your signing an agreement Regarding Conditions of Employment, which includes an arbitration agreement.” (Offer letter at 3.) Tong was also given the “Agreement Regarding Conditions of Employment,” which was a contract dated August 17, 2005 between himself and SAC.

The agreement states: “WHEREAS, as a condition of employment with [SAC], [plaintiff] ha[s] agreed to accept the terms and conditions set forth herein.” (Kheel affidavit I, exhibit C at

[404]*4041.) Among its conditions, the agreement provides that Tong would not disclose any of SAC’s confidential information during or after his employment. (Id. 11 2.2.) This information was defined to include any “information relating to the business and personal affairs of” any of the principals and employees of SAC. (Id. If 1.) The agreement also provides that Tong “shall not, without SAC Capital’s prior written consent, discuss with the media (which includes any national or local newspaper, magazine, radio and/or television station) any matter related to SAC.” (Id. If 3.4 [a].) It further provides that Tong “agree[s] to act in good faith so as not to harm the business reputation of SAC in any way, which includes ... a promise [not to] defame or publicly criticize the services, business, integrity, veracity or reputation of SAC or its employees in either a professional or personal manner.” (Id. If 3.4 [b].)

In a provision entitled “Arbitration,” the agreement states in capital letters:

“EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THE PARTIES AGREE THAT ANY DISPUTE OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE INTERPRETATION THEREOF, AND/OR THE EMPLOYMENT RELATIONSHIP SHALL BE SETTLED BY ARBITRATION IN ACCORDANCE WITH THE RULES, THEN IN EFFECT, OF THE AMERICAN ARBITRATION ASSOCIATION COMMERCIAL ARBITRATION RULES.

The agreement is to “be governed by the laws of the State of New York.” (Id. K 7.2.)

Before signing the agreement, Tong asked Jiang about the arbitration provision. Jiang said to him dismissively that it was “standard language,” that Tong could not get fired no matter what, and that he would be paid for two years. (Tong affidavit 11 37.) Jiang assured Tong that he was well protected in the terms of his employment package. Tong signed the documents because he regarded Jiang as his mentor and he believed and relied upon him.

After signing the offer letter, the agreement, and other related personnel documents, Tong went back to Wisconsin on September 2, 2005 to finish packing. Tong returned to New York on September 7, 2005 and moved into his new apartment near the offices of SAC. On September 9, 2005, Tong reported back to Jiang, ready for work.

[405]*405From the fall of 2005 until his termination by SAC, which became effective on April 10, 2006, Tong was allegedly subjected to sexual harassment, a hostile work environment, discrimination, and retaliation by defendants.

In November 2006, plaintiff forwarded defendants a draft complaint to facilitate settlement discussions. The parties explored settlement, pursuant to an informal agreement and later a formal standstill agreement, according to which the parties agreed not to begin litigation before January 11, 2007. When that agreement expired, in January 2007, plaintiff served on defendants a summons with notice, which was followed on March 7, 2007 by a complaint.

Plaintiffs complaint alleges discrimination (quid pro quo and hostile work environment), harassment, and retaliation, by all defendants, based on his gender, sex, sexual orientation, race, and national origin, under the New York State Human Rights Law (Executive Law § 296 [6]) and the New York City Human Rights Law (Administrative Code of City of NY § 8-107 [6]).

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16 Misc. 3d 401, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tong-v-sac-capital-management-llc-nysupct-2007.