Salomon Smith Barney is backing away from tough language in its new employee handbook that sought to restrict arbitration awards (see RR, July 1999, Page 24).
The handbook, made available to reps in April, said NASDR arbitrators could not award punitive or exemplary damages except where provided for by law. The NASDR has no such restriction.
In May, Cliff Palefsky, chair of the National Employment Lawyers Association's Securities Industry Arbitration Committee, complained about SSB's policy to George Friedman, NASDR's director of the Office of Dispute Resolution. Friedman contacted SSB. In late June, the firm agreed that any conflict between the NASDR's rules and SSB's policy "shall be resolved in favor of the NASD's rules particularly with regard [to] but not limited to the allocation of fees/costs and the authority of arbitrators," according to a letter sent to Friedman by Eugene Clark, SSB's senior vice president and director in the general counsel's office.
An SSB spokesperson says, "The letter speaks for itself." A spokesperson for the NASDR had no comment.