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Filing a Claim for Wrongful Termination under Financial Institutions Record, Recovery and Enforcement Act (FIRREA)

Gregory Saffer was employed by the now-failed Washington Mutual Bank (WaMu) and contended that the bank constructively discharged him in violation of public policy and breached their contract of employment agreements with him. He had not filed a claim with the FDIC by the deadline of December, 2008. As a result, the court held that he was not entitled to pursue the matter in arbitration due to failure to file the claim. This case reminds all of us to carefully mark and calendar due dates for administrative complaints (in the discrimination context, such as through claims with the California Department of fair Employment and Housing, it is called “exhaustion of administrative remedies”.)

After the arbitration (required by FIRREA for employee claims) was concluded, the arbitrator dismissed the matter and Saffer’s attorney petitioned the court to allow the case to move forward in court. On appeal, the court held that failure to file the claim was fatal and dismissed the case. The successor bank, Chase Manhattan Bank, was also relieved of liability since a FIRREA claim is necessary to successor liability. Additionally, the named individual defendants where released as it was clear to the court they were named in their role as employees and should have the benefit of the same claims procedures.

Its really unfortunate that the plaintiff was required to go through this entire arbitration process only to be told by the court that it was an “unauthorized” arbitration (by reason of failure to file that silly claim form). We would hope that in the future a process will be formulated to allow trial courts to rule early on as to the arbitrability of a California employee’s rights. Bottom line: Time limits to file claims are shorter than general state and federal statutes of limitation. Don’t rely on equitable tolling to replace a missed deadline!

Call us NOW if you have an issue regarding your securities industry employment, or any employment for that matter. Even employees not subject to FIRREA may well have a requirement to exhaust their administrative remedy with a state or federal agency prior to filing suit in court.