Court Opinion

ID: 2963815
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:15:33.326018+00
Date Added: 2024-06-11T11:42:46.492572
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 95-1590

                          PRUDENTIAL-BACHE SECURITIES, INC.,

                                Plaintiff - Appellant,

                                          v.

                              ROBERT D. TANNER, ET AL.,

                               Defendants - Appellees.

                                 ____________________

          No. 95-1591

                              JOSE F. RODRIGUEZ, ET AL.,

                               Plaintiffs - Appellees,

                                          v.

                          PRUDENTIAL-BACHE SECURITIES, INC.,

                                Defendant - Appellant.

                                 ____________________

          No. 95-1592

                          PRUDENTIAL-BACHE SECURITIES, INC.,

                                Plaintiff - Appellee,

                                          v.

                              ROBERT D. TANNER, ET AL.,

                               Defendants - Appellants.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF PUERTO RICO

                   [Hon. Salvador E. Casellas, U.S. District Judge]
                                               ___________________

                                 ____________________

                                        Before

                               Torruella, Chief Judge,
                                          ___________

                           Campbell, Senior Circuit Judge,
                                     ____________________

                                 and Watson,* Judge.
                                              _____

                                _____________________

               Thomas  F. Curnin, with whom Roy L. Regozin, Cahill Gordon &
               _________________            ______________  _______________
          Reindel, Guillermo J.  Bobonis, Carlos Bobonis-Gonz lez, Bobonis,
          _______  _____________________  _______________________  ________
          Bobonis & Rodr guez-Poventud, Louis  J. Scerra, Jr. and Goldstein
          ____________________________  _____________________     _________
          &  Manello,   P.C.  were  on  brief   for  Prudential  Securities
          __________________
          Incorporated.
               Jos  Angel  Rey, with  whom Jos  Luis  Gonz lez-Casta er and
               _______________             ____________________________
          Harold D. Vicente  were on brief for Robert D. Tanner, et al.
          _________________

                                 ____________________

                                  December 29, 1995
                                 ____________________

                              
          ____________________

          *   Of the United States Court of International Trade, sitting by
          designation.

                                         -2-

                    TORRUELLA,   Chief   Judge.      Appellant   Prudential
                    TORRUELLA,   Chief   Judge.
                                 _____________

          Securities  Incorporated,  formerly Prudential-Bache  Securities,

          Inc. ("Prudential"), seeks the reversal of a judgment, entered in

          two consolidated actions,  confirming arbitration awards  entered

          by a  panel of New  York Stock  Exchange arbitrators in  favor of

          Jos   F.  Rodr guez   ("Rodr guez"),  Robert  Tanner  ("Tanner"),

          Garland Hedges  ("Hedges"), Wolfram  Pietri ("Pietri"), and  Jos 

          Cimadevilla  ("Cimadevilla"),  former  employees of  Prudential's

          subsidiary  in  Puerto  Rico,  Prudential-Bache  Capital  Funding

          Puerto  Rico, Inc.  ("PBPR").  Prudential  argues that  the award

          should be vacated  on either  of two  grounds:   first, that  the

          arbitration award  was in manifest  disregard of Puerto  Rico Law

          80;  and  second,   that  it  went  against  a  well-defined  and

          established   public  policy  requiring   that  securities  firms

          maintain  accurate and  current books  and records.   However, we

          find that Prudential neither meets the  standard for the vacation

          of an  award on the  grounds of  manifest disregard,  set out  in

          Advest,  Inc.  v.  McCarthy, 914  F.2d  6  (1st  Cir. 1990),  nor
          _____________      ________

          demonstrates  that the  arbitration  panel found  that  appellees

          acted  against  public  policy.   Since  its  argument  that  the

          district  court  erred  in  refusing  to  vacate  the  awards  of

          attorney's fees and costs  also fails, we affirm the  judgment of

          the court below on all points.

                                      BACKGROUND
                                      BACKGROUND

                    The  arbitration  underlying  this  case  arose out  of

          Prudential's decision  to close  its Puerto Rican  subsidiary and

                                         -3-

          terminate the employment of  several executives assigned to PBPR.

          On  December  29,  1990,  Rodr guez, former  President  of  PBPR,

          together with his wife and their conjugal partnership, filed suit

          against   Prudential,  seeking  compensation  for  his  allegedly

          wrongful  discharge.    Appellant  Prudential  moved  to   compel

          arbitration, and the lower court stayed all discovery and ordered

          the  parties  to  proceed  with  the arbitration  of  all  claims

          pertaining  to Rodr guez.    The claims  of  his wife  and  their

          conjugal  partnership  were   stayed  pending  the  arbitration's

          outcome.   Meanwhile,  the claims of  Tanner, Hedges,  Pietri and

          Cimadevilla,  all  also  former  PBPR  executives,  were  brought

          directly through arbitration.

                    An arbitration  panel appointed  by the New  York Stock

          Exchange  heard the  parties'  claims between  February 1992  and

          December 1993.  On  January 7, 1994, the panel  issued its award,

          under which  Prudential was  to pay Tanner  $1,028,000, Rodr guez

          $1,014,250, Hedges  $312,750,  Pietri $310,750,  and  Cimadevilla

          $216,025.  Various amounts in costs and attorney's fees were also

          awarded.   When Rodr guez moved  the district court  for entry of

          judgment  on the award, Prudential filed a petition to vacate the

          arbitration award  as against all  claimants on the  grounds that

          (1) the award  was against public  policy; (2)  the award was  in

          conflict with Puerto  Rico Law  80; (3) the  award of  attorney's

          fees was contrary to  law; (4) the arbitrators improperly  denied

          Prudential   the  opportunity  to   conduct  discovery  into  the

          claimants' financial position and current earnings; (5) the award

                                         -4-

          failed to properly  record the decision  of the arbitrators  that

          Prudential  was not  responsible for  promissory notes  issued by

          Tanner  and Rodr guez to their employees at Prudential in lieu of

          cash bonuses;  and  (6)  the award  incorrectly  noted  that  the

          arbitrators ordered that appropriate shares of the  bonus were to

          be paid to claimants.  They

          contest the district court's findings on the first three of these

          issues on appeal.

                                    DISCUSSION    
                                    DISCUSSION

                                A.  Standard of Review
                                A.  Standard of Review
                                    __________________

                    As  the  Supreme  Court  recently  stated,  "courts  of

          appeals  should  apply  ordinary,  not  special,  standards  when

          reviewing district court decisions upholding arbitration awards."

          First Options of Chicago, Inc. v. Kaplan, ___  U.S. ___, ___, 115
          ______________________________    ______

          S.  Ct.  1920, 1926,  131 L.Ed.2d  985  (1995).   Accordingly, we

          accept findings of fact that are not clearly erroneous and decide

          questions of law de novo.  Id., 115 S. Ct. at 1926.  
                           __ ____   ___

                    However, our  discussion does  not end there.  "We must

          consider,   of  course,   the   district  court's   standard   of

          review . . . ."   Kelley v.  Michaels, 59  F.3d 1050,  1053 (10th
                            ______     ________

          Cir.  1995).    When  a  district  court  faces  an  arbitrator's

          decision,  "the court will set  that decision aside  only in very

          unusual circumstances."  First Options, 115 S. Ct. at 1923.   The
                                   _____________

          first set  of "unusual  circumstances" are  laid  out in  Section

                                         -5-

          10(a)  of the Federal Arbitration  Act ("FAA"), 9  U.S.C.   10(a)

          (1994).1  See Gateway  Technologies v. MCI Telecommunications, 64
                    ___ _____________________    ______________________

          F.3d 993, 996 (5th Cir.  1995) (laying out the scope of  judicial

          review  of arbitration awards in  the light of  First Options and
                                                          _____________

          the FAA).  

                    Prudential relies on a second, narrower, set of grounds

          for review, established  by case law  for "manifest disregard  of

          the  law."   See  Wilko  v. Swan,  346  U.S.  427, 436-37  (1953)
                       ___  _____     ____

          (creating the exception), overruled on other grounds by Rodr guez
                                    _____________________________ _________

          de Quijas v. Shearson/American Express, Inc., 490 U.S. 477,  484-
          _________    _______________________________

          85   (1989);  Advest,  914  F.2d  at  9  n.5  (noting  that  this
                        ______

          judicially-created method  of review is  based on dicta  in Wilko
                                                                      _____
                              
          ____________________

          1   Section 10(a) provides that a court may vacate an award:

                         (1)  Where the  award was  procured by
                      corruption, fraud, or undue means.
                         (2)      Where   there   was   evident
                      partiality    or   corruption    in   the
                      arbitrators . . . .
                         (3)  Where the arbitrators were guilty
                      of misconduct in refusing to postpone the
                      hearing, upon sufficient cause  shown, or
                      in  refusing  to hear  evidence pertinent
                      and  material to  the controversy;  or of
                      any other misbehavior by which the rights
                      of any party have been prejudiced.
                         (4)    Where the  arbitrators exceeded
                      their powers, or so  imperfectly executed
                      them  that a mutual,  final, and definite
                      award upon the  subject matter  submitted
                      was not made.
                         (5)  Where an award is vacated and the
                      time within which the  agreement required
                      the award to be  made has not expired the
                      court  may, in  its discretion,  direct a
                      rehearing by the arbitrators.

          9 U.S.C.    10(a) (1994); see Advest, 914 F.2d at 8 (stating that
                                    ___ ______
            10 "carefully limits judicial intervention").

                                         -6-

          and  not  found  in    10).    The test  for  a  challenge  to an

          arbitration award for manifest disregard of the law is set out in

          Advest, Inc. v. McCarthy:
          ____________    ________

                      a successful challenge . . . depends upon
                      the challenger's ability to show that the
                      award is  "(1)  unfounded in  reason  and
                      fact;  (2) based on reasoning so palpably
                      faulty that no judge, or group of judges,
                      ever  could conceivably have  made such a
                      ruling;  or (3)  mistakenly  based  on  a
                      crucial assumption that  is concededly  a
                      non-fact."

          Advest,  914 F.2d  at 8-9  (quoting Local  1445, United  Food and
          ______                              _____________________________

          Commercial Workers v. Stop & Shop Cos., 776 F.2d 19, 21 (1st Cir.
          __________________    ________________

          1985)). 

                  B.  Timeliness of Prudential's Petition to Vacate
                  B.  Timeliness of Prudential's Petition to Vacate
                      _____________________________________________

                    Before  addressing Prudential's arguments, we examine a

          threshold issue appellees raise:   whether Prudential's  petition

          to vacate was timely.  Appellees argue that Prudential's petition

          is governed by  Rule 627(g) of  the Rules of  the New York  Stock

          Exchange  ("NYSE"),  which  they  maintain establishes  a  30-day

          period for filing petitions  to vacate.2  Since the  petition was
                              
          ____________________

          2  The Rule states:

                      All  monetary awards shall be paid within
                      thirty  (30)  days  of receipt  unless  a
                      motion  to vacate has  been filed  with a
                      court  of  competent  jurisdiction.    An
                      award shall  bear interest from  the date
                      of  the award:   (i)  if not  paid within
                      thirty  (30) days of receipt, (ii) if the
                      award  is  the  subject  of a  motion  to
                      vacate  which  is  denied,  or  (iii)  as
                      specified  by  the  arbitrator(s) in  the
                      award.  Interest shall be assessed at the
                      legal  rate, if  any, then  prevailing in
                      the state where  the award was  rendered,

                                         -7-

          filed  on March 9,  1994,  sixty-one  days  after the  award  was

          issued,  under appellees'  reading of  Rule 627(g),  Prudential's

          petition  would be time-barred.  In  turn, Prudential claims that

          its petition is governed by the 90-day period  set out in   12 of

          the FAA,  9 U.S.C.    12 (1994),3 and  so is  timely.  The  court

          below found that Section 12 of the FAA applies,  and the petition

          is not time-barred.  We affirm.

                    Appellees make  their argument  in two stages.   First,

          they maintain  that, since parties  may agree to  arbitrate under

          non-FAA rules,4  and the  parties submitted a  Uniform Submission

          Agreement to  the NYSE  providing that  the arbitration  would be

          conducted in  accordance with the  rules of the  exchange,5 those
                              
          ____________________

                      or at a rate set by the arbitrator(s).

          2 New York Stock Exchange Guide, Rule 627(g) (1989).

          3  The Rule states, in pertinent part:

                      Notice of a  motion to vacate,  modify or
                      correct an award must be  served upon the
                      adverse  party  or  his  attorney  within
                      three months after the award is  filed or
                      delivered.

          9 U.S.C.   12 (1994).

          4   See Mastrobuono v. Shearson Lehman Hutton, ___ U.S. ___, ___,
              ___ ___________    ______________________
          115 S. Ct.  1212, 1216, 131 L.Ed.2d  76 (1995) (noting  that "the
          FAA's pro-arbitration  policy does not operate  without regard to
          the  wishes of  the contracting  parties"); Volt  Info. Sciences,
                                                      _____________________
          Inc. v. Board of Trustees, 489 U.S. 468, 479 (1989) ("Arbitration
          ____    _________________
          under the Act  is a matter of consent,  not coercion, and parties
          are generally  free to structure their  arbitration agreements as
          they see fit").

          5  Each appellee  signed an Employment Agreement  with Prudential
          that  contained an arbitration clause.   The clause provided for,
          inter alia,  settlement of all claims  arising between Prudential
          _____ ____
          and  its  employees  through  arbitration  under  the  prevailing

                                         -8-

          rules  trump the FAA.   Second, they  argue that Rule  626(g), by

          requiring payment of the award within 30 days of its receipt if a

          motion  to vacate has not been filed, compels the conclusion that

          any  challenge to an arbitration  award must be  filed within the

          same period. 

                    We are not convinced, however.  We do not question that

          the  NYSE Rules  apply.  Where  parties agree  to a  set of rules

          different than those of the FAA, "enforcing those rules according

          to the terms of the agreement is fully consistent with  the goals

          of  the FAA,  even if  the result  is that arbitration  is stayed

          where the Act  would otherwise permit it  to go forward."   Volt,
                                                                      ____

          489 U.S. at  479.  While we agree  with appellees' first premise,

          however, we do not subscribe to their second one.

                    Appellees seek to find a time limit in Rule 627(g) that

          it does  not include.   To  support  their reading  of the  rule,

          appellees  argue  that it  is  meant  to  operate  as a  stay  of

          execution for the period during which the party may challenge the

          award.  In that context,  they maintain it would be  senseless to

          allow such  a stay  for only  30 days  if  the period  to file  a

          petition to  vacate is to be governed by the 90-day period of the

          FAA, as the award would be  subject to enforcement during the  60

          days following the  expiration of  the stay.   While their  logic

          holds some merit, they  cannot escape the  fact that the text  of
                              
          ____________________

          Constitution  and  Rules  of  the NYSE.    Also,  the  Submission
          Agreement which the parties  filed with the NYSE shows  that they
          submitted their  dispute to  arbitration in accordance  with that
          body's Rules, Constitution, By-laws, Regulations, and/or Code  of
          Arbitration.

                                         -9-

          the Rule  is clear.  As  stated by the court  below, "[t]he plain

          language of Rule 627(g) . . . does  not even address the question

          of  a  time  limitation  on  motions  for  vacatur,   but  rather

          establishes  when awards are to be paid and the precise moment at

          which interest begins to  accrue on unpaid amounts of  an award."

          Rodr guez v. Prudential-Bache Sec., Inc., 882 F. Supp. 1202, 1206
          _________    ___________________________

          (D.P.R. 1995).   We are unwilling  to read a time  limit into its

          language. 

                    In  contrast, the  text of  Section 12  is unambiguous,

          clearly setting out a 90-day time limit.  Since the  Rules of the

          NYSE provide no time limit, we find that the FAA 90-day provision

          applies,  and appellant's  petition  is timely.   See  Escobar v.
                                                            ___  _______

          Shearson Lehman Hutton, Inc., 762 F. Supp. 461, 463 (D.P.R. 1991)
          ____________________________

          ("A  party who seeks judicial review of an arbitration award must

          comply with the notice requirements of  section 12 . . . ."); cf.
                                                                        ___

          Franco  v. Prudential  Bache  Sec., Inc.,  719  F. Supp.  63,  64
          ______     _____________________________

          (D.P.R. 1989)  (finding motion  to overturn an  arbitration award

          untimely for  failure to petition within 90-day period of   12). 

                          C.  Manifest Disregard of the Law
                          C.  Manifest Disregard of the Law
                              _____________________________

                    As stated  above, judicial review of arbitration awards

          is available  where arbitrators have acted  in manifest disregard

          of the law.  See Wilko, 346 U.S. at 436-37.  As this court stated
                       ___ _____

          in Advest,  Inc. v. McCarthy,  arbitration awards are  subject to
             _____________    ________

          review "where it  is clear  from the record  that the  arbitrator

                                         -10-

          recognized the  applicable law--and then ignored it."6   914 F.2d

          at 9.

                    Prudential argues that this is such a case.  It asserts

          that  appellees   were   terminated  for   "just   cause"   under

          Commonwealth Law  80,  which sets  out the  remedy for  employees

          under   contracts  without  fixed  duration  who  are  wrongfully

          discharged.   29  L.P.R.A.   185a  (Supp. 1991).   Law 80 details

          what  constitutes just  cause for  discharge, including  "[f]ull,

          temporary   or  partial   closing  of   the  operations   of  the

          establishment."  29 L.P.R.A.   185b(d) (Supp. 1991).  It provides

          an  exclusive remedy.7   See  Alvarado-Morales v.  Digital Equip.
                                   ___  ________________     ______________
                              
          ____________________

          6  We emphasize  that this is a narrow basis for  review:  a mere
          mistake of law  by an  arbitrator cannot serve  as the basis  for
          judicial review.  We  have long recognized the general  rule that
          "courts  are  not to  review the  merits  of an  arbitral award."
          Challenger Caribbean Corp. v.  Uni n General de Trabajadores, 903
          __________________________     _____________________________
          F.2d 857, 861 (1st  Cir. 1990).  They "do not sit  to hear claims
          of factual or  legal error by an arbitrator as an appellate court
          does in reviewing decisions of lower courts."  Misco, 484 U.S. at
                                                         _____
          38.   Thus  our  review is  circumscribed  by the  provisions  of
          Section 10(a)  and the specifications of  the "manifest disregard
          of the law" test laid out by this court in Advest.
                                                     ______

          7  While "[t]here is no question that Act No. 80 is the exclusive
          remedy for  wrongful discharge  in  Puerto Rico,"   Weatherly  v.
                                                              _________
          International  Paper Co.,  648 F.  Supp. 872, 875  (D.P.R. 1986),
          ________________________
          three  exceptions exist to the  rule that Law  80 precludes other
          civil actions  against an  employer who wrongfully  terminates an
          employee.  They  arise (1)  when a plaintiff  has an  independent
          cause  of action  for  a  tort committed  in  the  course of  the
          discharge,  Vargas v. Royal Bank  of Canada, F.  Supp. 1036, 1039
                      ______    _____________________
          (D.P.R.  1985); (2) when a plaintiff is protected by other social
          legislation, Weatherly,  648  F. Supp.  at 877  n.8 (listing  the
                       _________
          twelve  statutes that provide remedies for employment termination
          alongside  Law  80); and  (3)  when  the plaintiff's  termination
          violates  his or  her constitutional  rights, In  re El  San Juan
                                                        ___________________
          Hotel Corp., 149 B.R.  263, 273 (D.P.R. 1992); Santini  Rivera v.
          __________                                     _______________
          Serv. Air, Inc., 94 JTS 121 (Hern ndez Denton, J., concurring).
          _______________

             This is not to say, however, that the parties to an employment

                                         -11-

          Corp.,  843 F.2d  613,  615  n.1  (1st  Cir.  1988)  (noting  the
          _____

          exclusiveness of the remedy for wrongful constructive discharge);

          Rodr guez v. Eastern  Air Lines,  Inc., 816 F.2d  24, 27-28  (1st
          _________    _________________________

          Cir. 1987) (finding that  the remedy's exclusive nature precludes

          reinstatement claim).  

                    Prudential contends that, given that the five appellees

          were discharged  from employment in Puerto  Rico under employment

          agreements without a fixed  duration, Law 80 applies.   Since the

          law provides an exclusive remedy, and the appellees' claims arise

          out of  their termination, it argues, the  only penalty appellees

          could claim for wrongful  discharge would be that set by  Law 80.

          Prudential carries its argument  a step further, maintaining that

          under  Section 185b(d) of Law 80 there was no wrongful discharge,

          as the employees were terminated in conjunction  with the closing

          of PBPR.8  Since  "employees who are dismissed for  cause are not

          entitled  to the  relief afforded  by Act  80," Marti  v. Chevron
                                                          _____     _______

          U.S.A., Inc.,  772 F.  Supp. 700, 705  (D.P.R. 1991),  Prudential
          ____________

          concludes, the arbitrators' award  is irreconcilable with Law 80,
                              
          ____________________

          contract cannot  make an  agreement regarding  indemnification in
          the case of  wrongful termination.   See Santini  Roig v.  Iberia
                                               ___ _____________     ______
          L neas  A reas de  Espa a, 688  F. Supp.  810, 817  (D.P.R. 1988)
          _________________________
          (allowing recovery under Law 80 when parties had been indemnified
          according to a collective  bargaining agreement, stating that Law
          80  "is an independent statute that provides for a separate cause
          of  action for  monetary relief  regardless of  the terms  of the
          collective bargaining agreement.").

          8    Prudential  makes  the additional  arguments  that  appellee
          Tanner's alleged  failure to  record a transaction  in accordance
          with  federal   and  company   rules  provided  just   cause  for
          termination, and that appellee  Rodr guez' decision to resign was
          not constructive  discharge under  Law 80.   These arguments  are
          also defeated under the analysis presented below.

                                         -12-

          and so was made in manifest disregard of it.

                    In  order  to  demonstrate  that  the  arbitrator  both

          recognized and ignored the applicable law, Advest, 914 F.2d at 9,
                                                     ______

          "'there must be some showing in the record, other than the result

          obtained,  that  the  arbitrators  knew  the  law  and  expressly

          disregarded  it,'"   id.  at  10  (quoting  O.R.  Sec.,  Inc.  v.
                               ___                    _________________

          Professional Planning Assocs., Inc., 857 F.2d 742, 747 (11th Cir.
          ___________________________________

          1988)).  The demand for  a showing in the  record sets up a  high

          hurdle  for   Prudential  to  clear,  because   where,  as  here,

          arbitrators do  not explain the reasons  justifying their award,9

          "appellant is hard  pressed to satisfy the  exacting criteria for

          invocation of the doctrine."  Id.  "In fact, when the arbitrators
                                        ___

          do not give their  reasons, it is nearly impossible for the court

          to determine whether they acted  in disregard of the law."   O.R.
                                                                       ____

          Sec.,  857  F.2d  at  747.    But see  Advest,  914  F.2d  at  10
          ____                          _______  ______

          (suggesting that a court  could find arbitrators in  disregard of

          the law  despite the lack  of a record  where "the  governing law

          [has]   such  widespread   familiarity,  pristine   clarity,  and

          irrefutable  applicability   that  a  court   could  assume   the

          arbitrators knew  the rule  and, notwithstanding, swept  it under

          the rug.").  

                    In the  present case Prudential's argument  is thwarted

                              
          ____________________

          9  It is  well established that arbitrators  are not required  to
          either  make formal  findings of  fact or  state reasons  for the
          awards they issue.   Labor  Relations Div. of  Constr. Indus.  of
                               ____________________________________________
          Mass.,  Inc. v. International Bhd. of Teamsters, 29 F.3d 742, 747
          ____________    _______________________________
          (1st Cir. 1994);  Raytheon Co. v. Automated Business  Sys., Inc.,
                            ____________    ______________________________
          882 F.2d 6, 8 (1st Cir. 1989).

                                         -13-

          by  the fact  that the  arbitrators did  not explain  the reasons

          behind  their award.   It is undisputed  that Law 80  was not the

          only cause  of action  asserted by Prudential's  former employees

          before  the arbitrators.  What is more, it is equally uncontested

          that appellees presented evidence  regarding damages under Law 80

          in contradiction of Prudential's  position.  Given the fact  that

          the panel members heard conflicting arguments, it is difficult to

          maintain  that they both  recognized the applicable  law and then

          ignored it, id. at 9, without the benefit of a statement of their
                      ___

          reasons.    The broad  leeway  arbitrators  enjoy in  determining

          remedies,  see id. at 11; Challenger Caribbean Corp., 903 F.2d at
                     ___ ___        __________________________

          869,  further  stymies  Prudential's  attempt  to  demonstrate  a

          manifest disregard of  the law  on the part  of the panel,  given

          that their  remedial  options are  not limited  to those  offered

          during the hearing.  Advest, 914 F.2d at 11.
                               ______

                    Accordingly, we are not  convinced that the court below

          abused  its discretion in  finding that, judging  from the award,

          the  arbitrators considered  and  rejected Prudential's  argument

          that it  had just  cause  to terminate  appellees.10   Therefore,

          like  the  district court  before  us,  we "decline  Prudential's

                              
          ____________________

          10    The   parties  briefly  debate  two  grounds  for  recovery
          concurrent   to  Law 80:  (1) whether  the appellees'  claims for
          emotional  and mental  suffering  are based  on tortious  conduct
          separate and independent from the termination of their employment
          for the purposes of Law 80; and (2) whether a partnership between
          Tanner, Cabrer, Rodr guez and  Prudential was formed under Puerto
          Rico law.
          We find that the arbitrators may have rejected  Prudential's just
          cause argument and therefore uphold their award.  Accordingly, we
          need not address the details of these disputes.

                                         -14-

          invitation to  revisit the merits of  their factual contentions",

          Rodr guez, 882 F. Supp.  at 1209, and affirm their decision.  Cf.
          _________                                                     ___

          O.R.   Sec.,  857 F.2d  at 748  ("The record  of the  arbitration
          ___________

          proceedings in  this  case  shows that  the  issue  of  successor

          liability  was  clearly  presented  to the  arbitrators  and  the

          arbitrators  declined  to state  reasons  for their  conclusions.

          This ends the inquiry.").

                                  D.  Public Policy
                                  D.  Public Policy
                                      _____________

                    Prudential argues that the awards in favor of appellees

          Tanner and Rodr guez should be vacated because they are  contrary

          to  a  well-defined and  dominant  public  policy requiring  that

          securities   firms   maintain    correct   books   and   records.

          Specifically, Prudential asserts that Tanner and Rodr guez failed

          to  record  three  puts11  to Schering  Plough,  PaineWebber  and

          Squibb, as well  as a  one million dollar  rebate (together,  the

          "transactions").   The  failure  to record  the transactions,  it

          asserts,  violates  a dominant  public policy  demanding accurate

          books and records.  

                    A  court  may vacate  an  arbitration  award where  the

          arbitration agreement as interpreted would violate public policy.

          See  United Paperworks Int'l Union  v. Misco, Inc.,  484 U.S. 29,
          ___  _____________________________     ___________

          42-43 (1987); W.R. Grace & Co. v.  Local Union 759, United Rubber
                        ________________     ______________________________

          Workers,  461 U.S. 757, 766 (1983).  However, this authority does
          _______
                              
          ____________________

          11  A put is "[a]n option permitting its holder to sell a certain
          stock  or commodity at  a fixed price  for a  stated quantity and
          within a stated period.  Such a right is purchased for a fee paid
          the  one who  agrees to  accept the  stock or  goods if  they are
          offered."  Black's Law Dictionary 1237 (6th ed. 1990).

                                         -15-

          not include  "a broad  judicial  power to  set aside  arbitration

          awards  as  against  public policy."    Misco,  484  U.S. at  43.
                                                  _____

          Rather, the  court's power is  limited "to  situations where  the

          contract  as  interpreted  would  violate  'some explicit  public

          policy'  that is  'well  defined  and  dominant,  and  is  to  be

          ascertained 'by  reference to the  laws and legal  precedents and

          not from  general considerations of supposed public interests.''"

          Id. (quoting W.R. Grace, 461 U.S. at 766).  
          ___          __________

                    In United  Paperworks Int'l  Union v. Misco,  Inc., the
                       _______________________________    ____________

          Supreme   Court   set  out   two  requirements   for  overturning

          arbitration awards on the  grounds of public policy.   First, the

          "alleged public policy must be properly framed under the approach

          set  out  in W.R.  Grace."   Id.   This  demands  "examination of
                       ___________     ___

          whether the award created any explicit conflict  with other 'laws

          and  legal  precedents' rather  than  an  assessment of  'general

          considerations  of supposed  public interests.'"   Id.   (quoting
                                                             ___

          W.R. Grace,  461 U.S. at 766);  see W.R. Grace, 461  U.S. at 766,
          __________                      ___ __________

          770  (finding that  obedience  of judicial  orders and  voluntary

          compliance with Title VII of the Civil Rights Act of 1964 are two

          such public policies).   Second, "the violation of such  a policy

          must be clearly shown if an award is not to be enforced."  Misco,
                                                                     _____

          484 U.S. at 43. 

                    To  meet  the  demands  of the  first  requirement  and

          demonstrate that  the policy is "ascertained 'by reference to the

          laws and legal precedents,'" id. (quoting W.R. Grace, 461 U.S. at
                                       ___          __________

          766), Prudential points to the reporting requirements set out for

                                         -16-

          registered  broker-dealers in  Section  17(a)  of the  Securities

          Exchange Act of 1934,  15 U.S.C.   78q(a)  (1994), and the  rules

          promulgated under that Act, SEC Rule 17a-3, 17 C.F.R.   240.17a-3

          (1994), as  well as  the rules of  self-regulatory organizations.

          See, e.g., 2 New York Stock Exchange Guide, Rule 440 (1989).  All
          ___  ____

          of these  statutes and rules mandate  recording transactions like

          those  of Tanner  and Rodr guez in  the books and  records of the

          registered  broker-dealer.    It   is  not  disputed  that  these

          regulations applied to the transactions.  

                    We need not  address, however, whether these  reporting

          requirements establish  an explicit  public policy such  that the

          "award create[s] any explicit conflict with other 'laws and legal

          precedents.'"  Misco,  484 U.S.  at 43 (quoting  W.R. Grace,  461
                         _____                             __________

          U.S. at 766).  Since the second requirement of the Misco analysis
                                                             _____

          demands that the violation of the policy "be clearly shown," id.,
                                                                       ___

          and Prudential cannot show that the  arbitration panel found that

          Tanner and Rodr guez violated public policy, its argument fails.

                    In reviewing an arbitration award challenged  on public

          policy grounds, we "tak[e] the facts as found by the arbitrator."

          Board of County Comm'rs v. L. Robert Kimball and Assocs, 860 F.2d
          _______________________    ____________________________

          683, 686 (6th Cir. 1988), cert. denied, 494 U.S. 1030 (1990); see
                                    _____ ______                        ___

          Misco, 484 U.S. at 45 ("The parties did not bargain for the facts
          _____

          to  be  found  by  a  court,  but  by  an  arbitrator  chosen  by

          them . . . .").   Although  the  parties are  in dispute  whether

          Tanner and Rodr guez'  failure to record  the transactions is  an

          admitted  fact, Prudential's  argument is  again undercut  by the

                                         -17-

          arbitrators'  decision   not  to   explain  their  award.     The

          arbitration  panel heard  Prudential's claims,  and its  award of

          more than one million  dollars each to both Tanner  and Rodr guez

          "suggests    that   they   were   unpersuaded   by   Prudential's

          allegations."12   Rodr guez, 882 F. Supp.  at 1208.  In  the face
                            _________

          of  the panel's silence and  its awards, we  cannot conclude that

          the  arbitrators, in  their  fact-finding  capacity,  necessarily

          found that there  was a recording violation, and we  refuse to do

          so in  their stead.  See  Misco, 484 U.S. at  44-45 (holding that
                               ___  _____

          for the Court  of Appeals to draw inferences from known facts was

          an "inappropriate" exercise in factfinding).  

                            E.  Attorney's Fees and Costs
                            E.  Attorney's Fees and Costs
                                _________________________

                    Prudential's  final contention is that the arbitrators'

          awards of attorney's fees  and costs to the appellants  should be

          vacated.  First, it  claims that the award of  attorney's fees is

          not  contemplated  by  Rule 629(c)  of  the  NYSE.13   Prudential
                              
          ____________________

          12  Prudential  asserts that the district court improperly relied
          on an  issue Prudential did not raise before it, namely, that the
          transactions  were  done  without  authorization.    Indeed,  the
          district   court   characterizes  the   authorization   issue  as
          "Prudential's main contention."  Rodr guez, 882 F. Supp. at 1209.
                                           _________
          However, its discussion of Prudential's  argument to the panel as
          well as the arbitrators' decision, quoted  above, refers not only
          to the authorization issue,  but also to Prudential's "assumption
          that  the actions .  . .  were in fact  unlawful."   Id. at 1208.
                                                               ___
          Therefore, we can rely on these findings of the district court in
          our discussion of whether  there was a clear violation  of public
          policy, without being guilty of factfinding.

          13  That rule provides, in pertinent part:

                         In   addition   to  forum   fees,  the
                      arbitrator(s) may determine in  the award
                      the amount of costs incurred  pursuant to
                      Rules   617,  619  and  623  and,  unless

                                         -18-

          argues  that  because  the   rule  does  not  explicitly  mention

          attorney's fees,  to assume  it provides an  implicit independent

          basis  for awarding them is contrary to the general American rule

          that  parties typically bear their  own legal fees.   See Alyeska
                                                                ___ _______

          Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247 (1975),
          __________________    ________________

          superseded by statute as stated in Stanford Daily v. Zurcher, 550
          __________________________________ ______________    _______

          F.2d  464, 465-66 (9th Cir. 1977).  Second, Prudential points out

          that under Puerto Rico law attorney's fees may be awarded only if

          provided  for by  statute, or  against a  party which  raises and

          obstinately  pursues  meritless claims  or  otherwise vexatiously

          engages in unnecessary litigation.   See P rez Marrero v. Colegio
                                               ___ _____________    _______

          de Cirujanos  Dentistas,  92  J.T.S.  124 (1992);  Elba  A.B.  v.
          _______________________                            __________

          Universidad  de Puerto  Rico, 90  J.T.S. 13  (1990).   Prudential
          ____________________________

          argues  that  no  judge  could  reasonably  find that  it  raised

          frivolous claims  or pursued them improperly, given its claims of

          violations of  the record-keeping  requirements by  Rodr guez and

          Tanner.    

                    We disagree.  Since Prudential does not state its basis

          for  overturning the award, we  presume it is  relying on Section

          10(a)(4) of the  FAA, which  provides that courts  may set  aside

          awards when  the  arbitrators  exceed  their powers.    9  U.S.C.

            10(a)(4).    This  award   was,  however,  within  the  panel's

                              
          ____________________

                      applicable  law directs  otherwise, other
                      costs and expenses of  the parties.   The
                      arbitrator(s)  shall  determine  by  whom
                      such costs shall be borne.

          2 New York Stock Exchange Guide, Rule 629(c) (1989).

                                         -19-

          authority.  First,  we do not think that  the district court read

          an implicit basis for awarding  attorney's fees into Rule 629(c).

          The  rule states that it provides for "costs and expenses, unless

          applicable  law directs  otherwise."   We read  this  language to

          include  attorney's fees, and  have found no  case law suggesting

          otherwise.14

                    Second,  although not  noted  by the  court below,  the

          record reveals  that both parties requested  attorney's fees from

          the  panel (Joint  Appendix,  pp. 811,  923-24), suggesting  that

          awarding  fees was contemplated by  the parties to  be within the

          scope of the agreement to arbitrate.   The case law suggests that

          this is an important  factor.  See  Bacard  Corp. v. Congreso  de
                                         ___  _____________    ____________

          Uniones Industriales, 692  F.2d 210, 214 (1st Cir. 1982) (finding
          ____________________

          arbitrator exceeded  his authority awarding attorney's fees where

          grieving  union did not claim them, and their award "did not draw

          its essence  from the collective bargaining  agreement"); Wing v.
                                                                    ____

          J.C. Bradford  & Co., 678  F. Supp.  622, 626  (N.D. Miss.  1987)
          ____________________
                              
          ____________________

          14   In  fact, we  have  found little  case  law on  this  issue,
          although there is certainly precedent for the award of attorney's
          fees.   See, e.g., Phoenix Central v. Dean Witter Reynolds, Inc.,
                  ___  ____  _______________    __________________________
          768 F. Supp. 702, 703 (D. Ariz. 1991) (granting order  to confirm
          NYSE panel arbitration award including  attorney's fees); Barbier
                                                                    _______
          v.  Shearson Lehman Hutton, 752 F. Supp. 151, 154 (S.D.N.Y. 1990)
              ______________________
          (confirming NYSE  arbitrators'  award of  attorney  fees  without
          comment), aff'd in  part, rev'd in  part, 948  F.2d 117 (2d  Cir.
                    ______________  ______________
          1991).  What  cases we have found  addressing whether arbitrators
          should have awarded attorney's fees analyze the issue under state
          law,  not the Rules of the NYSE.   See, e.g., Zate v. A.T. Brod &
                                             ___  ____  ____    ___________
          Co.,  839 F.  Supp. 27,  29 (M.D.  Fla. 1993)  (analyzing whether
          ___
          arbitrator  should  have  awarded attorney's  fees  under Florida
          law);  Emrick v. Deutsche Bank  Capital Corp., No.  91 Civ. 0592,
                 ______    ____________________________
          1991  WL 61091, at *2-4  (S.D.N.Y. Apr. 15,  1991) (weighing NYSE
          panel's failure  to award  attorney's fees under  New York  labor
          law).

                                         -20-

          (confirming NYSE arbitration panel award of attorney's fees where

          parties submitted the award of fees to panel).   

                    Third,  Prudential  is correct  in stating  that Puerto

          Rico law demands a finding that a "party or its  lawyer has acted

          obstinately  or frivolously."  P.R. R. Civ. P. 44.1(d).  However,

          appellees offered  examples of  Prudential's  conduct to  support

          such  a conclusion.  It is reasonable  to find that the fact that

          the panel awarded attorney's  costs indicates it found Prudential

          obstinate and/or temarious  in litigating some of  the claims, or

          in its conduct.  Thus, given that the panel had evidence in front

          of it as  to obstinate  or frivolous conduct,  that both  parties

          requested attorney's  fees, and that  the NYSE Rules  provide for

          the award  of  fees,  we cannot  conclude  that  the  arbitrators

          exceeded the scope of their authority under Section 10(a)(4).

                    Finally,  Prudential argues  that the  former employees

          failed to leap  a procedural hurdle, since they did  not submit a

          verified statement to the panel itemizing all expenses sought, as

          mandated by  Puerto Rico  civil  procedure.     P.R. R.  Civ.  P.

          44.1(a),  (b).  In so  arguing, Prudential ignores  the fact that

          the parties agreed to arbitrate under the rules of the  NYSE, and

          Rule 629(c)  imposes no  itemization requirement.   Nevertheless,

          the appellees itemized  their costs in their closing brief, filed

          five  days before the parties  made their final  arguments to the

          panel.   While  Prudential had  the opportunity to  challenge the

          accuracy or reasonableness of the  costs, it chose not to do  so.

          Therefore,  because we  do not  find  that the  arbitration panel

                                         -21-

          clearly exceeded the scope of its powers, and giving its decision

          the  deference  due to  arbitrators, we  find  that the  award of

          attorney's fees should not be vacated.  Cf. Advest, 914 F.2d at 8
                                                  ___ ______

          (stating  that even where arbitrators'  factual or legal error is

          "painfully clear," courts may not reconsider an award's merits).

                                      CONCLUSION
                                      CONCLUSION

                    For the foregoing reasons, the judgment of the district

          court is affirmed.
                   affirmed.
                   ________

                                         -22-