Opinion
No. 2708 Index No. 653480/22 Case No. 2023-02951
10-03-2024
In the Matter of Daniel Michalow, Petitioner-Appellant, v. D.E. Shaw & Co., L.P., et al., Respondents-Respondents.
Wallison & Wallison, LLP, New York (Jeremy L. Wallison of counsel), for appellant. Jones Day, New York (Terri L. Chase of counsel), for respondents.
Wallison & Wallison, LLP, New York (Jeremy L. Wallison of counsel), for appellant.
Jones Day, New York (Terri L. Chase of counsel), for respondents.
Before: Manzanet-Daniels, J.P., Friedman, Gesmer, González, Pitt-Burke, JJ.
Order, the Supreme Court, New York County (Andrew Borrok, J.), entered on or about May 15, 2023, which denied the petition to vacate a portion of an arbitration award denying petitioner's claims for certain post-termination compensation, unanimously affirmed, with costs.
The Arbitrators' decision to deny petitioner's claim for his deferred compensation and profit interests following the termination of his employment from respondent D.E. Shaw & Co., L.P. does not violate public policy or evince a manifest disregard of the law (see Transparent Value, L.L.C. v Johnson, 93 A.D.3d 599, 600-601 [1st Dept 2012]). Petitioner has failed to identify a public policy embodied in statute or decisional law prohibiting the arbitrators, in an absolute sense, from enforcing the employment agreements underlying his compensation claims (Matter of Sprinzen [Nomberg], 46 N.Y.2d 623, 630 [1979]; cf. Denson v Donald J. Trump for President, Inc., 180 A.D.3d 446, 450-451 [1st Dept 2020]). Contrary to petitioner's position otherwise, the agreements at issue do not violate public policy by insulating D.E. Shaw from liability for future intentional wrongdoing (see e.g. Richardson v Island Harvest, Ltd., 166 A.D.3d 827, 828 [2d Dept 2018]). Rather, they condition the release of certain post-termination compensation on the execution of a general release that waives liability for claims that accrued by the time the release was signed.
We note that during the arbitration proceedings, petitioner requested a "non-reasoned" award rather than an explained or "reasoned" award. We reject petitioner's argument that the arbitrators manifestly disregarded well-defined, explicit, and clearly applicable law, as there are colorable justifications for a finding that the compensation petitioner seeks is incentive compensation rather than earned wages under Labor Law § 190 (Roffler v Spear, Leeds & Kellogg, 13 A.D.3d 308, 310 [1st Dept 2004]; see Matter of Anderson v AHS [At Home Solutions, LLC], 200 A.D.3d 487, 487 [1st Dept 2021]). In any event, even if the Arbitrators' interpretation of the employment agreements was erroneous, a mere error in the law "does not equate to manifest disregard of the law" (Matter of Nexia Health Tech., Inc. v Miratech, Inc., 176 A.D.3d 589, 591 [1st Dept 2019] [internal quotation marks omitted]; see also Wien & Malkin LLP v Helmsley-Spear, Inc., 6 N.Y.3d 471, 480 [2006]).
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.