Compulsory Arbitration Waivers

By Mark J. Astarita, Esq.

Keeping in mind that it was the securities brokerage firms which began the now widespread use of mandatory arbitration, it was almost comical to see these same securities firms attempt to force their registered representatives to waive their “right” to proceed to an arbitration when a dispute arose between the firm and the broker. But, over the last few years, more and more brokerage firms began including a waiver of arbitration in their contracts with their registered representatives if an employment dispute arose.

The dispute over such agreements began almost immediately, with the SROs taking the position that by including such language in their employment agreements firms were forcing new brokers to waive a right granted to them by the rules of the SRO itself. [1] According to the Securities Arbitration Commentator [2]


1. For example, NYSE Rule 347 requires arbitration of between registered representatives and their firms upon the demand of either party.Return to text

2. The Securities Arbitration Commentator is a monthly publication which covers significant issues and events in securities and commodities arbitrations and provides the most complete coverage of the arbitration process of any print publication. For subscription information, contact its publisher, Richard P. Ryder, at P.O. Box 112, Maplewood, NJ 07040, (201) 761-5880.Return to text

Copyright © 1995 Mark Astarita. Nothing contained herein should be construed as legal advise. Please see our disclaimer for further information.

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Mark Astarita

Securities Attorney at Sallah Astarita & Cox | 212-509-6544 | | Website | + posts

Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.

He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page -, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.