Arbitration award in favor of employee is thrown out by court
The executive chef of Gaucho, LLC sued the company after he was terminated. The chef, Hernandez, argued that his termination was wrongful and breached the contract pursuant to which he was eventually to become a five percent owner of the company. The parties had signed a contract that contained a mandatory arbitration contract, however, Gaucho repeatedly refused to provide discovery of documents and materials sought by Hernandez. Eventually, the arbitrator "defaulted" Gaucho and ruled in favor of the discharged employee.
The Court held that while Courts enjoy the right to dismiss a claim or defense for failure to cooperate in discovery, the arbitrator did not; since the arbitrator did not hear any evidence to support his decision, his default judgment against the company was overturned.