Judge Holds Tech Founder's $28M Suit Against JPMorgan Must be Arbitrated
Yesterday, a Delaware federal judge held that fintech founder Charlie Javice must arbitrate her wrongful termination suit against JPMorgan Chase before bringing her $28 million case back to federal court.
Charlie Javice founded a financial technology company, Frank, which was later acquired by JP Morgan Chase for use as an online student aid platform. Last year, JP Morgan sued Javice on accusations that she misrepresented the popularity of Frank to induce the bank into purchasing her company for $175 million.
In February, Javice filed counterclaims against JPMorgan, alleging that JPMorgan fabricated allegations that she had misrepresented the company’s valuations to shift blame away from JPMorgan. Javice also alleged that JPMorgan had wrongfully terminated her as managing director at the bank.
U.S. District Judge Joshua Wolson dismissed Javice’s wrongful termination counterclaims, finding that she agreed to have those claims heard in arbitration when she signed her employment agreement with the bank. Judge Wolson held that, because Javice’s claims relate to her separation from employment with JPMorgan, they “arguably fall within the scope of the arbitration agreement.”
Javice also sought relief for JPMorgan’s alleged violation of Javice’s payment direction agreement, under which she was allegedly entitled to $7.9 million in delayed payments for her equity stake in Frank. Judge Wolson temporarily stayed this claim, holding that it was up to the arbitrator to decide whether those claims are arbitrable.
In April, Javice was arrested on four counts of fraud and conspiracy after a grand jury determined that Javice engaged in a “brazen scheme to defraud JPMorgan in the course of a $175 million acquisition.” Javice pled not guilty to the charges, claiming that JPMorgan attempted to scapegoat her for its own mismanagement of the acquisition. Javice now awaits trial on the charges.