[Federal Register Volume 64, Number 52 (Thursday, March 18, 1999)]
[Notices]
[Pages 13460-13461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6551]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41151; File No. SR-NYSE-99-04]


Self-Regulatory Organization; Notice of Filing of Proposed Rule 
Change by the New York Stock Exchange, Inc. To Amend Rule 347 To 
Expressly Allow Employees To Bring Employment Related Claims Before the 
EEOC, NLRB, or State or Local Anti-Discrimination Agencies

March 10, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and rule 19b-4 thereunder,\2\ notice is hereby given that 
on February 5, 1999, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission, 
(``Commission'') the proposed rule change. The proposed rule change is 
described in Items I, II, and III below, which Items have been prepared 
by the Exchange. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change amends Exchange Rule 347, Controversies As 
to Employment or Termination of Employment, to expressly allow 
employees to bring employment related claims before the Equal 
Employment Opportunity Commission (``EEOC''), National Labor Relations 
Board (``NLRB''), or state or local anti-discrimination agencies. The 
text of the proposed rule change follows. New text is italicized.

[[Page 13461]]

Rule 347. Controversies As to Employment or Termination of Employment
    (a) No Change.
    (b) No Change.

Supplementary Material

    10  Nothing in the Rules of the New York Stock Exchange, Inc. is 
intended, nor shall be construed, to prohibit any employee form 
bringing a claim against any member or member organization arising out 
of the employment or termination of employment of such employee with 
such member or member organization before the Equal Employment 
Opportunity Commission, any state or local anti-discrimination agency, 
or the National Labor Relations Board.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to revise exchange rule 
347 to codify current Exchange interpretation of Exchange Rule 347 
regarding the arbitration of employment disputes. Generally, Exchange 
Rule 347 requires that any controversy between a registered 
representative and the member of member organization that employs him 
arising out of said employment or the termination of said employment be 
settled by arbitration.\1\
---------------------------------------------------------------------------

    \1\ Recent changes to Exchange Rules 347 and 600 remove 
statutory employment discrimination claims form Rule 347's 
requirement that all employment disputes between a registered 
representative and member or member organization be arbitrated at 
the request of either party. Securities Exchange Act Release No. 
40858 (December 29, 1998) 64 FR 1051 (January 7, 1999). Under the 
amended Rules, such discrimination claims will be eligible for 
Exchange arbitration only where the parties have agreed to arbitrate 
the claim after it has arisen and the Exchange will not provide an 
arbitral forum for statutory employment discrimination claims 
pursuant to pre-dispute agreements.
---------------------------------------------------------------------------

    The proposed amendment to Exchange Rule 347 would clarify that the 
Exchange's Rule should not be interpreted to preclude employees from 
bringing employment-related claims against members and member 
organizations before the EEOC, NLRB, or state or local anti-
discrimination agencies.
    In addition, the proposed amendment would address an issue recently 
raised by a Teamsters Union Local with the NLRB.\2\ The Teamsters Union 
Local alleged that the Exchange's prior arbitration policy interfered 
with rights guaranteed by the National Labor Relations Act by 
prohibiting employees from filing and pursuing charges with the NLRB. 
While the Exchange has never interpreted its arbitration rules to 
preclude employees of members or member organizations from pursuing 
such charges, the Exchange determined that it would resolve the issue 
by amending Exchange Rule 347 to codify the existing Exchange 
interpretation. Accordingly, the Exchange proposes to add Supplementary 
Material .10 to Exchange Rule 347 to provide that Exchange Rules are 
not intended to, and shall not be construed to prohibit employees from 
bringing employment-related claims against members or member 
organizations before the EEOC, NLRB, or any state or local anti-
discrimination agencies.
---------------------------------------------------------------------------

    \2\ By letter dated July 14, 1998, the NLRB notified the 
Exchange that Teamsters Union Local 856 of the International 
Brotherhood of Teamsters, AFL-CIO, has filed an unfair labor practic 
charge with the NLRB.
---------------------------------------------------------------------------

2. Statutory Basis
    The proposed rule change is consistent with Section 6(b)(5) of the 
Act \3\ which requires that the rules of the Exchange is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, and, in general, to protect 
investors and the public interest, in that it ensures that members and 
member organizations and the public have a fair and impartial forum for 
the resolution of their disputes.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposal does not impose any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange neither solicited nor received any comments.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Within 35 days of the publication of this notice in the Federal 
Register or within such longer period (i) as the Commission may 
designated up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve such proposed rule changed, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549-
0609. Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for inspection and copying in the 
Commission's Public Reference Room in Washington, D.C. Copies of such 
filings will also be available for inspection and copying at the 
principal office of the Exchange. All submissions should refer to File 
No. SR-NYSE-99-04 and should be submitted by April 8, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\4\
---------------------------------------------------------------------------

    \4\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-6551 Filed 3-17-99; 8:45 am]
BILLING CODE 0010-01-M