ST. CROIX — A federal judge has ordered a former Banco Popular manager's employment discrimination lawsuit into binding arbitration, ruling that an agreement she signed when she joined the bank in 2005 requires her claims to be handled outside federal court.
In an October 5 order, U.S. Magistrate Judge Emile A. Henderson III granted Banco Popular de Puerto Rico's motion to compel arbitration in a lawsuit brought by Leslie Hendrickson, who alleges she experienced discrimination, retaliation and a hostile work environment during a nearly 20-year career with the financial institution.
The ruling suspends the federal lawsuit while arbitration proceeds. It does not resolve Hendrickson's allegations of discrimination or determine whether Banco Popular violated employment laws.
Hendrickson filed her lawsuit on July 14, 2026, alleging discrimination based on race, color, national origin and age, along with retaliation, unequal treatment and wrongful termination.
According to her complaint, she joined Banco Popular in July 2005 and subsequently advanced into management. She became assistant branch manager at the Sunny Isle branch in 2016 and later served as acting manager at the Sunshine Mall branch on St. Croix.
Hendrickson alleged that between June 2024 and January 2025, conflicts involving another employee created a hostile working environment for her and other employees who did not speak Spanish.
She claimed the bank's Human Resources Department compounded those problems by addressing workplace disputes without informing her, undermining her authority as a manager, disregarding her complaints and encouraging insubordination.
According to Hendrickson, she was summoned to a meeting in February 2025 without prior notice, resulting in the termination of her employment after approximately 19 years of service. She also accused the bank of contributing to the denial of her unemployment benefits following her departure.
Banco Popular disputes her account of the separation, maintaining that she voluntarily resigned on February 4, 2025.
In her lawsuit, Hendrickson seeks compensatory damages, back pay, future lost wages, lost benefits, emotional distress damages, $250,000 in costs and interest.
Hendrickson filed a discrimination charge with the Equal Employment Opportunity Commission in September 2025. The EEOC subsequently dismissed the charge and issued a notice of her right to sue in April 2026.
Employment Agreement Requires Arbitration
Banco Popular sought to move the case into arbitration based on an employment agreement Hendrickson signed on July 18, 2005.
The agreement established binding procedures for resolving disputes involving termination, workplace claims and alleged violations of employment laws. Its language expressly included claims under Title VII of the Civil Rights Act of 1964 and other federal and territorial employment statutes.
The bank initially encountered problems presenting the agreement to the court.
Its first motion to compel arbitration, filed August 17, was struck because it did not comply with the court's procedural requirements. A second motion, filed August 20, was denied without prejudice because the attached employment agreement identified the employee as Leslie Yarwood rather than Leslie Hendrickson.
In a renewed motion filed September 11, Banco Popular explained that Hendrickson had previously used the name Leslie Yarwood and submitted a declaration from a human resources officer supporting that identification.
Hendrickson opposed the renewed motion, arguing that the bank had engaged in improper conduct and that its repeated filings violated procedural requirements.
She also maintained that the employment agreement should have been updated when she was promoted into management, stating that she had not considered the original contract to remain applicable following her advancement.
Judge Henderson rejected those arguments, finding that the 2005 agreement remained valid and enforceable.
The judge observed that Hendrickson had signed the contract and that its terms provided for the agreement to continue indefinitely unless terminated under its provisions.
He also determined that the arbitration requirement specifically covered the discrimination and employment-related claims raised in Hendrickson's lawsuit.
The court therefore granted Banco Popular's motion and directed the parties to resolve the dispute through arbitration.
Court Rejects Requests to Strike Bank's Motion and Enter Default
Hendrickson also sought to have the bank's arbitration motion struck, alleging procedural misconduct, bad faith and other improper actions.
The judge rejected that request, explaining that the bank's earlier filings had been rejected for correctable procedural deficiencies. The court found that the renewed motion did not violate the applicable rules and was not tainted by fraud or bad faith.
Hendrickson separately requested that the court enter default against Banco Popular, arguing that the bank had failed to submit a proper response to her complaint within the required period.
Judge Henderson denied that request as well, finding that Banco Popular had responded within the original deadline, although its initial filing was defective. The bank subsequently corrected the deficiencies and demonstrated its intention to defend the lawsuit.
The court also denied as moot a separate request by Banco Popular to pause pretrial proceedings, since the order compelling arbitration already required the federal case to be stayed.
The judge canceled the November 2 initial court conference and suspended the previously established discovery deadlines.
Both parties must submit a status report to the federal court by April 1, 2027, and every six months thereafter while arbitration remains pending.
The underlying discrimination and retaliation claims remain unresolved.
