Means of Dispute Means of Dispute SettlementSettlement

NegotiationNegotiation Alternative Dispute ResolutionAlternative Dispute Resolution

MediationMediationArbitrationArbitrationMinitrial and Summary Jury TrialMinitrial and Summary Jury TrialPrivate JudgingPrivate Judging

The CourtsThe Courts Why Use an Alternative Method?Why Use an Alternative Method?

Alternative Dispute Alternative Dispute Resolution SystemsResolution Systems

ExpenseExpense

Time, Cost, EmotionsTime, Cost, Emotions

MostMost LeastLeast

Trial & Trial & AppealAppeal

ArbitrationArbitration

Mock Mock TrialTrial MinitrialMinitrial

MediationMediation

NegotiatedNegotiated

SettlementSettlement

A recent survey ofA recent survey of U.S. corporations found U.S. corporations found

89% had used mediation in the last 3 89% had used mediation in the last 3 yearsyears

79% had used arbitration79% had used arbitration

90% viewed mediation as a cost 90% viewed mediation as a cost saving measuresaving measure

Of 449 cases processed Of 449 cases processed by major ADR by major ADR

providers, 78% of the providers, 78% of the cases that went to cases that went to

mediation mediation were settled.were settled.

Types Of Types Of NegotiationsNegotiations

•Position-Based- Parties State Position-Based- Parties State OpinionsOpinions

•Interest-BasedInterest-Based

NEGOTIATION METHODSNEGOTIATION METHODS

DistributiveDistributive

Zero-SumZero-Sum

PositionalPositional

CompetitiveCompetitive

IntegratedIntegrated

Win/WinWin/Win

““Interest Based”Interest Based”

CooperativeCooperative

Getting to YesGetting to YesThe Seven Elements of The Seven Elements of

NegotiationNegotiationINTERESTS What do people really INTERESTS What do people really

want?want?OPTIONS What are possible OPTIONS What are possible

agreements or bits of an agreement?agreements or bits of an agreement?ALTERNATIVES What will I do if we ALTERNATIVES What will I do if we

do not agree? (BATNA)do not agree? (BATNA)LEGITIMACY What criteria will I LEGITIMACY What criteria will I

use to persuade each of us that we use to persuade each of us that we are not being ripped off?are not being ripped off?

The Seven Elements of The Seven Elements of Negotiation (cont’d)Negotiation (cont’d)

COMMUNICATION Am I ready to COMMUNICATION Am I ready to listen and talk effectively?listen and talk effectively?

RELATIONSHIP Am I ready to deal RELATIONSHIP Am I ready to deal with the relationship?with the relationship?

COMMITMENT What commitments COMMITMENT What commitments should I seek or make?should I seek or make?

TYPES OF MEDIATIONTYPES OF MEDIATION

EvaluativeEvaluative

FacilitativeFacilitative

TransformationalTransformational

Mediation Mediation ProceduresProcedures

Informal- Controlled By PartiesInformal- Controlled By Parties

MediatorMediator

Opening Statement/RulesOpening Statement/Rules

PartiesParties•View StatementView Statement•ExchangeExchange

•Discuss Options- CaucusDiscuss Options- Caucus

AgreementAgreement

Written/SignedWritten/Signed

Why use Mediation?Why use Mediation?

WHY MEDIATE?WHY MEDIATE?

Economical DecisionsEconomical Decisions

Rapid SettlementsRapid Settlements

Mutually Satisfactory OutcomesMutually Satisfactory Outcomes

High Rate of ComplianceHigh Rate of Compliance

Comprehensive and Customized Comprehensive and Customized AgreementsAgreements

Greater Degree of Control and Greater Degree of Control and PredictabilityPredictability

WHY MEDIATE?WHY MEDIATE?

Personal EmpowermentPersonal Empowerment

Preservation of an Ongoing Relationship or Preservation of an Ongoing Relationship or Termination of a Relationship in a More Termination of a Relationship in a More Amicable WayAmicable Way

Workable and Implementable DecisionsWorkable and Implementable Decisions

Agreements that are Better than Simple Agreements that are Better than Simple Compromises or Win/Lose OutcomesCompromises or Win/Lose Outcomes

Decisions that Hold Up Over TimeDecisions that Hold Up Over Time

When Should You Not Use When Should You Not Use Mediation?Mediation?

CHARACTERISTICS OF CHARACTERISTICS OF ARBITRATIONARBITRATION

Can be voluntaryCan be voluntaryBy contract or agreementBy contract or agreement

Court-annexedCourt-annexed

Binding or nonbindingBinding or nonbinding

Strengths of using Strengths of using arbitration in labor or arbitration in labor or employment disputesemployment disputes

Maintains tranquility between parties for Maintains tranquility between parties for term of CBAterm of CBA

Assures a final & binding resolution to the Assures a final & binding resolution to the dispute (limited review by the courts)dispute (limited review by the courts)

Provides fairness & due process because Provides fairness & due process because it operates under procedures to which the it operates under procedures to which the parties have agreedparties have agreed

Parties have a shared role in the selection Parties have a shared role in the selection of the arbitratorof the arbitrator

Strengths of using arbitration Strengths of using arbitration in labor or employment in labor or employment

disputes (continued)disputes (continued)

The equal sharing of of the arbitrator’s The equal sharing of of the arbitrator’s fees & expenses reinforces the neutralityfees & expenses reinforces the neutrality

May be faster & less expensive than May be faster & less expensive than litigationlitigation

Pending arbitration encourages Pending arbitration encourages mediationmediation

Arbitrators may have expertise in the Arbitrators may have expertise in the area.area.

Limitations in the Use of Limitations in the Use of ArbitrationArbitration

Can only address matters covered by CBA.Can only address matters covered by CBA. Arbitrators’ authority restricted to those in Arbitrators’ authority restricted to those in

CBA.CBA. Arbitrators’ findings of statutory violations Arbitrators’ findings of statutory violations

is not binding on the courts or agencies.is not binding on the courts or agencies. Labor arbitration covers only a small % of Labor arbitration covers only a small % of

the workforce.the workforce. Arbitrators may lack statutory expertise.Arbitrators may lack statutory expertise. Seems to be under increasing scrutiny by Seems to be under increasing scrutiny by

the courts.the courts.

SOURCES OF LAWSOURCES OF LAW

Federal Arbitration Act Federal Arbitration Act 9 U.S.C. §1 et seq. 9 U.S.C. §1 et seq.

“…“…but nothing herein contained shall apply to contracts of but nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate class of workers engaged in foreign or interstate commerce.”commerce.”

See See Circuit City v. AdamsCircuit City v. Adams

HEARING PROCEDUREHEARING PROCEDURE

Agreement to arbitrateAgreement to arbitratePre-hearing conferencePre-hearing conferenceDiscoveryDiscoveryHearing Hearing AwardAward

Enforceability of Enforceability of Mandatory Arbitration Mandatory Arbitration

AgreementsAgreements 1 1

• Mandatory arbitration agreements, requiring Mandatory arbitration agreements, requiring employees to submit their employment employees to submit their employment disputes to arbitration rather than bring suit disputes to arbitration rather than bring suit in court, are generally enforceable.in court, are generally enforceable.

• The employee must agree, in writing. The employee must agree, in writing. • But like other contracts, arbitration But like other contracts, arbitration

agreements are subject to contract defenses.agreements are subject to contract defenses.• Under California law, arbitration agreements Under California law, arbitration agreements

will not be enforced if they are “will not be enforced if they are “unconscionableunconscionable,” both procedurally and ,” both procedurally and substantively.substantively.

Enforceability of Enforceability of Mandatory Arbitration Mandatory Arbitration

AgreementsAgreements 2 2

• A contract is “A contract is “procedurally unconscionableprocedurally unconscionable” ” if drafted by the party with greater if drafted by the party with greater bargaining power and presented on a “take bargaining power and presented on a “take it or leave it” basis without opportunity for it or leave it” basis without opportunity for negotiation or modification. negotiation or modification. – ExampleExample: cell phone contract: cell phone contract

• A contract is “A contract is “substantively unconscionablesubstantively unconscionable” ” if its terms are markedly unfair to the less if its terms are markedly unfair to the less powerful party, particularly by imposing powerful party, particularly by imposing limits and burdens on the less powerful limits and burdens on the less powerful party which are not shared by the other. party which are not shared by the other.

• What might be some of the legal What might be some of the legal concerns associated with mandatory concerns associated with mandatory arbitration?arbitration?

LEGAL CONCERNS ASSOCIATED LEGAL CONCERNS ASSOCIATED WITH MANDATORY WITH MANDATORY

ARBITRATIONARBITRATION

Lack of participation in selecting the Lack of participation in selecting the neutral.neutral.

Confidentiality.Confidentiality.

Elimination of remedies.Elimination of remedies.

LEGAL CONCERNS ASSOCIATED LEGAL CONCERNS ASSOCIATED WITH MANDATORY WITH MANDATORY

ARBITRATIONARBITRATION

Adequate notice.Adequate notice.

Procedural limitations.Procedural limitations.Curbs on discovery.Curbs on discovery.Time limits for the hearing.Time limits for the hearing.

The Ryan’s Family Steak The Ryan’s Family Steak Houses casesHouses cases

1.1. Floss v. Ryan’s Family Steak Houses, Inc.,Floss v. Ryan’s Family Steak Houses, Inc., 211 F3d 306, 2000 U.S.App.LEXIS 8523 (6th Cir. 211 F3d 306, 2000 U.S.App.LEXIS 8523 (6th Cir. 2000).2000).

2.2. Lyster v.Lyster v. Ryan’s Family Steak Houses, Inc., Ryan’s Family Steak Houses, Inc., 239 F.3d 943, 2001 U.S.App.LEXIS 1765 (8th Cir. 239 F.3d 943, 2001 U.S.App.LEXIS 1765 (8th Cir. 2001).2001).

3.3. Penn v.Penn v. Ryan’s Family Steak Houses, Inc.,Ryan’s Family Steak Houses, Inc., 269 F.3d 753, 2001 U.S.App.LEXIS 22408 (7th 269 F.3d 753, 2001 U.S.App.LEXIS 22408 (7th Cir. 2001).Cir. 2001).

4.4. Walker, et al, v.Walker, et al, v. Ryan’s Family Steak Ryan’s Family Steak Houses, Inc., Houses, Inc., 400 F.3d 370, 2005 U.S.App.LEXIS 400 F.3d 370, 2005 U.S.App.LEXIS 3915 (6th Cir. 2004).3915 (6th Cir. 2004).

• What would you include in an What would you include in an arbitration agreement?arbitration agreement?

Smart Practice – Smart Practice – Arbitration Agreements Arbitration Agreements 11

• A poorly drafted arbitration agreement is A poorly drafted arbitration agreement is likely to be unenforceable. If your firm likely to be unenforceable. If your firm decides to use arbitration agreements, avoid decides to use arbitration agreements, avoid provisions like these:provisions like these:– No selection of a neutral arbitratorNo selection of a neutral arbitrator– Employee pays excessive feesEmployee pays excessive fees– Remedies inferior to those granted by courtRemedies inferior to those granted by court– No minimum discovery processNo minimum discovery process– Many restrictions placed on the employee, Many restrictions placed on the employee,

but few on the employerbut few on the employer– Employer reserves the right to change the Employer reserves the right to change the

agreement at any timeagreement at any time

Smart Practice – Smart Practice – Arbitration Agreements Arbitration Agreements 22

• Some firms have tried to establish Some firms have tried to establish mandatory arbitration without gaining mandatory arbitration without gaining knowing consent, raising contract defenses. knowing consent, raising contract defenses. If your firm decides to use mandatory If your firm decides to use mandatory arbitration agreements, make certain that:arbitration agreements, make certain that:– They are in writing.They are in writing.– They clearly notify employees that they They clearly notify employees that they

are waiving their right to sue.are waiving their right to sue.– The employee understands the terms.The employee understands the terms.– The employee signs in writing to indicate The employee signs in writing to indicate

acceptance of the agreement.acceptance of the agreement.

Smart Practice - Smart Practice - DocumentationDocumentation

• Because employment decisions can Because employment decisions can have consequences months or years have consequences months or years after the events, HR managers after the events, HR managers should be careful to document should be careful to document decisions and the reasons for them decisions and the reasons for them at the time they occurat the time they occur..

• Such records are useful evidence in Such records are useful evidence in the event of a claim or lawsuit, and the event of a claim or lawsuit, and can help your firm avoid liability.can help your firm avoid liability.

Human Resource Human Resource Recommendations for Recommendations for

Adopting an Arbitration Adopting an Arbitration AgreementAgreement

Consider whether there will be a cost Consider whether there will be a cost savings in using arbitrationsavings in using arbitration

State the scope of the arbitration State the scope of the arbitration agreement.agreement.

Use simple, understandable terms when Use simple, understandable terms when drafting the arbitration agreement.drafting the arbitration agreement.

Have employees acknowledge in writing Have employees acknowledge in writing having received notice of the arbitration having received notice of the arbitration agreement.agreement.

Human Resource Human Resource Recommendations for Recommendations for

Adopting an Arbitration Adopting an Arbitration AgreementAgreement

Understand that the EEOC is not bound Understand that the EEOC is not bound by the employee’s agreement to by the employee’s agreement to arbitrate.arbitrate.

Determine if a new program should Determine if a new program should apply only to new employees.apply only to new employees.

Consider whether complaints will Consider whether complaints will increase.increase.

Consider whether the roster of Consider whether the roster of arbitrators is large enough.arbitrators is large enough.

Remedies For Remedies For Violations of Employment Violations of Employment

LawsLaws• Arbitration clauses in collective bargaining Arbitration clauses in collective bargaining

agreements (CBAs) agreements (CBAs) USUALLYUSUALLY do not bar do not bar those employees from going to court.those employees from going to court.

• Arbitration agreements do not prevent Arbitration agreements do not prevent employees from bringing complaints to employees from bringing complaints to government agencies like the EEOC, which government agencies like the EEOC, which may bring suit (even if the employee cannot-may bring suit (even if the employee cannot-Waffle HouseWaffle House case). case).

• Under Under EEOCEEOC, possible remedies include , possible remedies include attorneys’ fees, back pay, front pay, attorneys’ fees, back pay, front pay, reinstatement, hiring, liquidated damages, reinstatement, hiring, liquidated damages, compensatory damages and punitive damages.compensatory damages and punitive damages.

DISPUTE RESOLUTION DISPUTE RESOLUTION ORGANIZATIONSORGANIZATIONS

• American Arbitration Association American Arbitration Association (AAA)(AAA)

• Federal Mediation and Conciliation Federal Mediation and Conciliation Services Services (FMCS)(FMCS)

• Association for Conflict Resolution Association for Conflict Resolution (ACR)(ACR)– Georgia ChapterGeorgia Chapter

• Dispute Resolution Section of AmeriDispute Resolution Section of American Bar Associationcan Bar Association