Arbitration

1. Arbitration Class 1

2. Administrative • Give quiz

3. Review • Factors that shape whether mediation occurs • Mediation and Impartiality • Mediation Outcomes • The truck and tire negotiation

4. Today • What is Arbitration • Employment Arbitration and other contracts of adhesion • Due Process • The Due Process Protocol

5. I. What is arbitration? • Assistance to two (or more) disputing parties by a third party who has the authority to make a binding decision • Voluntary versus compulsory arbitration

6. II. Employment Arbitration and other Contracts of Adhesion • What is a contract of adhesion? Examples? • Example – Moving companies • Do you have a choice? • What is your alternative? • Many employers now routinely require all employees to sign a contract agreeing to arbitrate any and all employment disputes • Involves giving up any right to sue, even over disputes involving statutory rights • Do you have a choice in signing such an agreement?

7. II. Statutory Rights • What are statutory rights? • Can you provide examples of statutory rights you might have in your relationship with • Your neighbors? • Your family? • Your students (if you are a teacher) or your teacher (if you are a student)? • Other examples? • Are you or can you be required to arbitrate any disputes of this kind?

8. II. Statutory Rights • Examples that might become subject to dispute at work? • Discrimination • Entitlement to reasonable accommodation • Entitlement to minimum wage or overtime pay • Pension protection • Termination bonus

9. II. Statutory Rights • Example – The case of Jamie Leigh Jones • Background and the Issue • The employer claims she waived her right to sue in signing her 2005 employment agreement requiring that she arbitrate any workplace disputes • Jones asked a federal judge to disregard the arbitration agreement • Since then law has changed, forbidding military to contract with companies that require employees to arbitrate sexual harassment claims

10. III. Due Process • What is “due process?” • Why is it a special concern with pre-dispute arbitration agreements at work? • Is your employer obliged to honor the rules of “due process” in her/his dealings with you? • What “due process” rights would you have if you sued your employer?

11. IV. Due Process Protocol • 1995 Due Process Protocol • What did protocol require? • Right to representation by someone of the employee’s choosing • Right to discovery under arbitrator’s supervision • Training for arbitrators in requirements of statutes involved • Employer to pay most costs but division of costs not disclosed to arbitrator • Arbitrator can impose any remedy available in court • Awards final and binding

12. Next Time • Variations on the theme of arbitration

13. Arbitration Class 2

14. Administrative • Return quiz • Collect critique 4 • Second negotiation exercise begins next class • Dolphy Day – check announcements

15. Review • What is arbitration? • Contracts of Adhesion and Pre-dispute Arbitration Agreements • Statutory Rights and Due Process • The “Due Process Protocol” for employment arbitration

16. Today • Recent Cases • How do arbitrator’s decide cases? • What incentives do these alternative decision models create? • The Goldberg Model

17. I. Recent Court Cases • What should be the law in this area? • When should employers be able to compel arbitration? • When should employees have the right to go to court? • How about customers of moving companies? Building contractors?

18. I. Recent Court Cases • Skirchak v. Dynamic Research Corp. • Seawright v. American General Financial Services • Brady v. Williams Capital Group

19. II. How Do Arbitrators Decide Cases? • Suppose arbitrators “always” compromise between the positions of the disputants? • Suppose arbitrators decide cases by a set of principles? • Suppose arbitrators decide cases randomly?

20. III. What incentives do these alternative decision models create? • Compromise? • Principles? • Random decisions?

21. Example • One friend “owes” another $1000 • That friend has refused to pay it back, saying it was a gift • The lender claims it was a loan but that she has lost the IOU indicating that • What will the arbitrator do?

22. IV. The Goldberg Model • How is the Goldberg approach different from conventional arbitration? • What is the reason for this modification?

23. Example • Negotiating a marital separation • The background • The principles the arbitrator uses • Will the parties be able to reach an agreement? • What will the agreement look like? • Why? • Divide class and have them attempt to reach agreement

24. Information for the Case • The background • Two children 10 and 6. Both parents want custody of the children • Husband and wife both work outside the home • Husband earns 20% less than the wife (He earns $40,000 and she earns $50,000) • They have a house with worth $135,000 with $100,000 still to pay on the mortgage • The principles the arbitrator uses • Mothers retain primary physical custody of children with visitation rights for the father • The non-custodial parent must pay child support of $500 per month per child • Non-custodial parent must pay alimony only if after child support he/she earn at least 10% more than the custodial parent. Must pay half of all amounts over that 10% more • Custodial parent must pay alimony if before child support he/she earns at least 100% more than the non-custodial parent. Must pay half of all amounts over that 100% more • House remains with custodial parent and each parent must pay half of mortgage and taxes until youngest child is 18 at which point the house will be sold and proceeds divided equally

25. Example • Parent insists child (16 years old) be home by midnight on weekends • Child argues for 2:00 AM curfew • Parent insists child mow the lawn and shovel the driveway • Child argues for payment for those chores • Arbitrator rules • Will parties negotiate before implementation of the award? What outcome?

26. Next Time • Begin 2nd negotiation exercise • Begin Topic of Arbitration Variations after the break