Part I: How Workplace ADR Will Evolve Under the Biden Administration

By Antranik Chekemian

Anna Hershenberg, Vice President of Programs and Public Policy & Corporate Counsel, welcomed an online audience of nearly 200 attendees for the CPR Institute’s webinar “What Labor and Employment ADR Will Look Like Under a Biden Administration?” The Feb. 24 webinar was presented jointly by CPR’s Employment Disputes Committee and its Government & ADR Task Force.

This is the first of two CPR Speaks installments with highlights from the discussion.

Hershenberg shared background information for attendees who were new to CPR, and reviewed CPR activities. [Check out www.cpradr.org for future public and members-only events, including the March 25 program on Managing Conflict in the Workplace Remotely. For information on access and joining CPR, please visit CPR’s Membership webpage here.]

Hershenberg then turned the program over to Aaron Warshaw, a shareholder in the New York office of Ogletree, Deakins, Nash, Smoak & Stewart, who is chair of CPR’s Employment Disputes Committee. Warshaw described the Employment Disputes Committee as “made up of in-house employment counsel, management-side attorneys, employee-side attorneys, and neutrals. Throughout its long history, the committee … [has provided] a platform for all of the stakeholders to come together and explore ways to resolve disputes in employment matters,”.

Last year, the committee presented a panel discussion about COVID-19-related employment claims. (Video available here.) There was also a panel discussion on mass individual arbitration claims during last year’s CPR Annual Meeting in Florida.

Warshaw also noted that the committee is currently working on soon-to-be-released administered employment arbitration rules, and a workplace disputes programs. “There is also an active committee currently revising CPR’s Employment-Related Mass Claims Protocol,” he said.  The release of these projects will be announced at www.cpradr.org and on social media.

Warshaw then introduced the panel moderator, Arthur Pearlstein, who is Director of Arbitration for the Federal Mediation & Conciliation Service, a Washington, D.C.-based independent agency whose mission is to preserve and promote labor-management peace and cooperation. He also directs FMCS’s Office of Shared Neutrals and has previously served as the agency’s general counsel.

Pearlstein opened the conversation stating that “Joe Biden and Kamala Harris ran a campaign that reflected a closer alignment with organized labor than I think we’ve seen in a very long time.”

Pearlstein pointed out the remarks made by President Biden a week ahead of the CPR program, where the president called himself a “labor guy,” and referred to labor people as “the folks that brung me to the dance.” Pearlstein, however, noted that Biden “did hasten to add, ‘There’s no reason why it’s inconsistent with business-growing either.’”

Pearlstein further said that even though it had been just a month since the inauguration at the time of the panel discussion, already dramatic steps had been taken.  He cited the firing of the National Labor Relations Board’s general counsel.

The president has also issued a number of executive orders and halted some regulations. “He definitely wants to be seen as a champion of worker rights,” said Pearlstein.

Pearlstein added that Biden backs “the most significant piece of labor legislation since perhaps Taft-Hartley Act in 1947, . . . the PRO Act, that would dramatically change the landscape in the labor relations world in a way that’s very favorable to unions.” See Mark Kantor, “House Passes ‘PRO’ Act, Which Includes Arbitration Restrictions,” CPR Speaks (March 10) (available at https://bit.ly/38u5w87).

Biden also supports the FAIR Act which, if passed, could end mandatory employment arbitration, said Pearlstein, adding that Covid-19 in the workplace and the rights of gig workers are also important administration considerations. See Mark Kantor, “House Reintroduces a Proposal to Restrict Arbitration at a ‘Justice Restored’ Hearing,” CPR Speaks (Feb. 12) (available at http://bit.ly/3rze7y1).

Pearlstein introduced the panelists.

  • Mark Gaston Pearce is a Visiting Professor and Executive Director of the Georgetown University Law Center Workers’ Rights Institute. Formerly a two-term board member and chairman of the National Labor Relations Board, Pearce previously taught at Cornell University’s School of Industrial and Labor Relations.
  • Kathryn Siegel is a shareholder in Littler Mendelsohn’s Chicago office, representing employers in matters of both employment law and labor relations before federal and state courts and federal agencies like the NLRB and the Equal Employment Opportunity Commission, as well as state agencies.

Mark Kantor started off the conversation by focusing on two general areas:

a) the prospects for legislative change in the Congress for arbitration of employment and labor issues; and

b) the prospects for regulatory measures by independent or executive agencies in the absence of new legislation.

Kantor pointed out that the Forced Arbitration Injustice Repeal (FAIR) Act was reintroduced in the House and the Senate. The House Committee on the Judiciary held a hearing on the matter on Feb. 11.

He noted that, in the previous Congress, the legislation passed the House of Representatives by a 225-186 vote–all Democrats plus two Republicans. When it reached the Senate, however, “it went nowhere,” he said. “Not surprising,” he said, under Republican control, “There were no hearings, there were no committee markups, no committee activity, and the FAIR Act certainly never reached the floor of the Senate.”

In the current Congress, however, he noted, “We can expect the FAIR Act to pass the House of Representatives again, and then go to the Senate. Matters in the Senate might be a little different than they were in the last Congress. We can . . . expect committee activity, hearings, possibly a markup, maybe getting the legislation to the floor of the Senate.”

He said that Senate floor challenges exist for the legislation, because substantive measures are subject to a filibuster. Overcoming a filibuster requires 60 votes.

He added that Republicans are united in their opposition to the FAIR Act as it currently stands. Moreover, trying to avoid the filibuster by altering Senate rules to eliminate the filibuster runs into the problem that there are at least two Democratic Senators who will oppose that: Sen. Joe Manchin, from West Virginia, and Sen. Kyrsten Sinema from Arizona. Therefore, he said, “overriding a filibuster seems highly unlikely.”

A way to avoid the filibuster is budget reconciliation, said Kantor, which is the route that was  taken for the Covid-19 stimulus legislation. He noted, however, that the FAIR Act’s anti-arbitration provisions are unlikely to fall within the scope of budget reconciliation. He further explained:

That means there are very few formal ways to avoid the filibuster. Some people have suggested that Vice President Harris might simply override a parliamentary ruling that the legislation is outside the scope of budget reconciliation. That is also not likely to go anywhere, because Senators Manchin and Sinema will not support that. Consequently, you don’t have 50 votes out of the Democrats and you’re certainly not going to get any Republican votes to reach the threshold to allow Vice President Harris to make that decision.

Kantor then noted that there could still be other prospects for passage:

  1. Appending the FAIR Act or other legislation to a “must pass” piece of legislation:  “That’s exactly how restrictions on arbitration for consumer finance and securities arbitration, and whistleblower protections, was passed as part of the Dodd-Frank Act [in 2010], which did get 60 votes in support, because it was ‘must pass’ legislation,” he said.

  2. Narrow legislation: Kantor noted that during the Feb. 11 hearing, “the ranking minority member of the House Judiciary Committee, Rep. [Ken Buck, a Republican] from Colorado, did signal an interest in supporting two narrow areas of restriction. One was for sexual harassment and racial discrimination, and the other was to override non-disclosure agreements for those two types of disputes.” Kantor added that Buck’s support sends a signal that Republicans on the Senate side also may be “open to focus targeted legislation, aiming at those two narrow areas.”

Kantor also pointed out that a provision in the National Defense Appropriations Act, which is renewed annually, “prohibits mandatory pre-dispute arbitration for sexual harassment and Title VII claims under procurement contracts in the national defense area and subcontracts for those procurements. That is not controversial in the national defense contracting community.”

But the bottom line here, he said, is that the filibuster will determine whether the FAIR Act or any of the other pieces of legislation like the PRO Act, which contain restrictions on pre-dispute arbitration for employment and labor, have a chance of Senate passage.

On regulatory measures, Kantor pointed out that the 2018 U.S. Supreme Court Epic Systems Corp. v. Lewis decision “set a very high barrier to utilizing preexisting general statutory authority for administrative agencies, independent, or executive agencies. It said that in order to prevail, the claim must show ‘clear and manifest’ intention to displace the Federal Arbitration Act.”

He continued: “Congress would be expected to have specifically addressed preexisting law, such as the Federal Arbitration Act. That meant ‘no’ for the [Fair Labor Standards Act], ‘no’ for the [National Labor Relations Act], and in subsequent court decisions, also ‘no’ for Title VII, [the Americans with Disabilities Act], [and the Age Discrimination in Employment] arguments.”

As a result, he added, one “can’t generally rely on pre-existing labor relations legislation to override mandatory pre-dispute arbitration agreements.” But Kantor provided two possible avenues agencies could explore in order to not run into an Epic Systems problem. He explained:

One is that you could avoid Epic Systems by focusing on the prohibition of class procedures, and prohibiting a prohibition of class procedures in any forum–that would be litigation and arbitration, and therefore would be nondiscriminatory. Indeed, the Epic Systems decision says, in essence, the Federal Arbitration Act sets up a nondiscrimination approach to whether or not other acts can be utilized to prevent arbitration. If it’s focused only on a fundamental attribute of arbitration, then there might be conflict preemption by the FAA. On the other hand, if it spreads more generally, there might not be.

The second avenue would be to look at nondisclosure agreements as Rep. Buck mentioned during the Feb. 11 hearing. Kantor added that the FAIR Act covers employment, civil rights, class action, antitrust legislation, and consumer disputes. If passed, it would also prohibit pre-dispute joint-action waivers of those disputes in any forum.

* * *

Mark Gaston Pearce’s highlights focused on what is to be expected from the National Labor Relations Board with the Biden Administration.

Pearce started off with a focus on the composition of the five-member NLRB. by pointing out that even though Biden is in office, the majority of the NLRB is still Republican appointees, and that this will not change until August 2021.

He then discussed some of the NLRB cases. “There is a lot to be undone by the Trump board since the Trump board did a whole lot of undoing itself,” he said. He explained: “Among those things that the Trump board did was weakening the election reforms that were made in 2015,” said Pearce.

He explained that the Trump board changed union election rules by providing employers an increased ability to challenge and litigate certain issues prior to the election, and increased the length of time between the filing of a petition and the election date. “They were mandating that there should be a certain minimum time period to pass before an election,” he said.

Moreover, the Trump Board “lengthened the time period for an employer to serve a voter list and lengthened the time period for which an election is to be held if there was going to be a challenge to the [NLRB] Regional Director’s decision,” he said. [Among other things, Regional Directors are empowered to administer union elections.  See the NLRB’s Organization and Functions, Sec. 203.1 (available at https://bit.ly/3ls48Ij.]

Pearce explained, “All of those provisions and a few more were struck by a [federal] district court judge once [they] went into effect. The basis for . . . striking . . . those provisions was that the board had determined that these actions were strictly procedural, and therefore under the . . . Administrative Procedure Act, they were not obliged to go through the full notice and comment requirements.” The district court decision, however, has been appealed and it is currently pending before the D.C. Circuit Court of Appeals, he said.

Pearce added that it is unlikely a decision will be issued before a new majority is in place. He noted that “it’s very likely that a new majority will withdraw that appeal and those provisions of the new rule will never see the light of the day.”

Pearce said MV Transportation standards–from a 2019 NLRB decision on whether an employer’s unilateral action is permitted by a collective-bargaining agreement—will affect  arbitrators. In the case, he explained, the NLRB abandoned a standard requiring the employer to bargain over any material changes to a mandatory subject of bargaining unless the union gave a “clear and unmistakable waiver” of its right to bargain on the changes. The new standard is based on the “contract coverage.”

The “clear and unmistakable waiver” standard, Pearce explained, generally hindered an employer’s ability to make changes, so instead the board adopted the broader contract coverage standard for determining whether unionized employers’ unilateral change in terms and conditions of employment violated the National Labor Relations Act.

Pearce predicted that “MV Transportation will be revisited because the outgrowth . . . has been that unions, fearing that their position would be waived, are negotiating contracts with so many provisos or are likely to negotiate contracts with so many provisos in it that contract negotiations have become fairly untenable.”

He noted, however, that “with respect to arbitrators, there was always going to be an issue of whether or not, in fact, there is truly a contract coverage for the change that is being proposed,  and I don’t think parties are going to want to constantly go to arbitration over every little thing that they plan on doing.”

Pearce then discussed recent developments in the area of higher education. He noted that there was a proposed rule that graduate students not be considered as employees under the National Labor Relations Act. He added, however, that it was unlikely for that rule to be adopted as the majority will likely object to such status. He said he predicts that there is going to be an “increase in petitions filed for graduate student bargaining units in the universities.”

“On the other hand,” Pearce explained, “[Last year’s NLRB decision] Bethany College, which reversed [a 2013 board decision,] Pacific Lutheran, . . . has resulted in a policy that has emanated from the courts that religious universities do not have to show much to consider themselves to have a religious bent and direction and therefore exclude faculty from being able to unionize.”

He directed attendees to the recent NLRB General Motors decision. “General Motors changed the standards with respect to offensive speech . . . during the course of protected concerted activity,” he said. Pearce added that cases involving sexist and racist remarks set on the picket line is an area that should not have received protections under the NLRA, though he said he backed the board’s decision in the case.

* * *

Antranik Chekemian is a second-year student at New York’s Benjamin N. Cardozo School of Law, is a CPR 2021 intern.

* * *

You can read the rest of Antranik Chekemian’s report on the CPR seminar at Part II: More on Workplace ADR Under the Biden Administration (April 19), and Part III: Deference Change–Analysis of a Shift on a Labor Arbitration Review Standard (April 26).

[END]

Video Simulation Highlights the Need for a New Deal Point: The Prevention Neutral

By Amy Foust

A March 4 New York Law School Alternative Dispute Resolution Program presentation focused on the work of CPR’s Dispute Prevention Committee, centering on recognizing the inevitability of disagreements in complex business relationships, and the value of working to prevent problems from festering into conflict and formal disputes.

The program, “No Need to Resolve if You Can Prevent,” opened with moderator Noah Hanft, of New York consulting firm AcumenADR, noting that mediation was rare just a few decades ago, but is now common or even required in many jurisdictions.  He expressed confidence that dispute prevention, although unusual today, will be a part of ADR’s future.

Hanft, who was CPR’s president and CEO from 2014-2019, co-chairs the CPR Dispute Prevention Committee with Gregory S. Gallopoulos of General Dynamics Corp., in Falls Church, Va. The committee has worked with CPR to develop a dispute prevention panel of professionals to assist companies in developing techniques and processes to head off conflicts, and Model Dispute Prevention and Resolution Provisions. 

The model provisions assist with the appointment of a standing neutral for significant transactions, such as joint ventures where the parties envision a long-term relationship; a standby neutral, who is ready to step in but is not necessarily involved in regular meetings; or an agreement, without the appointment of a neutral, to work to recognize and resolve friction before it evolves into conflict.

CPR also offers a new Dispute Prevention Pledge for Business Relationships (it can be viewed and signed here) to recognize the importance of addressing conflict. The Pledge allows for contracting parties to incorporate dispute prevention mechanisms into business arrangements, such as the prompt identification of escalating conflicts or the appointment of a third-party neutral who will be engaged before disputes emerge.

Noting that the failure rate for joint ventures might be as high as 60%, the panel used portions of  a video from a January dispute prevention simulation at the CPR Annual Meeting to discuss how dispute prevention might work in a complex business scenario, with several of the #CPRAM21 presenters returning for analysis at the NYLS program. 

The video follows a hypothetical joint venture of two auto companies seeking to build a network of electric car charging stations. The scenario envisions perfunctory quarterly meetings, with increasing departures from projected results.  In one version of the scenario, there is no early intervention.  The failures lead to finger pointing and blaming.  Mediation fails, and the case goes to arbitration.

In a second scenario, a neutral attends meetings, and calls attention to the pattern of falling revenues before the parties have expressly addressed them.  Recognizing this as a likely source of future conflict, the neutral facilitates a conversation about the significance and causes of the departure from plan—a “constructive framework” for review. The parties work on a joint plan to revise the course of the deal or terminate the joint venture before a dispute emerges. 

The video segments also addressed overcoming objections to adding a dispute prevention clause to an agreement, distinguishing dispute prevention from a routine dispute resolution clause.  One mock negotiator dismissively described the appointment of a standing neutral as “like marriage counseling.” 

But panelist Deborah Hylton, a neutral who heads her own Durham, N.C., firm and who also played the role of the standing neutral in the CPR video, described the neutral’s role as more “guiding and facilitative,” akin to “an honest broker.”  She said the neutral can call out “the 500-pound. gorilla” neither side felt that it could address “for fear of signaling a weakness.” She described the value of the neutral’s ability to raise difficult issues.

Panelist Kimberly Maney, assistant general counsel at pharmaceutical manufacturer GlaxoSmithKline, based in Durham, N.C., spoke to the familiarity of the hypothetical scenario.  These relationships start in a great place, she said, but then “something goes not quite right,” and the relationship “moves to a scorched-earth posture.” 

Her business partners, Maney offered, would be happy to have a better option for managing conflict than burning the relationship to the ground.  Dispute prevention is helpful in allowing the parties to have a disagreement but still maintain a relationship, she noted.

Panelist Steven Bierman, a New York-based partner in Sidley Austin, noted that outside counsel and litigators are ultimately problem-solvers.  One way to help clients, he said, is to litigate or arbitrate a case, but another is to help clients anticipate problems and avoid litigation.  There will always be disputes to be litigated, Bierman said–if not this one, the next one.

In responding to audience questions, the panel encouraged counsel to engage the business executives involved in a large transaction in crafting a dispute resolution clause appropriate to the relationship the parties seek to establish. 

This is too important, Moderator Noah Hanft said, to be left to the lawyers.  Using ADR provisions as boilerplate copied from one agreement to the next is likely inadequate.  ADR clauses typically address how to resolve disputes, not how to manage the relationship to prevent disputes.

Furthermore, because the dispute prevention and resolution clauses govern the relationship, what worked in a prior relationship might not be in the best interests of a new relationship.  The best time to address these issues is at the outset, when everyone is on good terms. 

The program, hosted by NYLS ADR Skills Program Director F. Peter Phillips, is available at the program’s link above.  The CPR Institute has a web page devoted to the program, too, and it includes the video, here. Panelist Deborah Hylton also posted an article that expands on the Annual Meeting and NYLS programs that can be found here.

* * *

Author Amy Foust is an LLM candidate studying dispute resolution at the Straus Institute, Caruso School of Law at Malibu, Calif.’s Pepperdine University, and an intern with the CPR Institute through Spring 2021.

[END]

#CPRAM21: Managing Workplace Conflicts, On-site and Remote

If you missed the 2021 CPR Annual Meeting in January—the first free public meeting held online in the organization’s 40-year history—the videos are being posted on CPR’s YouTube Channel. While additional videos will be posted for CPR members only, the first, linked here on CPR Speaks, is open access and features the keynoters, CNN Anchor and Chief Political Correspondent Dana Bash and General James Mattis, who is former U.S. Defense Secretary. Click the Subscribe button at YouTube for alerts and for more CPR content. For information on full access and joining CPR, please visit CPR’s Membership webpage here.

By Antranik Chekemian

Kimberley Lunetta, who represents management in employment matters as of counsel at Morgan Lewis & Bockius, moderated a third-day CPR Annual Meeting panel on state-of-the-art best practices for addressing and resolving workplace disputes. The panel mainly concentrated on managing employees and disputes in the current remote environment, and how to set up an ADR program in order to prevent and resolve conflicts.

The Jan. 29 session included four panelists:

  • Alfred G. Feliu, who heads his own New York firm, is a longtime panelist for CPR Dispute Resolution and the American Arbitration Association’s commercial and employment arbitration and mediation panels. He is past chair of the New York State Bar Association’s Labor and Employment Law Section and a fellow of the College of Commercial Arbitrators and the College of Labor and Employment Lawyers.
  • Wayne Outten is chair and founder of New York’s Outten & Golden LLP, which focuses on representing employees. He has represented employees for more than 40 years as a litigator. He has long advocated for using mediation in employment disputes. His practice focuses on problem solving, negotiating, and counseling on behalf of employees.
  • Cheryl M. Manley is a veteran labor employment attorney with more than 25 years of  experience, and since 2005 has been at Charter Communications, where she is senior vice president and associate general counsel of employment law, leading the broadband/cable operator’s Employment Law Group.
  • Andrew J. Weissler is a partner in the labor and employment group of Husch Blackwell. He is a member of the firm’s virtual office, the Link, based in Bloomington, Ill. Weissler advises and represents public and private clients on workplace issues involving difficult personnel decisions.

Feliu and Outten are on a subcommittee of CPR’s Employment Disputes Committee that is working on a model workplace disputes program, along with a new version of CPR’s Employment Dispute Arbitration Procedure to be issued soon.

A poll conducted at the beginning of the panel showed that remote working was new for most of the participants.

Lunetta launched the discussion by asking Feliu about the threshold questions employers should ask themselves when considering an ADR program.

If the principal goal is avoiding litigation, responded Feliu, then employers “are really focusing on processing existing or incipient claims.” As a result, he said, employers “are going to focus more on arbitration–on ending up with a process that brings an ultimate result.”

But if the employer’s goal is more on problem solving and identifying tensions before they become disputes and the employer views conflict resolution as a strategic imperative, then the alternative approach of problem-solving should be embraced, he said. Here, the focus is different than pure litigation avoidance. Said Feliu, “Litigation avoidance or reduction of legal costs will be part–will be an effect, hopefully–of the problem-solving process but wouldn’t necessarily be the goal.”

This approach would also help the organization become more competitive, he said–to work more constructively and efficiently while, as an after-effect, avoiding litigation.

Feliu explained, “How do you do this? You do this is by opening up lines of communication, by necessarily undercutting to a certain extent the chain of command. You’re empowering employees to come forward with their disputes at whatever level and whatever the nature. And by doing that, you are creating a different kind of an organization that is less hierarchical, less structured, and more fluid.”

Wayne Outten added that ADR is ideal for workplace disputes. Because there already is an important relationship between both sides and the relationship is typically continuing, said Outten, it “is a perfect place for identifying problems and solving them early on.” He then presented two approaches that companies can embrace for dispute resolution procedures, the legal mentality and the human resources mentality.

The legal mentality, said Outten, is, “Let’s find a way to avoid lawsuits and to maximize the chances that we will win them with the least possible costs.” He said the HR approach is better, with goals of making employees happy and providing an environment where workers can be productive and focus on their jobs in an effective and efficient manner.

With the HR approach, Outten said, a program should start identifying problems at the earliest possible stage. “If a problem ripens into a dispute,” he said, the goal is “resolving the dispute in the simplest, quickest way possible and escalating only as and when you need to.” The HR approach also serves the lawyers’ perspective as it “tends to avoid disputes ripening into the possibility of litigation.”

Lunetta then asked the panelists whether having employees working from home in a number of states, possibly new states to the company, would affect the design of an ADR program.

Al Feliu responded that working from home would not alter or change the program itself, but it increases and amplifies “the need for it to be enforceable across 50 states and 50 jurisdictions.”

Wayne Outten discussed some of the positive and negative changes regarding the nature of workplace disputes that come with remote working. On one hand, the kind of disputes that arise from being in the same place, and having interpersonal reactions, presumably will be reduced with the increase in virtual offices, such as sexual harassment claims and bullying.

“On the other hand,” he said, “the opportunities for disputes are exacerbated because you don’t have as much free-flowing communication, and the ability to address things face to face.” Outten added, “Disputes may fester.”

From the management-side perspective, Husch Blackwell’s A.J. Weissler noted that the HR model Outten mentioned “has changed quite a bit in this remote work environment.” If the employees are typically working remotely, then having difficult conversations over the Internet should be acceptable, he said.  

But if a human resources or corporate employee is working from home while the business has essential workers who have been going to the employer’s worksite, then, says Weissler, “there’s a real disconnect there” that can make the on-site workers feel and sense that the employer is not in touch with the employee.

Moderator Kimberley Lunetta then asked panelists whether CPR has resources that can help employers think through these issues if they are considering any of the dispute resolution options that were discussed.

Outten said that this was the reason for CPR to be founded decades ago, with the goal of helping companies figure out how to avoid and resolve disputes.

Outten announced that CPR and its Employment Disputes Committee will be publishing a new set of rules for administered employment dispute resolution.  Accompanying the rules will include “draft programs that companies can adopt and adapt for their own use, which have within them the various different stages that employers can consider […] including things . . . [like] informal dispute resolution and problem solving, . . . open-door policies that invite people to take their problems up the chain of command,” ombudspersons, peer review processes and “all the way up to mediation which . . . is perfectly suited for employment disputes of all kinds.”

The conversation then revolved around the pluses and minuses for an employer of establishing a mandatory arbitration program.

“In reaching the decision that our arbitration program was going to be mandatory,” responded Charter Communications’ Cheryl Manley, “one of the factors that went into play was either reducing the litigation costs, or perhaps not having to deal with court litigation.” She mentioned that her company’s program was built to resolve issues in a timely manner and on an individualized basis.

She further added that her organization has many steps before getting to the arbitration phase to resolve the employment issue. And “when it finally does get to arbitration, we believe that there’s some certainty,” said Manley, “We believe that both parties have some skin in the game, in terms of selecting the arbitrator and primarily, it’s cost effective and efficient.”

Outten then answered a question about CPR’s employment ADR program and how it can help employers not only set up, but also ensure long-term success.

Outten reiterated the program’s strength in early-stage problem solving and early dispute resolution, and added that the program offers room for flexibility and adaptability in different workplaces.

Mediation with a third-party facilitator, he said, “can be extremely valuable and beneficial. It gives the parties an opportunity to air their grievances.” When it comes to arbitration, he said, every successful workplace ADR program really needs to comply “at a minimum,” with due process protocols.”

He then presented several key features of the due process protections (which CPR has adopted here), which include:

  • “The employee isn’t required to pay more than they would pay if they were going to file in court.”
  • “The arbitrator has the authority and power to provide any remedy that a court can provide so that there’s no takeaway of remedies for the affected employee.”
  • “The employee has a fair opportunity to pick the decision maker–the arbitrator–especially given the binding power of the decision of this person to resolve the dispute.”
  • “The employee has to have a full and fair opportunity to gather information in order to present the case and . . . [any] defenses.”
  • “The employee needs to have an opportunity to have counsel of his or her choosing.”
  • “The hearing itself should be reasonably convenient . . .  so the employee doesn’t have to go a long distance to have his or her day in court.”
  • Finally, “the arbitration should end with a reasoned decision, so the parties know what the arbitrator took into account, what the findings were on the evidence, and what the legal conclusions were in determining” the decision.

A.J. Weissler added that “there are great legal reasons” not to “cram down” arbitration in a workplace disputes program, citing fairness. He said that arbitrator selection is an important factor in presenting a fair process, with a say for the employees.

Al Feliu noted that there is a dearth of diverse panelists, but major providers have made strides and continue to work on the problem to enhance and ensure fairness.

Cheryl Manley agreed with the comments, and emphasized that panelists need to reflect the workplace population.

Manley discussed Charter Communication’s Solution Channel, which she described as a 2017 program to compel arbitration use—a mandatory program for newly signed-on employees, with about 10% of the company’s 90,000 employees opting out when it was launched.  She reported that the complaints are restricted to legal claims—non-legal disputes are addressed in other ways–that are submitted through a third-party vendor which create a record over the claim. She said the American Arbitration Association is the provider.  The company absorbs the AAA filing fees and the arbitrator costs. If either side is unsatisfied with the panel, they return to the AAA for more choices.

Weissler says arbitration should be part of any dispute resolution system but if it’s made mandatory and employees are forced to use it, he said, it is counterproductive and it creates problems going forward due to the “asymmetrical” views.

Weissler said he encourages mediation as a best option. He said he is skeptical of programs that outline steps that do not allow a course of mediation to be developed.

Feliu says he has been mediating for 30 years and familiarity has grown during his period of practice after skepticism.  He agreed with Weissler’s points, but noted that mandatory mediation in New York federal court, where he said he would have expected resistance—mandatory is counterintuitive, said Feliu—it has been just as successful as voluntary mediation over about the past 10 years.

Feliu said sometimes there is grumbling but mostly, when parties get to the bargaining table, they try to settle. And he said that while joint sessions are fading, flexibility is needed.  “Every mediation is different,” he said.

Wayne Outten said that he shared Al Feliu’s experience.  In the mid-1980s, he said, the plaintiffs’ bar “viewed this newfangled process as a conspiracy to take away their rights, and I soon discovered that was not necessarily the case and became a big advocate.”

Over the past 35 years, said Outten, mediation “has become quite normal.” He echoed Feliu again,  noting that when parties attempt mediation in good faith, it is successful.

Even in situations with a lot of open issues, he said, mediation “has a very high success rate, . . .  and is always worth trying.”

Cheryl Manley said that pre-pandemic, her company didn’t want anything done virtually or remotely—all depositions, mediations and arbitration hearings were done in person, exclusively.  The change was swift, she said. “Fast forward seven, eight, nine months, . . . when we finally emerge from this pandemic, we aren’t going to go back to all depositions in person, all mediations in person or hearings,” said Manley, adding, “In fact, I think that there is no reason . . . to start putting people back on planes traveling all over the country.  It is expensive. It’s time consuming.  And it is not efficient. “ She said that the “only issues” are “the occasional technological” problems.

A.J. Weissler said he has participated in virtual matters frequently during the pandemic, and found “an incredible benefit.” Having the people resources ready on video, whether from home or for those back in their offices, has “been an incredible thing,” he said, adding that he strongly supports virtual mediations.

Wayne Outten said he always has had a concern whether real decision makers would be in the mediation room.  “Now with virtual mediations,” he said, “that problem can be more readily addressed.”

Al Feliu said he has only done virtual mediations since his first in March.  “All of the impediments, and all of the arguments against them, have been rebuffed, “ he said. For example, he explained, he can evaluate credibility better on close-up video than across a bargaining table.

Feliu conceded that there is a different feel in an in-person gathering where people have committed to the process.  That intensity, he said, isn’t present where people are sitting on their couches, are more relaxed, with their dogs nearby.  “It’s just a different process,” he said.  “I don’t have the shrieking episodes. I don’t have a lot of emotions.  Is it good or bad? It’s just different.”

The result, he said, has been that he isn’t settling cases on the first day as much as he did at in-person mediations.

Addressing audience questions, Al Feliu said he discusses confidentiality with the parties with heightened concerns, noting that a potentially serious issue could be where extra people are present, and not visible on screen, as well as individuals texting on the side. “These are all serious concerns we need to get equilibrium on” going into the mediation, he said.

* * *

The author, a second-year student at New York’s Benjamin N. Cardozo School of Law, is a CPR 2021 intern. Alternatives editor Russ Bleemer contributed writing and research to this report.

[END]

How Litigants View the ADR Options in Courts

By Alice Albl

At the Sept. 17 online CPR Institute Mediation Committee meeting, University of California, Davis, School of Law School Prof. Donna Shestowsky presented her research about the role courts play in encouraging alternative dispute resolution over a trial.

The study revealed that litigants seem to be unaware of ADR options when going to court, although knowing about some of these options—specifically, mediation–improve litigants’ opinions of the court itself.

This lack of awareness stayed relatively consistent among demographics, even among those with legal representation.  

“Repeat player” litigants were less likely than first timers to report uncertainty or confusion whether ADR options were available.

Shestowsky’s research observed the experiences of more than 350 litigants spread among the court systems of three different states.

The first system, in California, allowed litigants to choose between a trial, or opting into mediation or arbitration.

The second system, in Utah, assigned mediation as the default option but allowed litigants to convert their cases into an arbitration or trial.

The third system, in Oregon, statutorily required nonbinding arbitration for cases involving amounts in controversy less than $50,000. Litigants could opt-out by filing a “Motion for Exemption from Arbitration,” or by agreeing with their opposition to enter mediation.

All three court systems posted information online about available ADR programs and kept a list of approved neutrals on file. None required attorneys to educate their clients about the available ADR options.

Litigants in the study took a survey before and after their journey through the courts. The questions sought to gauge litigants’ awareness about relevant court-sponsored ADR programs, whether legal representation affected their awareness, and how awareness of court-sponsored ADR affected litigants’ opinions of the court offering the options.

The data Shestowsky reaped from these surveys revealed some unexpected findings. While roughly half of the litigants were unsure whether mediation and arbitration were available to them, another 20% wrongly stated these options were unavailable.

Without knowledge of the court systems’ sponsorship for mediation or arbitration, litigants most often considered negotiation as a means for dispute resolution, even before the prospect of a trial.  

While about a third of litigants considered mediation, knowing that the method was a court-sponsored option generally improved their opinion of the sponsoring court system.

Arbitration was only considered by about one quarter of the litigants, and knowledge of court sponsorship did little to affect litigants’ opinions of sponsoring courts. Shestowsky attributed this to the possibility that litigants had low opinions of arbitration as an option for their court-filed cases, which aligned with findings from her past research.

Having a lawyer did not make litigants more aware of ADR options, even when those options were offered, or even mandated, by the court system.

Shestowsky pointed out this universally low awareness rate of ADR options as an issue to address among courts, especially given how awareness seemed to improve court favorability.

One possible solution would be rules that require attorneys to properly educate clients about ADR options before engaging the courts, which could be enforced using penalty fees or an affidavit.

Shestowsky also suggested that courts implement “direct education.” This could involve bolstered advertisement of ADR options, a dedicated ADR helpdesk, and periodic information sessions. The professor, who serves as UC Davis School of Law’s Director of the Lawyering Skills Education Program, even envisioned an artificial intelligence-powered digital aide that could recommend options based on litigants’ specific needs.

While Shestowsky cautioned that her research focusing on three court systems may not perfectly reflect the general state of ADR awareness, the consistency of data among the diverse systems could point to a greater trend. To gauge this, the professor recommended that courts across the nation buck the trend of measuring success for ADR programs by their usage rates, and first look to their awareness rates by surveying those who do not use their ADR programs.

* * *

Donna Shestowsky previously discussed her research at “New Research Sheds Light on How Litigants Evaluate the Characteristics of Legal Procedures,” 34 Alternatives 145 (November 2016) (available at https://bit.ly/2ScA71w), which adapted and updated material from Donna Shestowsky, “How Litigants Evaluate the Characteristics of Legal Procedures: A Multi-Court Empirical Study,” 49 U.C. Davis L. Rev. 3 (2016) (available at http://ssrn.com/abstract=2729893).

* * *

The author, a CPR Institute Fall 2020 intern, is a second-year student at Brooklyn Law School in New York.

Committee Q&A: A Conversation with Mediation Committee Co-Chair, Marjorie Berman 

marjorieberman

As part of our continuing “Committee Q&A” series, we sat down recently with Mediation Committee Co-Chair, Marjorie Berman of Krantz & Berman (pictured), to learn more about what this committee has been up to and has planned for the future.

~ ~ ~

The Mediation Committee consists of CPR members throughout the world and aims to enhance the quality and effectiveness of corporate mediation practice, both domestically and internationally.  The Mediation Committee recently released Mediation Best Practices Guide for In-House Counsel: Make Mediation Work for You, a CPR members-only guide with insider tips from in-house counsel on how to navigate every step of the mediation process (digital copies available to CPR members at no cost).  The Mediation Committee meets quarterly to collaborate and share best practices and put on programs of interest.   In addition, the Committee works to identify qualified neutrals to serve on CPR’s Panels of Distinguished Neutrals. You may find online, CPR’s Mediation ProcedureFast Track Rules for Mediation, and International Mediation Procedure (2017), as well as other industry-specific protocols.

Q. What are some of the specific issues that the Mediation Committee has focused on recently, and how?

A. I am a relatively new add to the committee but, looking back at just the past two meetings we’ve held, the first was on the Singapore Convention. We worked to fashion a program that would be meaningful – and useful – to people at all levels, including some who may not be as familiar with international law.  And at our most recent meeting, we focused on the very timely topic of confidentiality in mediation.

There has been a recent vintage of challenges to the confidentiality of mediation in the courts. Eugene Farber and Professor Nancy Rogers of the Ohio State University Moritz College of Law spoke, and the meeting was super lively and chock full of information. The event also inspired a very strong dialogue among the participants with respect to both knowledge and practice tips on anticipating that such issues could arise.

Q. Can you give us a preview of some of the important issues the Mediation Committee will be focusing on in the coming year?  

A. One long-term focus of the committee is an even closer look at this issue of confidentiality in mediation. Because candor between a mediator and parties is essential, mediation depends upon the privileges and confidentiality that protect those communications. The law protecting mediation communications is a patchwork of federal and individual case statutes, case law and rules of conduct that vary across jurisdictions.

This project will inform practitioners of the law and rules governing mediation confidentiality by jurisdiction so they can prepare themselves in the event they need to mediate in an unfamiliar locale. In fact, as people are reading this, and they have personal experiences with challenges to confidentiality and being put in the spotlight in a litigation – not where mediators wish to be! – I encourage them to share those stories with the committee.  

Q. What have you personally gotten out of participating in CPR’s committee structure, and what would you say to busy CPR members about why they should become more involved?

A. Even in the short term in which I’ve been intensely involved, participation in the committee has given me exposure to a wide variety of mediators working in many different contexts, and to a breadth of mediation practices. We can all so easily develop a narrow focus in our work, so it is especially valuable to get perspective from all angles – including from inside and outside litigators using mediation, mediators doing mediation, mediators working both in the US and around the world and academics studying mediation.

Q. Why would you encourage people to join CPR’s Mediation Committee in particular?

A. To some degree mediators tend to be in a bit of a closed world. They mediate cases and its often just them, in a room as a mediator. Being a part of such a dynamic and interactive group expands your view and allows you to process and grow both your perspective and your practice. This is valuable whether you’re a mediator trying to develop your own practice, or a litigator from a corporation or a law firm who is involved as a participant, trying to get a perspective of where mediators are coming from – because you can’t have that kind of conversation with your own mediator.

Committee participation also provides the broader opportunity to act as a thought leader, helping to improve the effectiveness of mediation and to shape best practices. Mediation is a very dynamic area where small changes can produce big results in terms of outcomes, and this committee offers an opportunity to become a meaningful part of that.

Marjorie Berman of Krantz & Berman LLP represents civil litigants in business disputes, employers and employees in employment conflicts, and individuals in white-collar criminal matters.

~ ~ ~

CPR committees are always looking to increase membership and participation, and there are no extra fees or costs associated with joining. Learn more about CPR’s other industry and subject matter committees here. To become a committee member, log in and join the committee(s) of your choice or email a note of interest to Richard Murphy at rmurphy@cpradr.org.

Take your seat at the table, along with
other thought leaders in your industry.

JOIN A CPR COMMITTEE TODAY