The ADR Legacy of CPR’s Founding Father, James F. Henry–In Memoriam

Jim Henry

CPR’s founder, James F. Henry, has passed away.

He leaves behind a legacy trailblazing the use of methods other than litigation to resolve business disputes. His impact is immeasurable.  He is responsible for promoting processes, techniques, and tools for alternative dispute resolution for major business conflicts, and expanding its use by lawyers throughout the world.

He founded and then served as president and chief executive officer of CPR, overseeing its initial initiatives with a group of in-house counsel to later include law firm practitioners, academics, and international firms and partner organizations, from CPR’s inception until his 2000 retirement. 

Even after his retirement, he continued to advocate for better dispute resolution, writing–including in Alternatives to the High Cost of Litigation, which he founded in 1983 (and for which he served as publisher during his CPR years)–and occasionally speaking.

CPR established the James F. Henry Award in 2002. It honors outstanding achievement by individuals for distinguished, sustained contributions to the field of ADR, based on their leadership, innovation and sustaining commitment to the field.

“We’re all privileged and humbled to be walking in Jim Henry’s footsteps,” said Allen Waxman, CPR’s president and chief executive officer since 2019. “He foresaw in a way many others did not the need for business to find better ways to resolve their conflicts than what court systems might offer.  He was a maven for innovation, pushing for greater creativity, efficiency, and fairness in ADR processes.  We are all beneficiaries of his work and leadership.”

Henry died on Aug. 28. He had lived in Waccabuc, N.Y., where he resided for seven decades. He was 91.

Henry’s family has announced a celebration of his life on Sunday, Nov. 13, at 3:00 p.m., in Waccabuc.  They have asked that if you are able to attend, please let the family know so that they can send you an invitation.  The contact is Stephen Henry at shenry@henrylacey.com.   

Henry founded CPR in 1977 to continue previous foundation work on social justice issues that included studying poverty, Native American issues, and tropical disease eradication. In due course, it became the Center for Public Resources (later to change to the International Institute for Conflict Prevention and Resolution); its subject focus was business ADR. His delivery devices included new sets of conflict resolution rules, tools, initiatives and programs. (A timeline of Henry’s and CPR’s history is available on CPR’s website here.)

Initially, he and the organization championed mediation and negotiation. He strove to have lawyers talk first before marching to courts. That resulted in the mid-1980s in CPR’s signature “Pledge,” the Corporate Policy Statement on Alternatives to Litigation. (See background and text https://bit.ly/3CDmyjH.)  Under the nonbinding pledge, a company agrees that it will consider—and be ready to negotiate–a resolution with the dispute resolvers at its adversaries.  

The pledge idea spread from CPR to companies throughout the legal world.  It became CPR’s signature effort in the 1980s.  Thousands of big companies and subsidiaries signed on.

That led to a similar pledge for law firms—that they would discuss with the clients in appropriate case the use of ADR. Industry commitments followed, in which groups of businesses agreed to resolve, by negotiation or mediation, specific disputes that arise among the competitors within those industries. (The pledges and commitments can be seen here.) Similarly, Henry spearheaded efforts at CPR to bring together academics and attorneys at all levels to translate theory into effective practice.

The resonance of Henry’s CPR pledge continued well after his retirement, and continues today. In 2012, a “21st Century Pledge” modernized the idea to institutionalize the pursuit of corporate ADR systems. 

CPR has continued this tradition of pledges seeking innovation in dispute management by recently establishing a pledge that businesses will consider incorporating mechanisms into their arrangements with others, not just to resolve disputes, but prevent them altogether.  See CPR’s Dispute Prevention Pledge for Business Relationships (revised April 5, 2022) at www.cpradr.org/resource-center/adr-pledges/dispute-prevention-pledge-for-business-relationships.  

The pledge didn’t stand alone at CPR, even in the mid-1980s.  With the assistance of the late Harvard Law School Prof. Frank E.A. Sander, Henry established the CPR Awards (go here for details on this year’s awards-entry deadline next month and submission instructions), to recognize but also to incentive business and academic development of the processes and systems that CPR began to produce, including nonadministered arbitration rules and guidelines for establishing and using minitrials

Those resources and materials, and many others including international and translated versions, are still vital, and can be found on CPR’s website at https://bit.ly/3ryxCID. (Sander became the longest serving member of Alternatives’ editorial board, from its 1983 inception until his death in 2018.)

Henry correctly projected that private ADR forums initiated by companies and industries would continue to proliferate after CPR’s 1980s work. He cited and worked to expand corporate dispute resolution programs ranging from employment settings to case management. He later worked with court administrators on programs that impacted the installation of ADR offices by Presidents George H.W. Bush and Bill Clinton in the 1990s in every federal court in the nation, as well with executive branch government ADR officials. And he expanded CPR’s initiatives to arbitration rules and ethics standards for ADR providers and practitioners.

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Henry’s principle delivery system, however, actually was the lawyers themselves.

Exhibiting a lifelong devotion to improving society through law, Henry continually emphasized best practices in lawyering.  He had confidence that excellent legal skills would bring the informal dispute resolution processes that had been performed for years to a valued place in legal operations and management.

Henry set out to assemble those people, and make them available to disputes.  CPR Dispute Resolution has grown its Panel of Distinguished Neutrals to more than 600 neutrals today, and has addressed cases valued in the billions of dollars.

Henry saw the work of lawyers as the key to ADR success, as well as CPR, a New York-based nonprofit.  He was a tireless cheerleader throughout his tenure as CPR’s president and CEO until his 2000 retirement for bringing out the best in the legal profession, and making ADR skills a requirement.

That in turn created a network of devotees to, and members in, what came to be known in the mid-1990s as the CPR Institute for Dispute Resolution, ahead of the current name that added the international perspective begun under Henry. CPR members have led in the use of commercial conflict resolution for their clients’ problems, both in house and at law firms, world-wide.

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Jim Henry was born in 1930 in Grand Rapids, Mich., and attended Williams College.  He later served as a U.S. Army Intelligence Officer, and was awarded law degrees from the Georgetown University Law Center in Washington, D.C., and the New York University School of Law.

CPR President Allen Waxman said, “On behalf of the board and staff at the International Institute for Conflict Prevention and Resolution, we send deepest condolences to Jim’s wife, Susan Henry, and their three children and eight grandchildren.”            

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The November issue of Alternatives to the High Cost of Litigation has published an expanded version of this tribute to Jim Henry’s life.  See CPR News, 40 Alternatives 154 (November 2022) (available at https://bit.ly/3DgLuMV). An archive of Henry’s Alternatives feature articles can be accessed directly on the Wiley Online Library at https://bit.ly/3ylmkLs.

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CPR Amends Its Employment-Related Mass Claims Protocol

The International Institute for Conflict Prevention and Resolution has announced amendments to its Employment-Related Mass Claims Protocol–the ERMCP or Protocol.

The ERMCP provides an innovative mechanism for more efficient and effective resolution of a mass of employment-related cases. The Protocol features a “Test Case Process” followed by a global mediation process informed by the Test Cases.

The ERMCP incorporates CPR’s Administered Employment Arbitration Rules.

An initial set of revisions to the Protocol by a CPR Task Force comprising leading counsel from the plaintiff’s bar, in-house employment counsel, corporate defense attorneys, and neutrals (arbitrators and mediators) was produced in April 2021 in connection with the release of the CPR Administered Employment Arbitration Rules (see CPR Speaks (April 14, 2021).  A second set of revisions that, among other things, incorporated CPR’s Due Process Protections, and makes changes to align with CPR’s updated Diversity Commitment, was promulgated in October 2021 (see CPR Speaks (Oct. 14, 2021).

The just-released Version 2.1 ERMCP amendments arise from CPR’s administrative experience under the Protocol. These changes relate to payments under the Protocol as well as additional clarifications on timing and the opportunity to mediate cases outside the mediation process.

CPR has added a requirement that, subject to any applicable fee waiver, claimants pay a part of the appointment fee as specified on the CPR Fee Schedule, which, in keeping with CPR’s Due Process Protections, will in no event be greater than the court fee required to file an action in a court of competent jurisdiction at the place of arbitration, or if none is specified, in the county of the claimant’s primary place of residence.

The Protocol also specifies that the appointment fee from both the claimant and the respondent in a particular case must be received by CPR prior to provision of a slate of candidates for that case. See Paragraph 4 of the Protocol here and the CPR Fee Schedule for details.

In light of questions received, Version 2.1 also makes clear that the parties may engage in a mediation (other than the ERMCP) at any time during the mass claims process, including during the Test Cases. It provides that any such mediation will be administered by CPR under the CPR Mediation Procedure. (See Footnote 21 of the Protocol.)

In response to other questions, Protocol Paragraph 6 also clarifies that the parties may jointly request an abeyance in connection with a mediation or otherwise of any pending arbitration. If an arbitrator has been appointed, the arbitrator will decide whether to approve such request.

CPR Dispute Resolution Services Senior Vice President Helena Tavares Erickson noted, “We always seek to improve on our innovations as we learn from experience and always welcome and appreciate the feedback provided by the users of our services and products.”

FAQs for the new ERMCP 2.1 can be found here

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Mediating Commercial Disputes: Understanding the Process to Maximize the Benefits

By Mia Levi

Mediation is a process in which a neutral third party—a mediator—meets with the disputing parties and actively assists them in reaching a settlement. Mediation is private and confidential, flexible, and more informal than other processes such as arbitration or litigation. It is concluded expeditiously, allowing parties to settle the dispute or narrow their issues at moderate cost. The overwhelming majority of disputes in mediation (70% to 80% of commercial disputes) settle, and because the outcomes are mutually agreed upon, they have high rates of compliance.

Mediation is able to preserve relationships because the emphasis is on the interests of the parties—process flexibility allows the people involved to find the best path to agreement. Parties may adapt the procedure to their own needs and can explore a wide range of remedies that might not have been available to them in court. It’s also more predictable than a trial decided by a judge or jury, avoids a “win or lose” outcome, and allows for an amicable resolution that may preserve the parties’ relationship. The goal is to resolve problems in a principled fashion (or reach an impasse) and move on.

But often, parties may be hesitant to agree to mediation. This can be remedied by understanding which kinds of disputes are suitable for mediation, when to schedule the mediation so that it is most successful, and, finally, how the mediation process itself works.

Is the Dispute Right for Mediation?

It is possible that the dispute at hand is not suitable for mediation. The ADR Suitability Guide, published by the International Institute for Conflict Prevention & Resolution (CPR), outlines three factors parties should consider in deciding the suitability of a case for mediation: (1) the parties’ goals for managing the dispute, (2) the suitability of the dispute for a mediation process, and (3) the potential benefits of mediation in relation to the specific dispute being considered.

First, looking at the parties’ goals, if there is a desire to maintain a working relationship, maintain control over the outcome, limit costs and disruption, and maintain privacy, then mediation may be a preferable tool. Second, for the dispute to be suitable for mediation, there should be no deep desire for vindication or revenge by the parties, no need to attain legal precedent, and no extreme power imbalance. Third, the potential benefits of mediation include allowing the parties to explore mutual needs and interests confidentially, providing an opportunity to be heard, providing a “reality check” for internal decision makers, helping to clarify the issues, and providing the opportunity to have an intermediary help frame proposals and present offers and counteroffers. Parties should weigh all these factors in making the decision to mediate.

Among dispute resolution processes, mediation offers a maximum degree of confidentiality and privacy. Contractual and legal protections provide additional assurances against the use or disclosure of mediation statements or documents. These confidentiality protections contrast sharply with the public nature of the litigation process and its procedures that encourage public disclosure. If parties are looking to attain a ruling that will contribute to legal precedent or require articulation of public policy, mediation likely is not the proper forum.

When Should Parties Mediate?

There is no one right time to conduct a mediation. Including a mediation step (prior to arbitration or litigation) in the proceedings is an easy way to ensure that the parties discuss settlement options. When mediated, many cases are settled or partially settled at the initial stages of the case. Settling even part of the dispute up front can make the arbitration hearings or litigation shorter and less expensive. The opportunities to reduce the costs and wear and tear of court proceedings are greatest before litigation has commenced, but mediation may be a sensible option at any point in the litigation process, even while an appeal from a trial court judgment is pending. Parties not ready for mediation at the outset of the case may be more receptive as it runs its course.

Indeed, the timing of mediation may be rendered somewhat inflexible when parties contract for a sequential, multistep dispute resolution. While tiered dispute resolution clauses may get parties to the mediation table, these provisions may not assist parties in achieving this goal at an ideal time in the life of their dispute. Some parties may find it more beneficial to mediate their dispute after some discovery has been exchanged. Parties should continuously keep an open mind as opportunities for settlement arise throughout the proceedings. It is not uncommon for cases to settle during or even after the hearings. Sometimes, an additional mediation session after some discovery is effective in reaching a settlement.

For those parties contemplating mediation in conjunction with arbitration, the Concurrent Mediation-Arbitration Clauses and Protocol, which CPR introduced in July 2020, allows the parties to agree they will attempt to settle any dispute that is the subject of arbitration by confidential mediation conducted during the pendency of the arbitration. This process was developed to encourage the availability of mediation to parties in a more flexible manner than is provided under standard multistep dispute resolution provisions. This, in turn, creates an opportunity for parties to continue to explore settlement options based on what they learn during the arbitration proceedings and without delaying those proceedings.

What Should the Parties Expect from Mediation?

Parties who have not written mediation into their contract or dispute resolution clause may need to execute a submission agreement—essentially an agreement to submit the dispute to mediation with an alternative dispute resolution (ADR) provider—or they may agree to mediate in an ad hoc process. Notably, an ADR provider will be able to assist the parties in selecting the appropriate mediator for their dispute.

Many ADR institutions provide opportunities for parties to further streamline the mediator-appointment process. For example, streamlined mediator appointment is suitable for disputes where the parties wish the ADR provider to choose a mediator for them. Parties submit information about their dispute and the candidate sought, and the ADR provider will make the selection based on the information provided by the parties and vet the candidate for conflicts purposes before the appointment. This streamlined process lowers administrative costs and allows the parties greater speed in getting a mediator appointed and the process underway.

The process itself will depend on the mediator selected. Mediators will have different styles of mediation. On one side of the spectrum, facilitative mediators will work with parties to find creative solutions that meet the interests and needs of the parties. This will be beneficial for cases where parties wish to continue a personal or business relationship. On the other side, evaluative mediators will offer an opinion regarding the relative strength of each side’s legal arguments and generally will predict the likely outcome if the parties were to bring the case to trial. Mediators may also offer a hybrid style, combining the two.

Conclusion

Understanding the mediation process will help parties gain more advantages from the mediation itself. It is important for parties to realize that while settlement of their dispute might be the most desired outcome, an impasse does not mean that the parties have failed. If parties narrow the issues, understand the opposing side’s point of view, or simply have an opportunity to be heard, it will be successful for the parties in the long run.

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Mia Levi (mlevi@cpradr.org) is the Vice President of Global Development for Dispute Resolution Services of the International Institute for Conflict Prevention and Resolution (CPR).

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This post is © 2022. Published in GPSolo eReport, Volume 11, Number 9, April 2022, by the American Bar Association. (Available here.) Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

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#CPRAM22 Highlights: Hot Topics/Initiatives in ADR

By Andrew Ling

Lucila Hemmingsen, a partner in the New York office of King & Spalding practicing international commercial and investment arbitration and public international law, moderated a third-day CPR Annual Meeting panel on cutting-edge topics in ADR. The panel focused on arbitration cases pending before the U.S. Supreme Court, new arbitration legislation, an initiative to reduce arbitration’s carbon footprint, and diversity in ADR.

Hemmingsen was joined at the March 4 online #CPRAM22 session by three panelists:

  • Angela Downes, who is assistant director of experiential education and professor of practice law at University of North Texas Dallas College of Law;
  • Benjamin Graham, an associate at Williams & Connolly, in Washington, D.C., who focuses on complex commercial litigation and international arbitration. He has represented sovereign states and multinational corporations in investment-treaty disputes before ICSID and commercial disputes before leading arbitral institutions, and
  • Rachel Gupta, a mediator and arbitrator with her own New York City-based ADR practice, Gupta Dispute Resolutions. She is a mediator for state and federal court ADR panels and is an arbitrator and panelist for CPR, the American Arbitration Association, and FINRA.

Graham and Downes began the discussion by reviewing arbitration cases pending before the U.S. Supreme Court. Downes highlighted Henry Schein Inc. v. Archer and White Sales Inc., No. 19-963, in which the question concerned whether a delegation provision in an arbitration agreement constitutes clear and unmistakable evidence that the parties intend the arbitral tribunal to decide questions of arbitrability.

Traditionally, courts are presumed to decide whether a dispute is subject to arbitration, phrased as the “question of arbitrability.” But in recent Supreme Court decisions, the Court has looked at the parties’ agreement and allowed the arbitral tribunal to decide questions of arbitrability if there is clear and unmistakable evidence indicating parties’ intent to delegate the authority to arbitrators.

Panelist Angela Downes said she views the fundamental Henry Schein issue as the drafting of the arbitration agreement, noting that disputes often arise when the agreement or provision lacks clarity. She pointed out that the case, which was dismissed a month after the oral arguments in January 2021 in a one-line opinion in which the Court said that it had “improvidently granted” review in the case, leave the status of delegation agreement still unsettled enough for potential future litigation.

Rachel Gupta then led the discussion on recent legislation on arbitration, focusing on H.R. 4445, titled Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.

The panel discussed the Congressional backdrop to the bill, which was signed into by President Biden on March 3, the day before the panel discussion. In many employment contracts, employees have been bound by arbitration agreements and prohibited from bringing sexual harassment claims to a court. Arbitration proceedings are generally confidential, and the amount of an arbitral award tends to be lower than the damages rendered by a court. And when parties settle the dispute, employees are usually required to sign non-disclosure agreements. As a result, victims of sexual harassment are often silenced.

There are four amendments to the Federal Arbitration Act. First, it does not categorically ban arbitration agreements between employers and employees, but it allows plaintiffs to bring sexual harassment claims to courts. Second, plaintiffs have the option to bring the case individually or on behalf of a class, even if the employer’s arbitration agreement prohibits class arbitration. Third, FAA applicability will be decided by a federal court, not the arbitral tribunal. Finally, the amendments are retroactive.

Gupta pointed out that the bill does not address non-disclosure agreements. Angela Downes said she believed the omission was intended as a compromise to gain bipartisan support for the bill. In addition, many lawmakers and sexual harassment victims view binding arbitration agreements as the cause of the “broken system,” not the non-disclosure agreements.

The new law, the panel suggested, could drastically change employment arbitration practices. As Rachel Gupta commented, it will be interesting to observe if lawmakers intend to make similar amendments to other areas of arbitration, such as consumer class arbitration.

On reducing arbitration’s carbon footprint, Gupta first discussed the Campaign for Greener Arbitrations, founded by U.K. arbitrator Lucy Greenwood in 2019. The Campaign developed a set of Green Protocols to reduce the environmental impact of international arbitrations, such as using electronic correspondence and organizing virtual conferences.

Moderator Hemmingsen shared several changes in international arbitration practice: sending iPads to arbitrators instead of papers; reducing in-person meetings, and using advanced technology to take construction-site photos instead of traveling. She also predicted that more conferences and hearings would be held virtually.

The panel concluded by discussing diversity and inclusion among arbitrators and mediators. There have been several initiatives on appointing diverse neutrals and offering training and networking opportunities, such as the Ray Corollary Initiative, the JAMS Diversity Fellowship Program, New York Diversity and Inclusion Neutral Directory, the ADR Inclusion Network, and the Equal Representation in Arbitration pledge. Many arbitral institutions have taken action to place more women in arbitration panels. And CPR incorporated a “Young Lawyer” Rule in its Administered, Non-Administered and International Arbitration Rules to increase opportunities for junior lawyers to take a more active role in arbitration hearings (see Rule 12.5 in the rules available at https://www.cpradr.org/resource-center/rules/arbitration).

The panelists agreed that promoting diversity among arbitrators and mediators must be a concerted effort from ADR providers, arbitrators, law firms, and clients. Progress in diversity and inclusion is needed to grow the profession and benefit the next generation of ADR practitioners.

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The author, a third-year law student at the University of Texas School of Law, in Austin, Texas, is a CPR 2022 Spring Intern.

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#CPRAM22 Highlights: Ethics in the Evolving World of Remote, Hybrid, and In-Person ADR

By Tamia Sutherland

During its March 2-4, 2022, Annual Meeting, CPR–a New York-based conflict resolution think tank, ADR provider, and publisher of this CPR Speaks blog–presented a virtual panel on alternative dispute resolution ethics. The panel discussed ethical guideposts for lawyers, mediators, and arbitrators; challenges and solutions in the new post-pandemic business environment; the rise of the hybrid procedures online and in person; and takeaways for meeting the continuing challenges.

Steven Bierman, a former partner and co-head of litigation at Sidley Austin and founder of Bierman ADR LLC, based in New Canaan, Conn., moderated the panel that included: 

The presentation began with an overview of the main sources of ethical standards, which include the American Bar Association Model Rules of Professional Conduct, the ABA/American Arbitration Association/Association for Conflict Resolution Model Standards of Conduct for Mediators, and ABA/AAA Code of Ethics for Arbitrators in Commercial Dispute.

Under the ABA Rules of Professional Conduct, panelist Waldman introduced Model Rules 1.1, and 1.6(a), (c) for consideration. MRPC 1.1–Competence states, “[a] lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation.”

More specifically, she focused on Comment Eight, maintaining competence, which explains what is necessary to maintain the requisite competence: “. . . a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.  …”

With the rise of virtual proceedings and the rise of cybersecurity issues and data breaches, Comment 8 is more relevant now than ever before. Moreover, it interacts with another pivotal ethical rule, MRPC 1.6(a), which covers confidentiality: “[a] lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b) [which lists exceptions for disclosures such as ‘to prevent reasonably certain death or substantial bodily harm’].”

This can pose an issue in a virtual environment where accidental screen sharing, screenshots, and unauthorized recordings have become commonplace—especially in light of MRPC 1.6(c), which  reads, “[a] lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”

Under the Model Standards of Conduct for Mediators, panelist Waldman highlighted Standards IV, V, and VI. Standard IV–Competence, states that “[a] mediator shall mediate only when the mediator has the necessary competence to satisfy the reasonable expectations of the parties … [and] should attend educational programs and related activities to maintain and enhance the mediator’s knowledge and skills related to mediation.”

Standard V–Confidentiality states that “[a] mediator shall maintain the confidentiality of all information obtained by the mediator in mediation, unless otherwise agreed to by the parties or required by applicable law.”

Standard VI–Quality of the Process explains that “[a] mediator shall conduct a mediation in accordance with these Standards and in a manner that promotes diligence, timeliness, safety, presence of the appropriate participants, party participation, procedural fairness, party competency and mutual respect among all participants.”

Under the Code of Ethics for Arbitrators, key rules include Canon IV, titled “An arbitrator should conduct the proceedings fairly and diligently,” and Canon VI, titled “An arbitrator should be faithful to the relationship of trust and confidentiality inherent in that office.”

Additionally, Howard University School of Law Prof. Homer La Rue, founder of the Ray Corollary Initiative (a plan for increasing diversity among the ranks of ADR neutrals), and a CPR Board Member, shared the National Academy of Arbitrators Formal Advisory Opinion No. 26 on video hearings, issued on April 1, 2020, in the chat. The advisory opinion states that “in order to provide an ‘adequate hearing’ by way of video, the arbitrator must be familiar with the platform offered to the parties, and must be confident that the parties have such familiarity as well, or have reasonable access to an effective alternative platform. …”

Before identifying three common themes in the different sources of ethical standards, CPR introduced its model rule amplification proposition that requires third-party neutrals to act diligently, efficiently, and promptly, decline to serve in matters in which the lawyer is not competent to serve, maintain the confidentiality of all information acquired, use reasonable efforts to conduct the process with fairness to all parties, and be especially diligent that unrepresented parties have adequate opportunity to be heard. This referenced both the 2021 CPR Annotated Model Procedural Order for Remote Video Arbitration Proceedings, and the 2002 CPR-Georgetown Commission on Ethics and Standards In ADR Model Rule for the Lawyer as Third-Party Neutral.

The three common rules’ themes discussed were competence, confidentiality, and fairness/quality. The panelists discussed the practical application of each of the themes in practice. They emphasized the importance of using pre-hearing meetings to ensure that the technology does not get in the way of the process, and does not to begin operation until all parties have an even playing field considering the socioeconomic digital divide, as well as the need to consider the effects of zoom fatigue on the parties present.

Videos from #CPRAM22 will be posted; watch www.cpradr.org for updates.

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The author, a second-year law student at the Howard University School of Law, in Washington, D.C., is a CPR 2021-22 intern.

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CPR Protocol on Disclosure of Documents & Presentation of Witnesses in Commercial Arbitration

By Verlyn Francis

One of the advantages of arbitration over litigation is efficiency. Arbitration does not have to contend with the numerous rules of civil procedure. This saves time and, therefore, cost. However, parties to arbitration still expect and do receive procedural fairness in the adjudication of their disputes.  

The concept of efficiency combined with procedural fairness is sometimes challenging for arbitration counsel from different jurisdictions who argue that, without all the court system’s procedural steps, parties do not receive fairness.

Trained commercial arbitrators would argue they are misconstruing the whole arbitration process.  One of the fundamentals of arbitration is that, at the first pre-hearing conference, the parties have input into the procedural rules that will govern the process before those rules are set out in the first preliminary order.

Unfortunately, document disclosure and witness presentation are two areas that can bedevil the tribunal, arbitration counsel and the parties.

The newly published Protocol on Disclosure of Documents & Presentation of Witnesses in Commercial Arbitration, by CPR, the International Institute for Conflict Prevention and Resolution, will go a long way to providing guidance to tribunals and tribunal counsel on the disclosure of documents and witness presentation in commercial arbitration.  This insightful Protocol, a revision of the first Protocol issued in 2009, is the work product of a CPR Arbitration Committee task force co-chaired by Baker McKenzie of counsel Lawrence W. Newman, in New York, and Viren Mascarenhas, a King & Spalding partner who works in the firm’s New York and London offices.

The Protocol’s stated aims are: (1) to give parties to arbitration agreements the opportunity to adopt certain modes of dealing with the disclosure of documents and the presentation of witnesses; and where they have not done so, (2) to assist CPR or other tribunals in carrying out their responsibilities regarding the conduct of arbitral proceedings. 

The Protocol does not supersede the institutional rules or ad hoc arbitrations.  Instead, it helps tribunals to refer to the Protocol in organizing and managing arbitrations under rules such as those for CPR (for example, CPR’s arbitration rules are available here), other institutions, or ad hoc arbitrations.

In dealing with the disclosure of documents, the Protocol considers the philosophy underlying document disclosure; attorney-client privilege and attorney work-product protection; party-agreed disclosure; disclosure of electronic information, and tribunal orders for the disclosure of documents and information. It provides schedules of the wording that can be adopted by parties in their agreements and tribunals in their orders.

In the section on the presentation of witnesses, the Protocol reminds arbitrators to bring to the attention of the parties at the pre-hearing conference the options for adducing evidence and encourage the exploration of those options with the parties.

The first option is that the parties can agree that the tribunal will decide the arbitration on documents only.  It then sets out guidance on how evidence can be submitted by witness statements, oral testimony, depositions, and presentations by party-appointed experts.  Also included are procedures that may be applied to the conduct of the hearing. 

This does not negate party-agreed procedures for the presentation of witnesses but, of course, the tribunal must be careful not to allow the parties to encumber the arbitration with all the court rules.  The Protocol also includes schedules setting out the modes of presenting witnesses, including experts.

This Protocol contains guidance that most commercial arbitrators know, but it is another important tool that tribunals can use to educate counsel and the parties while bringing efficiency into arbitration procedures. 

I have added it to my toolkit!

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The author, a mediator and arbitrator who heads Toronto-based Isiko, an ADR consulting firm, conducts adjudicative processes in estates, family, civil, and commercial disputes. She is a Professor of ADR at Centennial College, Toronto, Canada, and a member of the CPR Panel of Distinguished Neutrals.

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CPR Releases Update to Employment-Related Mass Claims Protocol

The International Institute for Conflict Prevention and Resolution (CPR), working with a diverse task force of leaders in employment law and alternative dispute resolution (ADR), has launched an updated version of its Employment-Related Mass Claims Protocol (the “Protocol”). The Task Force included leading counsel from the plaintiff’s bar, in-house employment counsel, corporate defense attorneys and neutrals (arbitrators and mediators).

The original Protocol was launched in November 2019.  It was reviewed by U.S. District Court Judge Edward M. Chen, of the U.S. District Court for the Northern District of California, in November 2020, in McGrath v. DoorDash, Inc., No. 19-cv-05279 (N.D. Cal. Nov. 5, 2020), who found that “the terms of the Mass-Claims Protocol appear fair.”  Working together over the past 10 months, the Task Force sought to make improvements and further enhance the Protocol. 

An initial set of revisions by the Task Force was released in April 2021, and incorporated CPR’s then newly-launched Administered Employment Arbitration Rules as well as other clarifying changes. See CPR Speaks, April 14, 2021.  Since then, the Task Force has continued to work together to develop the current version of the Protocol, which includes a novel approach to selecting neutrals that will enhance both efficiency and diversity.  The updated version also provides greater detail in describing the mediation process and other procedures.

The procedure outlined in the Protocol applies where it has been incorporated into an agreement between the parties, either before or after a dispute arises, and where there are 30 or more similar cases filed with CPR against one company.

The procedure requires fast track arbitration of randomly selected test cases while proceedings in the other cases are paused. The awards from those cases are anonymized and provided to a mediator to work with the parties and their counsel in trying to identify a global framework for resolving the remaining cases.  If the mediation is successful, each person who brought an arbitration will be presented with an opportunity to settle their case according to the global framework or to proceed with their arbitration. If the mediation fails to identify a global framework, then any of the parties may opt out of the arbitration process and go to court.

Distinguishing features of the Protocol include:

  • Requiring within the Protocol itself that certain due process protections be afforded to employees or others who file cases.
  • A novel fee structure that does not require the company to pay all filing fees up front but instead collects an upfront initiation fee followed by fees paid as each case is addressed.
  • Consistent with CPR’s Diversity Commitment, nominating a diverse pool of arbitrators from which the parties will choose the arbitrators who ultimately will resolve their cases.
  • Innovative mechanisms to encourage all parties to reach a faster resolution of their cases, providing parties with the opportunity and incentives to reach a global framework for resolving all of their cases before proceeding with more arbitrations.

In keeping with its commitment to the parties, CPR sets forth the procedures in detail so that the parties may understand what is expected of them and are provided a practical pathway toward resolution. CPR is also willing to work with the parties on agreed-upon variations to these procedures.

“It has been a privilege to work with and be guided by the experiences and perspectives of this Task Force,” noted Allen Waxman, President & CEO of CPR, adding, “With the benefit of the members’ input, the Protocol offers an innovative procedure for employers and their employees or contractors to resolve their disputes when many arise at once – providing the parties with more options toward finding a resolution.”

Jahan Sagafi, partner of Outten & Golden, Task Force Co-Chair, and a lawyer who frequently represents workers in employment disputes, stated that “while I am very concerned about Supreme Court precedent allowing employers to force workers to submit to individual arbitration, given those realities, CPR’s Protocol provides a fair process to resolve those claims efficiently.  CPR should be commended for considering a variety of perspectives from the Task Force in completing the Protocol.”

“CPR’s Protocol represents a valuable contribution toward the resolution of many similar employment claims,” commented Task Force Co-Chair Aaron Warshaw, a partner in Ogletree, Deakins, Nash, Smoak & Stewart, a law firm that represents management and companies in labor disputes, “The Protocol is an important option for companies putting in place arbitration programs and one that should be seriously considered.”

“CPR has consistently been a leader in offering innovative ways to resolve disputes,” observed the Honorable Timothy K. Lewis, Task Force member, arbitrator and a retired judge on the U.S. District Court and Third U.S. Circuit Court of Appeals, adding, “The Protocol is another such offering for the complex challenges posed by the filing of a mass of cases. Its procedures reflect careful considerations to foster resolution in a fair and efficient fashion. In addition, the Protocol’s commitment to greater diversity in the pool of candidates who will be selected to arbitrate cases is also a meaningful step in addressing the lack of diversity and inclusion in the field of ADR.”

For more information, see the File a Case or Employment Disputes sections of CPR’s website, or contact Helena Tavares Erickson at herickson@cpradr.org.  Also review Frequently Asked Questions for the Protocol.

ABOUT CPR

Established in 1977, CPR is an independent nonprofit organization that promotes the prevention and resolution of conflict to better enable purpose.

The CPR Institute drives a global prevention and dispute resolution culture through the thought leadership of its diverse member companies, leading mediators and arbitrators, law firms, individual practitioners, and academics. It convenes committees to share best practices and develop innovative tools. It connects thought leaders through global, regional, and smaller events. It publishes a monthly journal on related topics and advocates for expanding the capacity for dispute prevention and resolution globally through a variety of initiatives.

CPR Dispute Resolution provides leading edge dispute management services – mediation, arbitration, early neutral evaluation, dispute review boards and others – as well as training and education. It is uniquely positioned to resolve disputes by leveraging the resources generated by the leaders who participate in the CPR Institute.  It has deep experience in dispute management, a deep bench on its global Panel of Distinguished Neutrals, and deep expertise across a variety of subject areas.

Visit cpradr.org to learn more.

[END]

CPR Employment Disputes Committee: Ombud’s Role in Addressing Worker Complaints Is Analyzed

By Daneisha LaTorre

Last month, CPR’s Employment Disputes Committee presented a Zoom discussion highlighting ombuds programs. The panel focused on how ombuds are set up, the services they provide, and their roles within organizations.

Natalie C. Chan, an associate in Sidley Austin’s Chicago office, moderated the June 16 discussion between Joan C. Waters, the University Ombuds Officer at Columbia University in New York, and Timothy Shore, former ombuds at Pfizer Inc.

The event began with a short presentation introduced by the CPR committee chair, Aaron Warshaw, a shareholder in the New York office of Ogletree, Deakins, Nash, Smoak & Stewart, on CPR’s recently released Administered Employment Arbitration Rules, which are available here.

A rules discussion was led by veteran committee members Alfred G. Feliu, a neutral based in New Rochelle, N.Y.; Christopher C. Murray, a shareholder in the Indianapolis office of Ogletree, Deakins, Nash, Smoak & Stewart’s Indianapolis office, and Wayne N. Outten, chair and founding partner of New York’s Outten & Golden. It highlighted Rule 1.4 (Due Process Protections) and Rules 3.12-3.13 (Joinder and Consolidation).

The due process rule is in place to provide fairness, and link to the separate Due Process Protections established by CPR, which can be found at https://bit.ly/3hELLQa.  

CPR also created an innovative procedure through the joinder and consolidation rule, which uses an Administrative Arbitrator to address those issues.

The rules were developed by counsel from the plaintiff’s bar, in-house employment counsel, corporate defense attorneys, and neutrals to ensure fairness throughout the rules. For example, the rules provide detailed guidance to address cases where a party has refused to pay required fees, including guidance on preserving the rights of the defaulting party. The rules also provide factors to consider for discovery, early disposition and remote hearings.

The discussion noted that the rules are specifically designed to avoid ambiguity and interpretative disputes.

The discussion also emphasized the importance of the arbitration rules on addressing imbalances between employees and employers. A CPR Speaks post devoted to the rules can be found here.

* * *

After the arbitration rules presentation, Natalie Chan opened the discussion about ombuds programs, their function, and their benefits . Panelists Joan Waters and Tim Shore provided insight into their experience as ombuds from an academic and corporate perspective.

An ombuds is an official appointed to hear individual concerns regarding issues that may arise in the workplace—Shore emphasized the session’s focus on “organizational ombuds,” as opposed to, say, consumer advocate ombuds jobs. In comparison to human resources professionals, ombuds have an obligation to keep the employee information provided confidential. This method creates a safe space and helps to surface workplace conflict or concerns.

As an ombuds in academia, Joan Waters explained that her role at Columbia University is to serve faculty, students, staff, and any affiliates connected to the institution, including parents and alumni, to hear concerns, act as a referral source and help with conflict negotiation.

Waters explained confidentiality is the most significant contributor to her work. As an ombuds, Waters is not authorized to accept notice on behalf of the university or to keep records of any interaction with the individuals who seek guidance. Specifically, individual’s identities are not disclosed unless there is an imminent risk of serious harm. Waters explained that if an ombuds is presented with information that seems to cause an imminent risk of harming an employee, she can use her discretion to disclose the information.

Tim Shore provided perspective on the responsibilities and role of a corporate ombuds. In his former longtime role at Pfizer—where he was the company’s first ombuds–Shore had the responsibility to oversee the operations of the Ombuds Office.  In this capacity, Shore reported administratively to the chief compliance officer but had direct access to the company’s chief executive officer and board of directors.

Shore explained that an ombuds provides employees with a place that they can raise issues confidentially.

Ombuds help individuals get to the roots of their issues.  If appropriate, the ombuds can also help workers understand the formal steps to be taken if the employee decides that he or she wants to formally report the issue to the company. The process allows employees to control their conflicts and decide if and how that want to take steps to resolve the matter.

To help attendees better understand ombuds programs, moderator Natalie Chan proposed a hypothetical from an employee’s perspective, stating on behalf of a complainant, “I just feel like I’m not being treated properly. My manager doesn’t seem to take my suggestions seriously . . . and I don’t like his tone.  . . . I feel like my male counterpart in the same department is getting preferential treatment and better opportunities.”

Joan Waters explained that the hypothetical is typical of what she often hears from employees. As an ombuds, the mission includes helping employees refine their concerns and understand the process of resolving their dispute. Shore explained that often, people will label their issues, such as, “I’m being bullied” or “I’m being discriminated against,” instead of explaining in detail the core issues at hand.

The ombuds’ goal, said Shore, is to identify the specific issues an employee is facing and help provide the employee with the tools he or she needs to resolve those issues.   During these conversations, ombuds may walk employees through constructive meetings with their managers about their issues or discussing the formal internal process if an employee wants to escalate the situation.  

The question of whether ombuds must report potential discrimination claims that come to their attention was raised. The panelists explained that an ombuds is precluded from reporting unless there is an imminent risk of serious harm.

As ombuds, however, their mission is never to let an employee walk out of the office without a plan to resolve the situation, especially when dealing with a discrimination or harassment issue.

Waters stated that her goal when individuals discuss their situations is to help them specifically identify the problem. She believed once employees understood their options, the individuals would be better equipped to move forward with their concerns if they choose.  

Shore stated that his former organization does not track the specific identity of individuals.  But, he reported, it does track demographic information such as race or gender of the individuals that came to the ombuds office.  This allows the ombuds office to identify trends across the organization.  When the data reveals a pattern in a location or department, an ombuds can bring that issue to the attention of the appropriate leadership without revealing the identity of any of the individuals involved.

Shore also stated that the employee’s perceptions should not be ignored. He said that perceptions are real, and if there are numbers of employees with the same perception, the problems the perception reveal must be addressed.

Shore added that formal employment claims have declined at the company since the launch of Pfizer’s ombuds program. Additionally, he emphasized the cost of an ombuds resolving an employee dispute is a fraction of the time and money spent resolving more formal claims.   

Shore said that, despite their effectiveness, ombuds programs are not common in corporations, with less than 10% of U.S. companies having a program.  

Finally, panelists highlighted training programs for individuals interested in becoming ombuds. Both panelists suggested training from the International Ombudsman Association. Waters also suggested Columbia University’s masters’ program in Negotiation and Conflict Resolution.

To learn more about ombuds, Tim Shore has a video on the CPR Speaks blog. Additionally, for training opportunities, you can access the Columbia Ombuds Office masters’ program here and IOA training here.

The June 16 CPR Employment Disputes Committee video on the panel discussion can be viewed by individuals at CPR members after logging into CPR’s website here.

* * *

The author, entering her second year at Washington, D.C.’s Howard University School of Law, was a CPR 2021 Summer Intern.

[END]

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]