In his August 28, 2016 post, Prof. Kenneth Jost suggests, as I did in my August 23, 2016 post about Morris v. Ernst & Young, that the split among the circuits concerning the enforceability of employment contract clauses requiring disputes to be resolved through individual arbitration is likely to be headed to the Supreme Court for resolution --especially after the Ninth Circuit panel neatly framed the split with majority and dissenting opinions in Morris.
But Jost goes one step further, drawing a parallel between the contemporary arbitration clause intended to stop concerted activity by employees and the notorious “yellow-dog contracts” of yesteryear, prohibiting employees from joining unions.
The Maryland Judiciary has commissioned research to be conducted by independent researchers on the efficacy of mediation with small claims-type cases. The research claims to be “the only research in the country that compares the attitudes and changes in attitudes of participants who went through ADR to an equivalent comparison group who went through the standard court process.” The research also examines the long-term and short term effects of employing different mediation strategies, such as reflecting back the emotions and interests of the participants, and eliciting solutions, offering solutions, and caucusing.
The research showed significant benefits for those who went through the ADR process. Participants were more likely to resolve all their issues. They had an increase in their rating of their level of responsibility for the situation. Participants were more likely to be satisfied with the judicial system than others. They were more likely to emerge with a better attitude toward the other side, and with a higher satisfaction with the outcome.
The study also found interesting results regarding the strategies employed by mediators. In the short run, reflective strategies seemed to make participants feel more positive, though such strategies seemed not to have a statistically significant effect in any positive or negative outcomes. Frequent caucusing correlated with lower satisfaction, and with a higher likelihood of return to court. Also, “eliciting strategies” – asking participants to suggest solutions, summarizing the solutions, and asking them how the solutions would work for them – were strategies associated with a lower rate of return to court in the long run. Being directive by offering solutions was a less successful strategy than eliciting solutions.
Query whether reflecting back the emotions of participants, keeping them all in the same room without caucusing, and avoiding evaluation and directive solutions will work with equal success in more complex mediations.
The Subjects Are Appellate Mediation And Mediating Employment Disputes With Small Business Owners.
The July 2016 edition of Orange County Lawyer includes two worthwhile articles about mediation.
Rethinking the Impossible: Appellate Mediation.
By the time a case is on appeal, many attorneys and their clients view a case as far beyond the point of settlement. However, Kerry W. Franich, an attorney in Severson & Werson’s appellate practice group, emphasizes the benefits of appellate mediation. A judgment may provide an opportunity for revisiting settlement negotiations.
The opportunities presented by appellate mediation often flow from the passage of time: decision makers may have changed, parties may have changed, litigation objectives may have changed, and the law may have changed. In short, the door to settlement may not be shut.
COMMENT: Nevertheless, appellate mediation does not have as high a settlement rate as does mediation at the trial court level. Do any of my readers have statistics on settlement rates for appellate mediation?
We would add that a significant motivator for engaging in appellate mediation ought to be the rate of reversal on appeal in California. “With an overall statewide reversal rate of 36% in civil cases, an appeal does not necessarily end the litigation process – it may be only another step in a seemingly endless and costly road to resolution.” Hon. Jeff Kaplan (Ret.), “Practical Considerations for Post-Trial and Appellate Mediations,” Advocate (Fall 2013).
Reaching for Understanding: Mediating Employment Disputes With Small Business Owners.
David Ezra,an attorney with a practice focusing on ADR, insurance and employment law,considers the attributes of small business owners that “can make the mediation process especially challenging.” Mr. Ezra points out that small business owners are accustomed to making decisions with “no opportunity for consensus building or a second opinion.” Additionally, relationships in a small business can be highly personal and emotionally charged. “The mediator,” Mr. Ezra counsels, “needs to resist passing judgment.”
Mr. Ezra offers useful suggestions for dealing with the small business owner in mediation – and perhaps he will follow up someday with suggestions for helping the employee through the mediation process.
San Francisco-Based Mediator And Arbitrator Paul Dubow Has Reported On 18 California And Ninth Circuit Cases Related To ADR.
In the 2015 Edition of the California Litigation Review, published by the Litigation Section of the State Bar of California, Paul Dubow has reported on “interesting and significant opinions relating to ADR particularly in the area of arbitration.” Having blogged for several years now on California mediation and arbitration cases, I note that the courts write far more opinions about arbitration than about mediation, a fact reflected by Mr. Dubow’s excellent report. Here are the 18 cases that Paul Dubow has reported about, with links to my blog posts on 14 of the cases:
1. DirectTV, Inc. v. Imburgia, ___ U.S. ___, 136 S. Ct. 463 (2015) (“law of your state” meant valid law after considering FAA preemption, resulting in enforcement of arbitration provisions.) December 15, 2015 post.
3. Khalatian v. Prime Time Shuttle, Inc., 237 Cal.App.4th 651 (2015) (14-month delay in bringing motion to compel, absent showing of prejudice, did not result in waiver of right to arbitrate). June 9, 2015 post.
5. Franco v. Arakelian Enterprises, Inc., 234 Cal.App.4th 947 (2015) (rulings in Concepcion and Iskanian require reversal and remand to trial court of orders denying employer’s petition for arbitration, while preserving employee’s rights to prosecute PAGA claims in a non-arbitration forum.) February 26, 2015 post.
10. Carlson v. Home Team Pest Defense, 239 Cal.App.4th 619 (2015) (affirming order denying employer’s motion to compel arbitration, on grounds that the arbitration provisions were procedurally and substantively unconscionable.) October 20, 2015 post.
11.Brennan v. Opus Bank, 796 F.3d 1125 (9th Cir. 2015) (incorporation of AAA rules meant there was a clear delegation of authority to arbitrator to decide arbitrability questions).
13. Richey v. Autonation, Inc., 60 Cal.4th 909 (2015) (possibility that defendant violated plaintiff’s statutory rights did not require vacating arbitrator’s award, because defendant legitimately fired plaintiff for violating company policy). January 29, 2015 post.
14. SingerLewak LLP v. Gantman, 241 Cal.App.4th 610 (2015) (accounting firm’s award against departing partner for violating covenant not to compete did not violate public policy where arbitrator found implicit geographical limitation) (ordered published by Supreme Court). October 22, 2015 post.
15. Ramos v. Westlake Services, Inc., 242 Cal.App.4th 674 (2015) (fraud in execution of arbitration agreement where car dealer provided misleading translation of service agreement to Spanish speaker). November 29, 2015 post.
16. Miranda v. Anderson Enterprises, Inc., 241 Cal.App.4th 196 (2015) (“death knell” exception allowing for immediate appeal of order granting motion to compel arbitration, applied to PAGA representative claims).
17. Cobb v. Ironwood Country Club, 233 Cal.App.4th 960 (2015) (retroactive effort by country club to compel arbitration by including arbitration clause in bylaws after suit was filed against it fails). February 1, 2015 post.
18. Amis v. Greenberg Traurig LLP, 235 Cal.App.4th 331 (2015) (malpractice claim fails because attorney’s advice was given in context of mediation and is inadmissible; even inference that settlement agreement was signed based on attorney’s advice was inadmissible). March 19, 2015 post.
“Have We Lost A Constitutional Right In The Fine Print?”
On the November 12, 2015 edition of Fresh Air, Dave Davies interviews New York Times reporter Jessica Silver-Greenberg, co-author of the New York Times Special Report on arbitration. I have blogged about the series, as well as the retort by the U.S. Chamber of Commerce, in November 1, 2 and 5, 2015 posts. Now you can learn the gist of the report by listening to the interview with Jessica Silver-Greenberg.
On November 1 and 2, I reported on the NYT Special Report about arbitration – articles highly critical of the spread of arbitration. While the report is one-sided in its approach, it does serve to highlight the revolution that is quietly occurring in our legal system, as arbitration clauses become increasingly widespread – and enforceable – in employment law, and consumer law.
Predictably, the U.S. Chamber of Commerce has not taken the attack on arbitration lying down. In a spirited defense of arbitration, the U.S. Chamber describes the NYT investigation as “little more than an opinion piece masquerading as fact. . . . incomplete, misleading, and one-sided . . . underscored by the article’s resort to innuendo about the ethics of a Supreme Court Justice . . . “
COMMENT: U.S. Chamber of Commerce v. NYT is only the latest sign that the role to be played by arbitration in the American legal system is now highly politicized. The fault lines are apparent in the liberal/conservative split in SCOTUS arbitration decisions, and the polarization in the statements of labor and consumer versus business interests.
Yesterday I reported that the New York Times has kicked off its special report on arbitration with Part I, an article entitled “Arbitration Everywhere, Stacking the Deck of Justice.” The NYT has now moved on with Part II, “Privatizing Justice,” and Part III, “In Religious Arbitration, Scripture Is The Rule Of Law.”
The article on privatizing justice presents a litany of problems with arbitration. Though the article does not exactly describe what “privatizing justice” means, it circles around certain aspects of arbitration: the loss of judges and juries, the secretive nature of arbitration in a system where cases need not be reported and proceedings are confidential, the common perception that unlike judges, arbitrators are “beholden to companies” that are their real clients, and the inability to effectively appeal bad awards. The authors’ point of view appears to be that if sunlight is the best disinfectant, then arbitration is a black hole.
The article on religious arbitration presents some interesting examples involving Christian arbitration, as well as Scientology arbitration. The article points out that in addition to the usual inability to review arbitration awards for mistakes of law or fact, judges will not review religious arbitration awards for fear of church-state entanglement issues.
The Article Is Critical of Enforcement Of Individual Arbitration In Situations Where Only A Class Action Can Be Economically Prosecuted.
Jessica Silver Greenberg and Robert Gebeloff have authored a special report appearing in the New York Times online edition on October 31 and November 1, 2015, under the title: “Arbitration Everywhere, Stacking the Deck of Justice.”
The article promises to be “the first part in a series examining how clauses buried in tens of millions of contracts have deprived Americans of one of their most fundamental constitutional rights: their day in court.”
The issues discussed in the article will be familiar with readers who have followed arbitration decisions of the Roberts Court. Still, without offering too many spoilers, here are a few interesting tidbits:
“More than a decade in the making, the move to block class actions was engineered by a Wall Street-led coalition of credit card companies and retailers, according to interviews with coalition members and court records.”
Attorney John G. Roberts Jr. – now Chief Justice Roberts - represented Discover Bank when it unsuccessfully petitioned the Supreme Court to hear a case involving class-action bans.
The NYT studied 1,179 federal class actions filed between 2010 and 2014 that companies sought to push into arbitration, and found that judges ruled in their favor in four out of every five cases.
Though there is no central database for arbitration, the NYT concluded that between 2010 and 2014, only 505 consumers went to arbitration over a dispute of $2,500 or less.
Verizon and Times Warner have arbitration clauses in their consumer contracts, and from 2010 to 2014, “Verizon, which has more than 125 million subscribers, faced 65 consumer arbitrations . . . . Time Warner Cable, which has 15 million customers, faced seven.”
“One federal judge remarked in an opinion that ‘only a lunatic or a fanatic sues for $30.’”
Andrew J. Pincus of Mayer Brown, succinctly states one of corporate America’s economic arguments for arbitration: “Arbitration provides a way for people to hold companies accountable without spending a lot of money.”
Last year, “attorneys general in 16 states warned that ‘unlawful business practices’ could flourish with the proliferation of class-action bans.”
Examples of companies that now have arbitration clauses in their consumer contracts include Netflix, at&t, TimeWarner, T Mobile, ebay, Expedia, Budget, Discovery, Starbucks, and Electronic Arts.
An Uncertain Future In California: The Arbitrability Of Statutory Representative Actions Brought For The Benefit Of The Public.
Thanks to the generous permission of California Litigation, The Journal of The Litigation Section, State Bar of California, my article “Can Private Attorney General Actions Be Forced Into Arbitration?” is now available on my website by clicking here. The article appeared in the latest issue of California Litigation, Vol. 28, No. 2, 2015.
Daily Journal Publishes My April 17, 2015 Article On The Perils Of Blogging
Published by The Daily Journal on April 17, 2015, my article on the legal perils of blogging will interest those of you who blog, or who are considering blogging. With the permission of the Daily Journal, I am making it available to my readers. Click here if you wish to read it. Note you may have to rotate the article in your viewer or enlarge the text to make it easier to read.