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Prevalence of Employment Arbitration is Measured

Fri, 2017-09-29 12:22

Two recently released survey reports measure the pervasive use of arbitration to resolve workplace disputes.

Alexander J.S. Colvin of the Economic Policy Institute in Washington, D.C., has concluded that, “since the early 2000, the share of workers subject to mandatory arbitration has more than doubled and now exceeds 55 percent.”  Key findings of Colvin’s study include:

  • 53.9% of nonunion private-sector employers have mandatory arbitration procedures, and 65.1% of employers with 1,000 or more employees have them.
  • 56.2% of nonunion private-sector employees are subject to mandatory employment arbitration procedures.
  • 30.1% of employers who require arbitration also include class action waivers in their procedures
  • Large employers are more likely than small employers to include class action waivers.

A second study was released by Prof. Imre S. Szalai of Loyola University New Orleans School of Law and published by the Employee Rights Advocacy Institute for Law & Policy.  Prof. Szalai examines the use of arbitration agreements in the workplace by the top 100 largest domestic United States companies.  Key findings include:

  • 80% of the companies in the Fortune 100 have used arbitration agreements in connection with workplace disputes since 2010, and
  • Of the 80 companies with arbitration agreements in the workplace, 39 have used arbitration clauses with class action waivers.

Both studies conclude that these trends are adverse to employees.  The Colvin study states that “mandatory arbitration is a growing threat to workers’ rights,” and the Szalai report states, among other things, that “[t]he widespread use of forced arbitration threatens to undermine public confidence and trust in the American justice system.”

These studies’ empirical data are compelling and a necessary and valuable contribution to any fact-based policy discussion.  Their conclusions seem less reliable.  Both researchers seem to assume that arbitration lacks due-process guarantees of procedural fairness; that arbitration is not as accessible as public courts; and that our institutions of public justice are capable of absorbing all off the employment claims now being handled in arbitration.  They also assume without support that employees’ interests are better served in court than in confidential arbitration (assuming that procedural fairness is observed and that employment arbitration is faster and less expensive than employment litigation).  These issues are among those that need to be empirically studied before policy conclusions can be reached with the confidence and clarity that these reports reflect.

Market Disruption, Anyone?

Wed, 2017-09-27 19:36

You can read all kinds of Richard Susskind books about disruption in the legal markets, but sometimes, like St. Thomas, you gotta see it to believe it.

Recently I attended a Mediation Summit in Hangzhou, China, and with some other American colleagues I was given a tour of the West Lake District Court in Hangzhou, China.  The lobby had arrows pointing ahead for “lawyer service,” to the left for “court,” and to the right for “mediation and rapid arbitration.”

A battery of computer terminals was available, at which a member of the community could select among “directory information,” “file a case,” or “consultation,” among others.

If you picked “consultation” you were prompted to input what your problem was (e.g., “neighbor’s dog barking too much”), what you wanted the court to do, where you lived, and so on.  The computer would then tell you what provision of the civil code was implicated by your problem, what the code provided in simple terms (full code language can be printed out), how much it costs to file a complaint (usually between 10 and 50 RMB, or $1.50 – $8.00), and how many people who lodge such complaints prevail (e.g., “3,476 complaints under this code provisions were filed with our court in the past 5 years, and only 26% resulted in a judgment for the claimant, while 74% did not”).

The user is then prompted again to the home page, where she could decide whether to file the case, to ask for in-person consultation, or to ask the court to set up a mediation.  Or to go home.

Speaking of home, you can of course do this whole thing from your bed using the internet.

Access to justice?  You bet.  Robust, useful and accurate information on your claim?  Absolutely and at no charge.  Options for methods of problem-solving?  Multi-door courthouse?  Empowering the citizen to manage her own issues?  Check check and check.

Where are the lawyers in this process?  Market disruption, anybody?

ADR Legislative Update

Wed, 2017-08-30 19:25

As is his practice, Larson Frisby of the ABA Governmental Affairs Office has prepared his annual Federal Legislative Update, reporting on the status of federal ADR legislation and other related proposals and measures of interest to practitioners and public policy followers.

Most prominent on the list is the CFPB’s final rule regulating the use of financial consumer pre-dispute arbitration agreements and requiring reporting of data  concerning arbitrations that are held pursuant to such agreements.  The House has approved, and the Senate has introduced, resolutions to prevent the rule’s taking effect.  Other challenges from congressional and industry groups are also underway.  The SEC has taken no action with respect to securities arbitration, though it was authorized to do so in the Dodd-Frank Act.

The Department of Health and Human Service’s Centers for Medicare and Medicaid Services has published a proposed rule revising its previously published final rule, the effect of the modification being to remove the prior rule’s ban on pre-dispute arbitration agreements in nursing home contracts.

Other developments include the reversal of rules prohibiting federal contractors from requiring arbitration of sexual assault and harassment claims; proposed legislation to make enforcement of arbitration agreements more difficult for service members with respect to employment rights; and the perennial Arbitration Fairness Act, introduced each Congress by Senator Franken, rendering unenforceable all pre-dispute arbitration agreements.

The always valuable report by the always valuable Mr. Frisby may be found here.

Employee Class Action Waiver Independent of Arbitration Clause

Tue, 2017-08-29 09:57

The law of employee class action waiver has, to date, been entwined in the law of arbitration.  Agreements to arbitrate being heavily favored, courts have been reluctant to refuse to enforce agreements to arbitrate that also included agreements not to engage on collective remedies such as class actions.  Now, the Fifth Circuit has enforced a contractual employee class action waiver that appeared as an independent provision of the terms and conditions of employment.

The case is Convergys v. NLRB.  There, the employer required job applicants to agree to the following:

I further agree that I will pursue any claim or lawsuit relating to
my employment with Convergys (or any of its subsidiaries or
related entities) as an individual, and will not lead, join, or serve
as a member of a class or group of persons bringing such a claim
or lawsuit.

An employee brought a claim in federal district court alleging class-wide violations of the Fair Labor Standards Act, and also filed charges with the NLRB claiming that the policy requiring class action waiver violated Section 7 of the National Labor Relations Act (which protects an employee’s right “to engage in other concerted activities for the purpose of … mutual aid or protection”).  The company successfully dismissed the class action, and settled the claim on terms that included the claimant’s seeking withdrawal of the NLRB charge.  The NLRB, however, issued a complaint and accepted the ALJ’s recommended finding that the policy violated Section 7 rights of collective action.

On appeal the Fifth Circuit followed its own precedent by deeming class actions to be a procedural option , rather than substantive right.  Moreover, it concluded that it previous rationale was based on an analysis of NLRA Section 7, not on the Federal Arbitration Act, and thus had continuing applicability regardless of whether the class action waiver was part of an arbitration agreement or freestanding.  Because Section 7 does not protect the right to participate in class action litigation, a waiver of that right does not constitute a violation of Section 7.

One wonders, rhetorically, given the conclusion that Section 7 does not contemplate workers’ acting collectively and concertedly to vindicate statutory rights under the FLSA, exactly what non-union concerted worker activity Section 7 does protect.  The employer’s mandatory waiver is pretty broad and clear, and expressly bans only one thing: collective and concerted activity in challenging terms of employment.  The court’s conclusion seems to be a pretty enticing invitation.

Interesting China Conference

Tue, 2017-07-18 13:06

Colleagues at both the CCPIT Mediation Centers and the newly-minted Mainland-Hong Kong Joint Mediation Center have extended invitations to what promises to be a fascinating conference on 18-19 September in the beautiful city of Hangzhou.

The invitation is a broad one and I encourage those interested to contact the link provided below.

Mainland – Hong Kong Joint Mediation Center (MHJMC) will jointly organise the International Mediation Summit with China Council for the Promotion of International Trade (CCPIT), Hangzhou Municipal Government, CCPIT Mediation Center Hangzhou and the Asian Mediation Association. It will be held in Hangzhou Marriott Hotel, Qianjiang, No.399 Juyuan Road, Jianggan District, Hangzhou City, Zhejiang, China on 18 and 19 September 2017.

The Summit aims at promoting the use of commercial mediation internationally, enhancing global exchanges and cooperation in the field of mediation, endorsing China’s “Belt and Road” Initiative and Chinese reforms in alternative dispute resolution mechanism. Registration for the Summit is free of charge.

The Supreme People’s Court of PRC, China Law Society, All China Lawyers’ Association and the Department of Justice of Hong Kong SAR will be invited to be supporting organizations.

The discussion topics of the Summit will include but not limited to the following:

  • The Current Development of Online Dispute Resolution Mechanism
  • Dispute Settlement Methods Under the ‘Belt and Road’ Initiative and the Comparative Advantage of Commercial Mediation
  • The Current Development of and Future Outlook on the Internet and Dispute Resolution
  • Case Sharing on Cross-Border Commercial Mediation
  • Mediation and National Reforms on Alternative Dispute Resolution Mechanism

You are cordially invited to attend the summit. Hangzhou is an internationalized city with fabulous scenery.  It is expected that more than 350 delegates will be attending the summit, who are mediators from both China and abroad, judges, jurisprudential experts, lawyers and company representatives.

For interested parties, please submit the completed registration form as attached.  For more details or registration, please kindly contact Ms Irene Lam at 852 3620 3076 or email to [email protected]

Thanks for your kind attention.

Best Regards,

The Secretariat of Mainland-Hong Kong Joint Mediation Center

Tel: 852 2866 1800

Fax: 852 2866 1299



More Leadership, Just in Time

Wed, 2017-07-12 18:19

From the New York Times, Wednesday July 12, 2017, quoting a spokesperson for the American Secretary of State who made the following distinction with respect to the Secretary’s efforts concerning Qatar:

Mr. Hammond said that Mr. Tillerson was maintaining his distance and not trying to act as a mediator.  “No, a mediator says this is what the final resolution is going to be, we’ll decide it for you, that’s a mediation,” Mr. Hammond said….

ABA DR Section Solicits Proposals for 2018 Spring Meeting

Thu, 2017-07-06 13:11

The ADR event of every year is the Spring Meeting of the ABA Dispute Resolution Section Spring Meeting.  The Section has announced that proposals for programming for the April 4-7, 2018 Meeting are now being solicited.  More surprisingly, the deadline for proposals is only a few weeks away — Friday, August 4!

Information on how to submit a proposal is available here.  Every conceivable track, topic, approach and format seem to be encouraged.  Do put on your thinking caps and, next April thrill us!!

“How Mediation Works”

Sat, 2017-06-24 13:21

A collection of Blaise Pascal’s letters, published in 1657, included a letter that contained the apology, ”Je n’ai fait celle-ci plus longue que parce que je n’ai pas eu le loisir de la faire plus courte.”  That is to say, “I wrote a longer letter than usual because I did not have time to make it shorter.”  The recently published book, tersely titled How Mediation Works, must have taken the authors quite a bit of time.

The bulk of the non-bulky (111-page) volume is written by three seminal leaders of the ADR movement:  Stephen B. Goldberg, Jeanne M. Brett and Beatrice Blohorn-Brenneur.  A chapter on “Mediation and the Law” is contributed by Professor Nancy Rogers of Ohio State.  The result could be compared to those condensed “…for Dummies” series, except that the precision of thought, clarity of writing and general excellence prompts me to subtitle it “Mediation for Smarties.

Reading the book is like brushing away cobwebs and seeing a room clearly.  The authors start off by distinguishing between “conflicts” – the collision of differing viewpoints – and “disputes” – a subset of conflicts in which one party makes a claim upon another, who rejects it.  Then they divide the process of resolving disputes into three broad categories:  processes relying on power and coercion (like boycotting a segregated restaurant), processes relying on rights (like appealing to an authoritative decision-maker to apply applicable principles and declare which party should prevail), and processes relying on interests (like engaging to reconcile priorities and effect trade-offs, resulting in an imperfect but acceptable outcome).  Then they define mediation as “negotiation with the assistance of a neutral third party.”  That gets us to page 7.

In keeping with their rigorous discipline of thought, the authors walk us through the role of a mediator in convening the parties, explaining the process, developing potential resolutions, and concluding the process.  In a 17-page chapter worth the price of the entire book they opine on common party-related obstacles during mediation, such as the urge for rights-based vindication, prevarication, or exploitation.  And they are admirably frank in the final chapter, titled “So You’d Like to Be a Mediator?”  This is, I’m pretty sure, the only mediation book I’ve read that includes in the index the entry “Day job, don’t quit, 104.”

The book is steadfastly mainstream.  The authors accept without challenge that a mediator should be “neutral,” for example – a proposition that a great number of sophisticated parties, including Asian disputants and many Western companies, would contest in a number of contexts.  It’s a little weak on recent scholarship and resources; the list of recommended mediation demonstration DVDs, for example, is pretty dated, and the suggested reading on impasse-breaking consists of only two items, the most recent six years old.  At the same time, aspects are quite contemporary; readers are provided a compilation of ADR blogs that includes this one – evidence of the authors’ profound discernment, if ever I saw it.  And the book is available in digital as well as hardcopy format.

Buy several copies of the book.  Share it, and give copies as presents to clients, counsel and your mediator buddies.  It really is that brief and it really is that good.

New York City Reception for New Book “Transforming Justice”

Tue, 2017-06-20 10:30

Prof. Marjorie Silver of Touro Law Center writes to say:

We are pleased to announce the publication of Professor Marjorie Silver’s new book:
Transforming Justice, Lawyers, and the Practice of Law
(Marjorie A. Silver, ed., Carolina Academic Press).

Transforming Justice, Lawyers and the Practice of Law is a collection of writings by participants in the Project for Integrating Spirituality, Law and Politics (PISLAP) and others actively engaged in transforming law, legal education and social justice into something that is collaborative rather than adversarial, that seeks to heal brokenness rather than merely resolve disputes, and that moves us toward The Beloved Community envisioned by the Reverend Martin Luther King, Jr. more than fifty years ago. The collection showcases the abundant ways in which lawyers, judges, law professors and others are employing more communitarian, peaceful and healing ways to resolve conflicts and achieve justice. It is written for those who share similar goals and are eager to learn new ways to practice law and create a legal system that fosters empathy, compassion and constructive change.
See for more information about the book.

If you are in the New York City area, please join Marjorie and several contributing authors at the Brooklyn Commons on June 26th.  See:<>.