Unit 6

Impasses and Their Resolution

Norma RaeFilm Reaction

1. What are some of the health & safety issues you see in the movie while the workers are on the factory floor?Poor ear protection, lack of access to medical attention, no place to sit & rest, horseplay during work, no visible ventilation or breathing protection.

2. Why did Norma Rae get promoted to spot checker?To separate her from her co-workers and to make them hate her. She was essentially an arm of management, recording their flaws. To also shut her up.

3. What are some of the expectations that the owners have with regard to the workers? (i.e., work faster, etc.)They time the workers & their productivity, expect them to take very few breaks, to be satisfied with their pay & benefits.

Norma RaeFilm Reaction

4. How did Norma Rae promote the Textile Workers Union to her co-workers?Passing out leaflets, holding meetings, speaking out during the workday.

5. Describe some of the tactics the owners used to keep the union out of their factoryTook down notices or hung them too high to be read. Fired union supporters, what else?

6. Why did the workers believe that if they joined the union they’d lose their job?

7. Describe the relationship between Norma Rae and the Textile Union of America promoter.

Impasses and Their Resolutions:

A bargaining impasse occurs when the parties (labor union and management) are unable to reach an agreement. It may result from non-overlapping settlement ranges – the least the union is willing to accept is more than the most the employer is willing to offer, or may occur when one or both parties are unable or unwilling to communicate enough information about possible settlements for an agreement to be reached.

Under the Taft-Hartley Act, if the parties are at an impasse and the contract has expired, in most circumstances the union is free to strike and the employer is free to lock out the employees.

Impasses and Their Resolutions:

The process is more complicated under the Railway Labor Act. There, one or both of the parties must petition the National Mediation Board (NMB) to declare an impasse. At that point, if the parties refuse voluntary arbitration, and if the NMB declares an impasse, they enter into a 30-day cooling-off period, during which they can continue to negotiate.

At the end of the 30 days, the NMB decides whether to permit strikes or lockouts or allow the employer to unilaterally impose a contract.

FMCS – Federal Mediation and Conciliation Service:

Alternative Dispute Resolution:

Negotiated Settlements:

Businesses tend to lean toward settling because:

1. It is not good for business to engage in disputes with consumers and

2. Juries are more often sympathetic to individuals, not companies.

Negotiated settlements typically take two forms:

Alternative Dispute Resolution:

Negotiated Settlements:a. Position-based Negotiations: each side states

what they want from the other and they typically negotiate to someplace in the middle. Because parties become “anchored” to expectations – this method sometimes doesn’t work.

b. Interest-based Negotiations: this requires the parties to explore other factors related to their dispute. Consists of seven elements:

i. Communication: engaging in clear communication about the dispute.

ii. Relationship: they may benefit from continuing their relationship.

Alternative Dispute Resolution:

Negotiated Settlements:iii. Interests: what is their real interest from a

business perspective – is it broader than just the parties’ dispute?

iv. Options: brainstorm about possible resolutions that can help both sides.

v. Legitimacy: focus on reality and what can and cannot be accomplished as part of a negotiated settlement.

vi. Alternatives: what are some of the external possibilities that may occur if the parties continue to litigate.

vii. Commitment: parties make realistic commitments that hopefully will not lead to future litigation.

Alternative Dispute Resolution:

Mediation:The process by which a 3rd party attempts to assist the parties in reaching a resolution. The mediator cannot impose a result on the parties – merely acts a facilitator and often used the principles of interest-based negotiation to help the parties settle their differences.

Mediation can be at the request of the parties or can be mandated by a judge. The judge cannot require that the mediation be successful – just that the parties engage in the process.

Alternative Dispute Resolution:

Mediation: advantages1. Parties retain control

over the process.2. Can be efficient since

there is no presentation of evidence.

3. Process can be stopped and/or started at any time.

4. Usually less expensive than litigation.

5. Can be used for partial or full resolution of issues.

Mediation: disadvantages1. No enforcement

mechanism that the parties mediate in good faith.

2. Parties sometimes have difficulty agreeing on the selection of a mediator.

3. Success depends largely on ability of mediator.

4. Parties make up their own rules.

5. Can waste time if not successful.

Alternative Dispute Resolution:

V.

Alternative Dispute Resolution:

Mediation: usual steps:• Mediator’s introduction and explanation of

mediation;• Parties’ opening statements;• Parties’ exchange of information or

dialogue;• Private caucus sessions;• Brainstorming for possible solutions;• Agreement.

Mediation

Mediation is not a new form of ADR. In fact, mediation has been used for centuries in some informal ways. It has been used in the commercial arena to help maintain good ongoing business relationships. Some religious groups and traditional Native American societies have also used mediation -style interventions to resolve disputes among members – usually with elders playing the role of “mediator.”

Mediation

The 1990’s saw a dramatic expansion of mediation into the legal mainstream. It is currently seen in the following areas:

• Labor & Employment relations• State civil litigation• Federal civil litigation• Private and court-connected divorce & custody cases• Special education disputes• Neighborhood disputes• International disputes• Consumer grievances against commercial entities• Campus and other school setting disputes between

students• And recently, even some criminal cases.

Mediation

If the disputants reach an agreement of some sort as a result of the mediation, some mediators provide the parties with a written memorandum of understanding (MOU), or a memorandum of settlement or agreement.

These, by themselves, are generally NOT legally binding but, instead, is “translated” by the parties’ counsel into a contract or a settlement agreement.

Mediation

There are 2 primary types of mediation:

1. Facilitative Mediation: the mediator’s primary function is to promote effective communication & negotiation. Essentially, they help parties utilize the interest-based method of negotiation.

2. Evaluative Mediation: the mediator works to narrow the gap between the demands of each disputant by expressly “evaluating” the merits, strengths, and weaknesses of each disputant’s position and then strategically communicating these evaluations to the respective disputants.

Arbitration

Arbitration:

This is more formal than mediation. The parties submit their dispute to a neutral third-party (or panel) who then makes a decision resolving the dispute.

Arbitration can be binding or non-binding.

Arbitration

Binding: decision of the arbitrator is final.Nonbinding: decision is not final – can proceed to court or other ADR methods.

Arbitration can be voluntarily engaged in by the parties, it can be the result of a prior contract or agreement, by statute, or it can be mandated by a judge.

Interests Arbitration: deals with situations in which the parties have an interest in the terms of the agreement because the contract will specify future rights.

Rights Arbitration: involves interpretation of an existing contract to determine which party is entitled to a certain outcome or to take a certain action.

Arbitation

Typically if parties contract to arbitrate any disputes, the contract provision requiring that they arbitrate will also contain many or all of the other requirements such as; when notice of intent to arbitrate must be served, which specific disputes must be arbitrated, which jurisdictional rules will apply, and how an arbitrator will be selected.

Arbitration

Some business rules for arbitration that have evolved from case law.

1. “A party cannot be required to submit to arbitration any dispute that which he has not agreed so to submit.”

2. “The determination as to whether an agreement creates an obligation to arbitrate is an issue for judicial determination.”

3. “When deciding if parties are required to arbitrate, the court will NOT look at the merits of the case – merely the issue as to whether the case must be arbitrated.”

Arbitration

Who are the arbitrators?

• They generally have some level of expertise in the area that is being arbitrated.

• Sometimes they are retired judges.

• Occasionally they are also practicing attorneys.

• There are also organizations like the American Arbitration Association that have a list of qualified arbitrators.

• Federal Mediation & Conciliation Board

Arbitration

The award of an arbitrator:

Will only be overturned if there is evidence of fraud or other clearly inappropriate action by the arbitrator.

An award is usually submitted to a court so it will be entered and can be enforced.

Arbitration

Generally an arbitrator’s award does NOT need to set forth findings of fact, conclusions of law, or the reasons for the award. This makes them very difficult to appeal since the court rarely has something it can point to as having been unreasonable, abusive, or fraudulent.

The parties can agree to change this so that there is a written decision with a rationale.

Generally court’s give deference to arbitration awards and favor a broad scope in the arbitrator’s powers.

Arbitration & the F.A.A.

Historically, arbitration has been the most widely used of all of the forms of alternative dispute resolution.Federal Arbitration Act (FAA): originally passed in 1925 and amended in 1947 – it covers any arbitration clause in a contract involving interstate commerce.

• We saw from our discussion on the commerce clause that most, if not all, forms of business are subject to federal lawmaking because almost everything is now “interstate”.

FAA provides that arbitration agreements “shall be valid, irrevocable, and enforceable”, except where so provided by law or revocation of the contract.

Arbitration & the F.A.A.

The FAA provides that an arbitration award may be set aside or vacated based on any one of the following 4 grounds:

1. The award was procured by corruption, fraud, or other undue means.

2. The arbitrators were obviously partial or corrupt.

3. The arbitrators were guilty of misconduct in refusing to postpone the hearing, refuse to hear certain evidence that was pertinent or material to the controversy, or any other behavior that deprives one of the parties of their rights.

4. The arbitrators exceeded their powers, or a final decision was not made.

Arbitration

Arbitration: advantages

1. Parties retain control over the process.

2. Usually, but not always, quicker & cheaper than litigation.

3. Confidentiality.4. Can separate out

issues and have them arbitrated independently.

5. Arbitrators usually have more knowledge of the subject matter than judges.

Arbitration: disadvantages

1. Difficult, if not impossible, to get chance for an appeal.

2. Can be disjointed and take time.

3. Rules on admissibility of evidence & testimony are made up by the arbitrator.

4. If nonbinding, then parties could have wasted their time.

5. Can have difficulty in agreeing on an arbitrator.

Arbitration

The Process of Arbitration: arbitration consists of 8 basic steps:

1. Creating the arbitration contract;2. Demanding, choosing, or opting for arbitration;3. Selecting the arbitrator or arbitrator panel;4. Selecting a set of procedural rules;5. Preparing for arbitration;6. Participating in the arbitration hearing;7. Issuing the arbitration award;8. Enforcing the award.

Arbitration --- the contract

Arbitration always begins with a contract to arbitrate. The arbitration contract may be executory – that is, developed prior to the development of a dispute (i.e., part of a contract) – or ad hoc – that is, developed in an effort to resolve an existing dispute.

As with any other contract, the arbitration contract should be designed to minimize the likelihood of gratuitous dispute escalation. For this reason, it should be as clear and simple as possible, should anticipate future developments, and should be appropriately fair & equitable.

Arbitration

• The matters to be arbitrated should be set out explicitly – this avoids ambiguity.

• The expenses associated with arbitration & how they will be apportioned & paid

• The method of selection of the arbitrator(s)• Whether discovery will be permitted and if

so, to what degree, forms, and time limits• Confidentiality• A clear definition of the arbitrator’s role in

the process.• Evidentiary rules• What types of submissions can be made to

the arbitrator.• The parameters of the arbitrator’s award• Choice of law & reviewability by a court• Will provisional remedies be available

(injunctions, etc)

What are some of the things that should be included in an arbitration provision in a contract?

Arbitration --- preparing for arbitration

Preparing for arbitration: the type and amount of preparation needed will depend largely on the arbitration agreement. Since it is very similar to litigation, the preparation is typically similar, just less formal.

Maximizing one’s expert power; Getting up to speed on the facts & the law; Organizing evidence to be presented; Planning a presentation strategy; Preparing witnesses for their testimony; General administrative tasks

Arbitration --- preparing for arbitration

Many times, arbitration will have a facilitative component, and the disputant and his or her legal team should be prepared to take advantage of such an opportunity to maximize underlying interests, values & needs.

In any event, a careful conflict diagnosis should precede the effort to prepare a case for any sort of adjudication, because it will guide the team in determining how best to present the case in view of the disputant’s overall best interests. Since arbitration is more flexible than litigation in procedure & potential outcomes, it may be possible to do more in arbitration to see that underlying interests are addressed.

Arbitration --- participating in arbitration

Participating in the Arbitration Hearing(s): the character of the hearing obviously depends on the provisions in the agreement to arbitrate. In some expedited forms of arbitration, there may not be an actual hearing; instead, the arbitrator will decide the case based on documentary arguments and evidence. Still others sometimes are limited to oral presentations & submission of evidence by lawyers without testimony from witnesses. Last, in most cases, the attorneys, disputants, and witnesses all participate in the process.

Arbitration --- participating in arbitration

Typically the presentation of evidence is more informal in arbitration that in litigation. The attorneys may present opening & closing statements, and they may conduct direct & cross-examination, as with litigation. The arbitrator may also ask questions, and the disputants may be free to add their own remarks. The arbitrator may also receive various forms of evidence in a less formal manner than in litigation.

An arbitration hearing typically has an adversarial, adjudicatory flavor, but it may also look a little like mediation.

Arbitration --- the arbitration award

Issuing the Arbitration Award: following the hearing(s), the arbitrator(s) issues a decision called an arbitration award. The decision may be issued on the spot, but more likely it is issued after a period of deliberation and could be communicated by mail or email. The Uniform Arbitration Act, which is a model statute adopted by the majority of states, requires that the award be in writing. Sometimes there is also an explanation for the arbitrator's findings.

Arbitration --- enforcing the award

Enforcing the Arbitration Award: if the arbitrator’s award requires action by one of the disputants, and the disputant allegedly fails to comply, it may become necessary to engage in legal action to enforce the arbitrator’s award. A refusal to comply with an arbitrator’s award can be considered a breach of contract (the contract to arbitrate), so an action can be filed with an appropriate court for confirmation of and enforcement of the award.

Most jurisdictions have streamlined the enforcement process to avoid the problems & delays associated with litigation.