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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

Website: http://mhjmc.org

 

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 http://www.cap-press.com/books/isbn/9781611635980/Transforming-Justice-Lawyers-and-the-Practice-of-Law 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: https://www.eventbrite.com/e/transforming-justice-lawyers-and-the-practice-of-law-book-launch-tickets-35092493593<https://www.eventbrite.com/e/transforming-justice-lawyers-and-the-practice-of-law-book-launch-tickets-35092493593https:/www.eventbrite.com/e/transforming-justice-lawyers-and-the-practice-of-law-book-launch-tickets-35092493593>.

Michael Leathes’ New Negotiation Book

Fri, 2017-06-09 09:05

Michael Leathes has written a book on negotiation that is aimed at corporate counsel.  In so doing he has given us a clear insight into the challenges of decision making within corporations, and the skills needed for those of us who counsel them.  By virtue of his experience and his commitment to both deal-making and dispute settlement, he has also earned our deep respect and a place on my very thin shelf reserved for books that speak definitively to the core of our work in immediately practical terms.  I will refer to it frequently when I need guidance, skills refreshment, or inspiration.

It’s not just that Leathes’ volume, Negotiation: Things Corporate Counsel Need to Know but Were Not Taught, is worth the read and constitutes another excellent book on negotiation.  It is well-informed, articulate, authoritative, wears its scholarship easily – and it’s just plain useful.

The core virtue of this study lies in the reservoir of real-life experience from which the author draws.  The book notes that “Michael Leathes spent his entire career as a corporate counsel with Gillette, Pfizer, International Distillers & Vinters and BAT based variously in Brussels, New York and London.”  The reader is therefore the beneficiary not only of war stories about real business negotiation, but also the challenges of working with a team; the difficulties in having a corporate (rather than a single individual) client as ultimate decision maker; and the special considerations that arise from negotiating on behalf of an international entity, with counter-parties from every culture imaginable.  It is a heady mix, and as I say the book is entirely distinctive within the robust negotiation literature.

Leathes writes eloquently about the tension between legal training and common sense.  For example, he convinced his client to modify its former practice of opposing every trademark application made by a competitor, and instead focusing only on applications that had business consequences, and then communicating with the competitor with respect to their concerns prior to formally opposing.  As a result, he reports, “[t]he number of oppositions filed by each company against the other almost halved overnight, along with the costs involved.  More interestingly, the dialogue it opened up led to various negotiations for deals over trademark rights that significantly benefited both companies.”

Leathes’ career is the forge in which his lessons on negotiation were learned, and his experiences provide the basis for his conclusions, the proof of their pertinence, and the enjoyment of the narrative by which the book’s content is told.  He tells about the joint expert who, the day before the report is due to the arbitrator, makes it known that an additional payment of $30,000 would assure its safe delivery with conclusions favorable to the client.  He explains both “leverage” and “anchoring” in the context of initially unsuccessful negotiations with post-revolutionary Iran that eventually succeeded upon the initiation of proceedings before the Claims Tribunal in The Hague – because “we had the more credible BATNA.”

Leathes also relates a story that illustrates what one of my students calls “procedural apology.”  An American CEO opened a negotiation by directly saying to his counter-party’s president, “We apologize if you are under the impression that we have misappropriated your technology.  That was never our intent.”  Distrust deflated, and candor and respect restored, a mutually beneficial license agreement eventually resulted.

Over the years, Leathes has been a vocal proponent of “deal facilitation” – the use of a neutral third party to assist transactional lawyers in identifying and claiming value that, by virtue of the prudent caution that accompanies every deal process, might not be uncovered without facilitative intervention.  This section of the book puts Leathes’ argument down on paper in definitive form; one can only wish that, some day, the combination of hubris, inexperience and lack of curiosity that has been the obstacle to this practice might be overcome.

Everyone has their own “boiled-down” list of essential negotiating skills, but Leathes’ list is as good as any I’ve read:

To be most effective, negotiators need to cover a lot of territory:
  • Be perceived appropriately by the other party;
  • Understand as much as possible about those you deal with;
  • Have the best possible information you can get;
  • Know your real leverage and focus on the other party’s;
  • Think carefully about where the other side is coming from;
  • Distinguish between what they want and what they need;
  • Separate fact from fiction, and fairness from unreasonableness;
  • Know when to talk and when to walk;
  • Bring your own side along with you;
  • Know where best to turn for support;
  • Be skilled in listening, questioning and deep exploration;
  • Focus and do not let yourself be distracted; and
  • Generally be psyched up for the task.

There are several aspects of the book with which I take issue.  “Negotiation is the art of persuasion,” Leathes writes – a premise that I have not witnessed with any frequency whatsoever.  Very few are the mediations that I have handled where a party is persuaded to change its fundamental negotiating analysis.  Indeed, I think that I have never seen a party say, “Oh, wow, I see now that I was wrong about this and you are quite right – I adopt your view.”  Parties may learn that their aims are unobtainable without modification, or they may come to assess what’s on the table as more valuable than what they initially sought, but that’s calculus, not persuasion.

Leathes also includes two chapters – one on neuroscience and one on culture – that I find intriguing but useless in practice.  I have never found the application of neuroscience to my work as a mediator; I experience that knowledge to be similar to remembering, during a performance of Tristan und Isolde, that A’ = 440 vps.  It may be true but it yields nothing I can use to help the specific parties in the specific room to deal with each other better.  As for culture, I have both studied and lived with cultural analytical frameworks – often at Michael Leathes’ urging – and have found the views of Jeanne Brett and Geert Hofstede limiting rather than releasing.  To concede that no individual is to be received as a personification of an entire culture seems to me to be inadequate caveat to the thrust of cultural impact on negotiators — which is the general assumption that people of a particular culture may be expected to exhibit certain traits, and that one should be aware of those traits when dealing with individuals from that culture.  I rebel against this postulate both as a matter of personal experience and of moral principle.  Besides, the biggest obstacle I have faced in China, Switzerland, Nigeria, Singapore or Moscow has not been the culturally-based behaviors of those I meet, but rather my own.  I’m a friendly, energetic, large, white, male American, and it’s been through recognizing, anticipating and managing the consequences of other people’s preconceptions of those attributes that I have nurtured the cross-cultural relationships I so cherish.

Leathes also insists that negotiation is not taught in law school, or at least not nearly enough.  He has reasons for this conclusion, but I nevertheless doubt it is sound.  One need only to refer to the database maintained by the University of Oregon to appreciate that, at least in the United States, negotiation skills training is very widely offered in legal education.  It is true that not every young lawyer takes the course, and that one does not need to be trained in negotiation in order either to receive a law degree or pass the bar entrance examination.  I add that it is even truer that negotiation skills more urgently belong in business schools rather than law schools.  But formal negotiation training is by no means ignored by institutions charged with training young lawyers.  Indeed, I’ll challenge Leathes by asking whether Gillette, Pfizer or BAT gives preference to young lawyers who have been trained in negotiation when making hiring decisions — and if not, why not?

The most compelling lessons in the book are not technical, but reflections of Leathes’ own ineffable approach to his work and his relationships with his fellow man.  “Most successful negotiations require a bedrock of patience, respect, decency, politeness and courtesy,” he writes. “[S]mall acts of unexpected thoughtfulness can work wonders, provided your motives are not misinterpreted.  [S]imple gestures like arranging for a chauffeur to collect the party from the airport for transfer to their hotel sends a welcome signal.”  This perception of the key to successful negotiation — treating other people like human beings who are inherently worthy of respect — Leathes is quite right, is not taught.  Nor is it teachable, I suggest.  Yet it can certainly be learned.  There are some people who seem to have been put on the earth to bring out the most creative qualities of others.  Michael Leathes is one of them, and by this book we’re all the better for it.

For further information on the book and its author, go to www.MichaelLeathes.com.

Last Chance for 2-Day International ADR “Boot Camp”

Wed, 2017-05-31 11:47

This post is prompted by mixed motives of alerting practitioners to a great CLE opportunity, and what NPR’s Car Talk used to call its “Shameless Commerce Dept.”

A few slots remain in a two-day International ADR “Boot Camp” being offered by the AAA’s International Centre for Dispute Resolution and New York Law School June 14-16.  It’s a unique opportunity to meet global leadership, brush up on cross-border contract enforcement, earn 17.5 CLE credits, and enjoy a dinner cruise on the Thames.  I hope you will take advantage of it and/or encourage others.

ICDR and New York Law School Present…

A Two-Day Course in London:

International Dispute Resolution:

The London Boot Camp

How to Stay Ahead of Your Clients’ Globalized Business

REGISTER HERE

Participants will learn:

  • How to draft enforceable cross-border contracts;
  • The fundamentals of international commercial mediation and arbitration;
  • How to enforce international arbitral awards in other jurisdictions

…while earning 17.5 CLE credits (including 1.0 Ethics credits).

DATES:          Wednesday June 14 – Friday June 16, 2017

LOCATION:  Institute of Advanced Legal Studies, Russell Square, London, England

TIME:             5:30 – 7:15 p.m. Wednesday, welcoming cocktail reception to follow

9:00 a.m. – 5:30 p.m. Thursday

9:00 a.m. – 6:00 p.m. Friday, Gala Dinner Cruise to follow

CLE:                17.5 credits (16.5 credits in Professional Practice; 1 credit in Ethics)

COST:             $950.00

MEET THESE ACCOMPLISHED PRACTITIONERS:

  • Kenneth D. Beale, Boies Schiller Flexner
  • John Maurice Bishop, Pinset Masons LLP
  • Andrew Burr, Past President, Chartered Institute of Arbitrators – European Branch
  • Ekaterina Finkel, Baker & McKenzie
  • Philip Howell-Richardson, Independent Mediators (UK)
  • John Lowe, Past President, Association of Corporate Counsel – Europe
  • Paul Moss, Past Head of Claims, QBE European Operations
  • Christopher Newmark, Spenser Underhill Newmark
  • Peter Phillips, Director, ADR Skills Program, New York Law School
  • Edward Poulton, Baker & McKenzie
  • Andy Rogers, CEDR

PREMIER GALA DINNER CRUISE (included at no additional cost):

7:45 pm Friday 16 June.  Luxurious Four-Course Dining on the Harmony – Departing from Embankment Pier for a 2-3/4 hour Cruise — See London from the Thames!

TOPICS ADDRESSED INCLUDE:

  • Law and Practice of International Commercial Dispute Resolution
  • Mediation Practices and Regulations in the UK, Europe and Asia
  • International Arbitration Practice Under ICDR, LCIA, ICC and CIETAC Rules
  • Cross-Border Dispute Management from the Corporate Client’s Perspective
  • Ethics for Negotiators
  • Enforcing Arbitration Awards Under the New York Convention
  • Insurance ADR: A Global Perspective
  • Introduction to the Chartered Institute of Arbitrators
  • Highlights from the Global Pound Conference

REGISTER HERE

Verdict in JAMS Lawsuit

Thu, 2017-05-25 09:37

A few months ago we posted disconcerting news of a dissatisfied party to a California arbitration who, rather than seeking to vacate the award pursuant to state or federal arbitration statutes, sued the arbitrator and the service provider, alleging that the arbitrator’s qualifications had been misrepresented on the provider’s website.

The matter went to trial and the jury found that, while it could not reach a conclusion as to the accuracy of the arbitrator’s representations, the claimant had failed to show any damage resulting from reliance on those representations, and the trial judge dismissed the claims.

A complete account of the result may be found here.   The case has caused some in the profession to reassess (with caution) how they market and promote their services as neutrals.  If such possible liability provokes a “cleaner” market, then perhaps some good may come of this.  But it would be at a very great cost.

From time immemorial, private commercial decision-making has been a boon to merchants who did not want lengthy and legal proceedings over essentially mercantile matters.  This goal is reflected in American arbitration statutes, narrowly circumscribing the bases on which an arbitration award can be subject to judicial scrutiny.  The mere fact that this claim was allowed to go to trial bodes poorly for the integrity of the arbitration process.  If the arbitrator’s behavior amounted to misconduct, vacatur under the statutes was available.  It did not, but the arbitrator was subjected to expensive public scrutiny regardless, along with the organization through which her services were engaged.  This is not good.