Monthly Archives: April 2012

Is Staying at Work an Agreement to Arbitrate?

Posted on by Joel Grossman, Esq.
Joel M. Grossman, Esq.

Joel M. Grossman, Esq.

In the wake of the highly publicized United States Supreme Court decision in AT&T Mobility v. Concepcion, many management-side lawyers have urged their clients to take advantage of the decision. Specifically, they have urged employers who have arbitration agreements with their employees to add a class waiver provision to the agreement; as for their clients who don’t yet have an arbitration agreement, some counsel have advised them to adopt an arbitration agreement with a class waiver provision.

If an employer imposes a new or revised policy requiring all disputes to be arbitrated, is that policy binding on employees who don’t sign it? What if the employer’s announcement states that the new arbitration policy is mandatory and that employees who continue in employment are deemed to have accepted it whether or not they actually sign it? Would it matter if an employee actually objected to the policy, and told the company that he had no intention of arbitrating claims?

These intriguing questions are addressed in the recent Northern District of California case of Bayer v. Neiman Marcus Holdings, Inc. Plaintiff Bayer was employed by Neiman Marcus in 2007 when it advised its employees by mail that it was implementing a mandatory arbitration program. Employees were provided with an arbitration agreement, which they were directed to sign. The plan also stated that acceptance of the plan was a condition of ongoing employment, so that even employees who did not sign it were deemed to accept it by remaining on the job. Bayer not only did not sign the agreement, he told Neiman Marcus both orally and in writing that he refused to become a party to the agreement. He did, however, remain an employee. Four years later Bayer was terminated, and he filed a lawsuit in court. Neiman Marcus filed a motion to dismiss the lawsuit and compel arbitration, pursuant to the arbitration agreement, which it claimed Bayer had accepted by virtue of remaining in employment after the policy had been distributed.

The court denied Neiman Marcus’ motion to compel arbitration. The court began its discussion of the issue by noting that under California law an employee’s acceptance of the terms of an arbitration agreement can be either express or implied-in-fact. In this case, since the employee did not sign the agreement, there was no express acceptance. The court further held that in light of the employee’s written and oral objections to signing the agreement, there could not be an implied-in-fact contract either, even though the employee remained on the job.

It is not yet clear whether this district court case, which involves a statutory claim, would also apply to common law claims such as wrongful termination in violation of public policy. Bayer is on appeal to the Ninth Circuit, and it will be interesting to see how that court rules.  Bayer raises important questions as to whether an employer’s unilateral implementation or revision of an arbitration program, whether to prohibit class actions or for any other reason, will be deemed binding even if an employee did not expressly agree to accept the new term. An implied acceptance, such as remaining in employment, may not suffice. Stay tuned.

Former Weinstein Fellows Host Fourth Annual Negotiation Competition

Posted on by Chris Poole

For the past eight years, JAMS Weinstein International Fellow Andrew Wei-Min Lee and his colleague Vivian Feng Ying Yu have been teaching negotiation in Mainland China. Following is Mr. Lee’s experience creating the Chinese University Negotiation Competition.

China has a long history of using mediation as a means to address problems. However, there is very limited teaching of negotiation, mediation, arbitration or other forms of ADR in mainland Chinese universities.

We see raising awareness of domestic history and international practice in the field of ADR as a key part of providing better dispute resolution services in China. We also believe that by influencing students at China’s top universities today, we are supporting the greater understanding, acceptance and use of ADR for tomorrow.

In 2009, with the support of U.S. Agency for International Development and the University of Massachusetts, a national Chinese University Negotiation Competition was established. The goal was to use a national competition to encourage Chinese universities to develop and offer dispute resolution courses in their schools.

The winning team then has the opportunity to fly to the United States to further their studies in ADR and return home to China and be ADR flag-bearers.

A key part of the competition is to pair a Chinese faculty member with an overseas visitor to judge each round. This creates a shared experience by which both Chinese and western judges can interact, exchange and jointly mentor the students.

On May 12-13, 2012, the Leading Negotiation Institute of Shanghai and Zhejiang University in Hangzhou will host the fourth annual competition. We are honored and deeply appreciative that this year our judging panel will consist of Weinstein Fellows Dimitra Triantafyllou (Greece), Laila Ollapally (India), Vivian and myself, along with JAMS panelist Bruce Edwards.

By building on the relationships we developed and opportunities granted to us by the Weinstein Fellowship, this year’s competition will benefit from the input of world class mediators from India, Greece, Thailand and the United States working alongside Chinese ADR experts.

We believe this competition will continue to grow and inspire future generations of Chinese ADR leaders.

Arbitration Costs and the Art of Planning Ahead

Posted on by Chris Poole

Much has been written about the perception – and often the reality – that arbitration is no longer faster or cheaper than litigating in court.  In fact it is the most widely discussed topic in ADR today.  So whose fault is it?  Turns out it is everyone’s fault – in-house counsel, outside counsel, arbitrators, ADR providers and probably a few other people.

The component parts of the problem are well known.  They include excessive discovery, numerous motions, too many witnesses, too many delays and so on.  And virtually every ADR provider and organization has responded by adopting new rules and procedures to speed things up:

You get the idea?  So let’s get back to basics. There are many reasons why ADR has become part and parcel of the system of justice in the U.S. and in many countries around the world.  The primary reasons are that it should be cheaper, take less time and remain confidential.  It also allows for much more flexibility for the parties to tailor the process to their needs.

But therein lays the rub.  In many cases one party is interested in a faster, more efficient arbitration process but the other party may be more interested in getting to the bottom of every nuance of the case, and as Admiral David Farragut said at the Battle of Mobile Bay, “damn the torpedoes.”  So much for faster, better, cheaper.

But back to our theory that it’s everyone’s fault: that also means everyone can play a role in solving the problem.  CCA’s paper on Protocols for Expeditious, Cost-Effective Commercial Arbitration provides a series of excellent examples on what each constituency can do.  But the example that stands out the most is having the right agreement in the first place.  Most contract provisions that include dispute resolution language may specify some basic guidelines on resolving disputes through arbitration, but they lack specificity about how to resolve those disputes efficiently.  Language can be introduced that puts parameters around discovery, motions, time frames, and the specific rules that will be adopted by both parties.  By doing this, efficiency is built in to the process before it even begins – and what smart business wouldn’t want that?