[update: the judgment confirming the award in Chester v. iFreedom is here; from Settle It Now] In case you have not heard, a California court has confirmed recently a $4.1 billion award for an employment-related dispute. Following is an AP article from Yahoo Technology News discussing the case. We welcome your commentary! LA judge OKs $4.1 billion award in pay dispute Posted on – Fri Jun 5, 2009 LOS ANGELES – A judge approved a $4.1 billion arbitration award against an Internet communications company accused of firing its chief operating officer in a dispute over commissions he said he was owed. The award confirmed last week in Los Angeles Superior Court includes commissions, along with back wages, interest and other payments for Paul Chester, who was fired four years ago by iFreedom Communications Inc. Arbitrator William F. McDonald wrote in his decision that the award is “appropriate to punish and make an example of defendants.” Although Judge Teresa Sanchez-Gordon agreed with the award, Chester’s attorney conceded it may be difficult to collect the entire amount. “There are very few entities that could pay such an award or such a judgment, but we certainly expect that our client will want us to explore all the possibilities,” Scot Bernstein said Friday. McDonald, a retired judge, wrote in the award filing that privately held iFreedom and its founder Timothy Ringgenberg were liable for breach of contract, failure to pay wages and other claims. He found that Chester did not receive the commissions of 5 percent on iFreedom’s gross revenue when he came to work for the company in June 2004. He was fired without cause in September 2005 after he confronted iFreedom about the commissions, the filing said. A phone number for Ringgenberg in Fountain Valley was disconnected. A call placed to an iFreedom office in Laguna Hills was not picked up. Micheal LaRoy, a University of Illinois law professor who focuses on arbitration law, said he has never encountered an arbitration award that approached that amount, and he predicted it would likely be reduced or vacated on appeal. He said courts rarely allow punitive damages to stand in arbitration awards, even when they are less generous. Related Posts: Court Issues $4.1 Billion Judgment to Employee Confirming Arbitration Award for Unpaid Commissions, Securities, and Punitive Damages for Fraud, Triangle Business Journal, June 2, 2009. $4.1 Billion JAMS Arbitration Award, Settle It Now, June 3, 2009. Two Arbitration Decisions, Workplace Prof Blog, June 4, 2009. Technorati Tags: law, ADR, arbitration, employment arbitration

As previously blogged, the 81st Regular Session of the Texas Legislature adjourned on June 1st. Following is a summary of some bills related to alternative dispute resolution filed during the session. Bills that passed: S.B. 1650, authored by Senator Duncan (R-Lubbock), would grant Texas appellate courts jurisdiction over certain interlocutory appeals arising under the FAA. Here are the bill’s history and analysis. H.B. 1083. The bill, authored by Rep. Gary Elkins, states that “Except as provided by agreement of the parties, a court may not order mediation in an action that is subject to the Federal Arbitration Act (9 U.S.C. Sections 1-16).” Here are the bill’s history and analysis. H.B. 2256. The bill relates to mediation of out-of-network health benefit claim disputes concerning enrollees, facility-based physicians, and certain health benefit plans. Here are the bill’s history and analysis. Bills that did not pass: S.B. 222, authored by Senator Royce West, would amend the Texas Arbitration Act to ban pre-dispute arbitration in employment, consumer, and franchise contracts. In addition, it would prohibit arbitration of civil right claims. The bill’s history is here. H.B. 2139. Authored by Rep. McClendon, the bill establishes a victim-offender pretrial mediation program for first-time offenders. The bill’s history is here. H.B. 2095. Filed by Rep. Farrar, relating to the regulation of claims against residential home builders. This bill would prohibit charging homeowners with fees in connection with a state-sponsored inspection or dispute resolution process and arbitration required under the same title. The bills’ history is here. H.B. 2896. Filed by Rep. Leibowitz, relating to forms to be used by builders in contracts for the sale or construction of a new home. This bill provides that a contract form requiring the parties to agree to binding arbitration can not be adopted. The bill’s history is here. H.B. 3426. Filed by Rep. Hernandez, relating to the notice required by certain mortgage servicers before foreclosing on real property. This bill provides mediation rules for foreclosure disputes. The bill’s history is here. H.B. 3482. Filed by Rep. Coleman, relating to the notice required by mortgage servicers before foreclosing on real property. This bill is similar to H.B. 3426. The bill’s history is here. S.B. 1475. Filed by Senators Ellis, Van de Putte, and Watson, relating to the notice required by mortgage servicers before foreclosing on real property. This bill is identical to H.B. 3426 and similar to H.B. 3482. The bill’s history is here. H.B. 2696 would prohibit one contracting party from requiring the other party to agree to arbitration as a condition of the contract. It also provides that an agreement is unconscionable if its enforceability would violate a right protected by either the U.S. or Texas Constitutions. In addition, an agreement to arbitrate must be displayed prominently in 12-point bold type. The bill’s history is here. S.B. 556 would amend the Insurance Code by adding a clause to provide for binding arbitration agreements within the context of health care contracts with physicians and health care providers. The bill’s history is here. H.B. 1635 would abolish the Texas Residential Construction Commission and provides for the phasing out of arbitration claims. The bill’s history is here. H.B. 2539 relates to a disaster recovery insurance claims mediation program. The bill’s history is here. It is worth noting that the Governor has until June 21st to either sign or veto the bills that passed. Also, if not vetoed, the bills that passed will become effective on September 1st, unless the bill states a different date. We will discuss some of these bills in detail in future posts. Technorati Tags: law, ADR, arbitration, mediation, Texas, legislation

Although the 81st Texas Legislature adjourned Monday night, some speculate that the Governor will call a special session to address legislation to keep five state agencies from shutting down: the Texas Department of Transportation, the Texas Department of Insurance, the Texas Racing Commission, the Texas State Affordable Housing Corp., and the Office of Public Insurance Counsel. As the dust settles, we will comment on the dispute resolution bills that passed and the ones that didn’t this legislative session. Stay tuned. Technorati Tags: arbitration, ADR, law, mediation, Texas Legislation

Further to our May 21th announcement of the formation of a LinkedIn Commercial and Industry Arbitration and Mediation Group, we are pleased to share with you that the group has since grown to 76 members. We welcome new members. Persons who should consider joining this group include arbitrators; mediators; in-house and outside counsel; law professors; dispute-resolution consultants; members of ADR organizations; business entity representatives and principals whose day-to-day responsibilities include dispute resolution; and law students and other students of commercial and industry ADR. If you are already a member of LinkedIn, please click here to apply for membership in the Group. If you are not a LinkedIn member, click here, and you will be guided through the process of creating a LindedIn profile. Joining LinkedIn is free, as is joining the group. We hope you’ll join us and participate in the interesting discussions! Technorati Tags: arbitration, ADR, law, Linkedin,