Mark A. Shank and John L. Turner from Gruber Hurst, Johansen & Hail, LLP wrote a timely article about arbitration, published this month by the Texas Bar Journal. The authors do an excellent job at explaining the virtues of arbitration (speed, informality, and low cost) and at the same time, address the latest challenges to mandatory arbitration by legislation introduced in Congress and the Texas Legislature. If you missed the article, here is the full text: The Future of Arbitration. Technorati tags: arbitration, ADR, law, Arbitration Fairness Act of 2009, Arbitration Fairness Day
Continue reading...Last week, the U.S. Supreme Court decided Arthur Andersen LLP v. Carlisle, No. 08–146, 2009 WL 1174853 (May 4, 2009). Justice Scalia delivered the majority opinion, joined by Justices Kennedy, Thomas, Ginsburg, Breyer, and Alito. Justice Souter filed a dissenting opinion, in which Chief Justice Roberts and Justice Stevens joined. The Court decided the following issues: Whether appellate courts have jurisdiction under Section 16(a) of the FAA to review denials of stays of litigation requested by nonparties to the arbitration agreement. Whether Section 3 of the FAA can ever mandate a stay of litigation by nonparties to the arbitration agreement. The Court concluded that Section 16(a) with “clear and unambiguous terms” expressly authorizes interlocutory appeals of motions denying Section 3 stays. Stressing that “[t]he jurisdictional statute here unambiguously makes the underlying merits irrelevant,” the Court rejected that this interpretation will produce frivolous interlocutory appeals. Next, the Court explained that Section 2 of the FAA makes arbitration agreements “valid, irrevocable, and enforceable, ” requiring courts “to place [arbitration] agreements upon the same footing as other contracts.” Then, Section 3 allows enforcement of Section 2, by requiring the courts to stay litigation, “on application of one of the parties” if the issue is “referable to arbitration under an agreement in writing.” When interpreting the phrase “one of the parties,” the Court clarified in footnote 4, that the word “parties” refers to parties to the litigation, and not to the parties to the contract. Then, the Court reasoned that Section 3 does not restrict the enforceability of Section 2. As a result, state law should be applied to determine which contracts are binding under Section 2 and enforceable under Section 3. The Court added that because state law allows contracts to be enforced by or against nonparties through different theories (assumption, piercing the veil, alter ego, incorporation by reference, third-party beneficiaries, waiver and estoppel), then nonparties may invoke Section 3. Finally, the Court held that appellate federal courts have jurisdiction to review the denial of a request for a Section 3 stay and that a litigant who was not a party to the arbitration agreement may invoke Section 3 if the relevant state contract law allows the nonparty to enforce the agreement. Technorati Tags: arbitration, ADR, law, U.S. Supreme Court, Arthur Andersen v. Carlisle
Continue reading...The American Arbitration Association recently introduced Non-Binding Resolution Services (arbitration and mediation) for disputes between businesses & consumers and employers & employees. Technorati Tags: arbitration, ADR, law, mediation, non-binding arbitration, consumer arbitration, employee arbitration
Continue reading...Yesterday, former Democratic senator and presidential candidate George McGovern spoke out against the Employee Free Choice Act of 2009 (S. 560, status, previously blogged here): Last year, I wrote on these pages that I was opposed to this bill because it would eliminate secret ballots in union organizing elections. However, the bill has an additional feature that isn’t often mentioned but that is just as troublesome — compulsory arbitration. Currently, labor law maintains a careful balance between the rights of businesses, unions and individual employees. While bargaining power differs depending on individual circumstances, the rights of the parties are well balanced. When a union and a business enter negotiations, current law requires that both sides bargain “in good faith.” In a contract negotiation, each party typically perceives the other as too demanding. But no one loses their right to contract willingly or suffers being forced to agree to anything. Employees can strike if they feel that they have been dealt with unfairly, but it is a costly option. Employers are free to reject labor demands they find to be too difficult to accept, but running a business without experienced employees is itself difficult. Both sides have an incentive to press their demands, but they also have compelling reasons not to press their demands too far. EFCA would disrupt that balance by enabling government-appointed lawyers to decide what they believe is fair or reasonable. The WSJ article is here: “The ‘Free Choice’ Act Is Anything But.” Technorati Tags: arbitration, ADR, law, Employee Free Choice Act of 2009
Continue reading...Disputing is published by Karl Bayer, a dispute resolution expert based in Austin, Texas. Articles published on Disputing aim to provide original insight and commentary around issues related to arbitration, mediation and the alternative dispute resolution industry.
To learn more about Karl and his team, or to schedule a mediation or arbitration with Karl’s live scheduling calendar, visit www.karlbayer.com.
Disputing is published by Karl Bayer, a dispute resolution expert based in Austin, Texas. Articles published on Disputing aim to provide original insight and commentary around issues related to arbitration, mediation and the alternative dispute resolution industry.
To learn more about Karl and his team, or to schedule a mediation or arbitration with Karl’s live scheduling calendar, visit www.karlbayer.com.