Arbitration: then (in a Michael Crichton novel) and now

November 01, 2013 - by: Matt Gilley 3 COMMENTS

The late Michael Crichton had an interesting contrarian streak for a popular fiction novelist. In one of his last novels, State of Fear, he stuck his thumb in the eye of the global warming/climate change “consensus” (it remains the only novel I remember reading that had footnotes). 

Readers saw his contrarian streak a decade earlier, too, in Disclosure which also became a motion picture featuring Michael Douglas and Demi Moore. Dislosure hit shelves at a time when sexual harassment was taking a prominent place in news media reports about the corporate world but, in a twist, the plot centered on a Machiavellian ploy by a female executive to use harassment allegations to edge out a male counterpart.

Disclosure wouldn’t give us a very interesting column on sexual harassment since the harassment details are fairly pedestrian a few decades later. Disclosure, however, was interesting for another reason: The company, the female executive, and the accused didn’t play out their dispute in a courtroom drama, but during employment arbitration in a stale, anodyne law firm conference room. “Alternative dispute resolution” was a new legal trend at the time (hey, lawyers can be edgy, too!) and what better setting to explore a cutting-edge practice than Seattle in the early ’90s?

Two decades later (boy, was that hard to write), employment mediation has grown up (translated, the Supreme Court has said a few things about it) so it’s worth some time to see how mediation’s promise stacked up against its record in reality:

  • First, arbitration won people over (not the least of which were five Supreme Court justices).  Over the last several Supreme Court terms (particularly since 2010 with Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp.), the Supreme Court has taken several opportunities to approve of mediation for dispute resolution as opposed to requiring parties to litigate in a court of law.  This year, in American Express v. Italian Colors Restaurant, the Court approved of waivers for class and collective actions.
  • Second, arbitration may have overstated its cost savings but has proved to have undeniable advantages. Anecdotally, I hear from arbitrators that they don’t believe they save the parties in litigation costs or maybe even time, but the advantage of a (supposedly) neutral, professional, and dispassionate fact-finder cannot be overemphasized.

Therefore, the cutting-edge process we saw in Disclosure is all grown up now. I think we’re all the better for it, too.

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1 Gerald Harris
07:19:33, 06/11/13

Do you think it is best to bring up the idea of mediation early in a potential contract agreement? I have found that it diffuses some concerns and takes some pressure off for both parties when addressed very early. Is this what you have found also, or would you present the option later in the contract?

2 Matt Gilley
05:36:35, 10/11/13

Thanks for the response, Gerald. I agree that any ADR methods need to be addressed from the get-go. First of all, you want to make sure you get consideration for the agreement to use the ADR method. Second, as you identify, it’s always in everyone’s best interest to be sure you’re all on the same page as to how you plan to resolve disputes. In the employment area, we often advise company-wide “town halls” to roll out an arbitration agreement to inform employees of the process and advantages. If you move to compel arbitration, you don’t want to be stuck dealing with an equitable argument from opposing counsel that they were “tricked” out of court.

3 Matt Gilley
05:42:38, 10/11/13

Also, faithful and attentive readers, we have revised the post to reflect that State of Fear (2004) came out just a decade after Disclosure (1993). I can’t believe it’s been that long. Time flies….

Thanks to you all for reading and for your eagle eye!

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