|ALL SECTIONS | ABOUT MEDIATION | Civil | Commercial | Community | Elder | Family | ODR | Public Policy | Workplace|
Subscribe to the Mediate.com NewsletterSign Up Now
Reprinted with permission from How ADR Works, Editor in Chief Norman Brand, published by BNA Books, Washington, D.C. Copyright © 2002 by the American Bar Association, Chicago, IL. This is an adaptation of the original chapter.
Many labor and employment lawyers are accustomed to choosing arbitrators in collective bargaining cases. They are familiar with the structure of collective bargaining arbitration and the considerations that go into choosing an arbitrator. Employment arbitration is structurally different from collective bargaining arbitration and requires different considerations in choosing an arbitrator. Labor and employment lawyers who are not familiar with collective bargaining arbitration need to consider the structural differences for the guidance it can provide in choosing the best employment arbitrator for their case. By considering these differences, both types of counsel can increase the probability of an efficient, expeditious, and fair process.
Different characteristics are needed in collective bargaining and employment arbitration. For collective bargaining arbitration, someone with broad experience in workplace disputes and an understanding of the labor-management corollary to the Hippocratic oath: “First, do no harm to the relationship” is needed. Experienced arbitrators try to avoid damaging the parties’ relationship while deciding the grievance in conformance with the facts and the collective bargaining agreement. Often the parties want their arbitrator to have experience on both the labor and management side, or some other indicator of ideological flexibility. In a contract interpretation case, they may want an arbitrator who has negotiated contracts and appreciates the bargaining dynamic that creates contract language that is sometimes deliberately ambiguous. They are likely to want an arbitrator who is willing to make rulings to shape the hearing and a clean decision that ends the dispute. 
In employment arbitration there is usually far less concern for an ongoing relationship because the employee has been fired or has quit (alleging constructive discharge), and neither side wants to reestablish the relationship. In many cases, the agreement to arbitrate will have been imposed by the employer. Often there is a bare agreement to arbitrate and nothing more. The arbitrator needs to know civil procedure in the relevant jurisdiction and appreciate the difference between arbitration and litigation so that an efficient, expeditious, and fair process is ensured.
An employment arbitrator must overcome some substantial systemic problems in providing an efficient, expeditious, and fair process. Arbitrators are not judges—even when they are retired judges—and they do not have any inherent power to issue sanctions to enforce their orders.  Although they may purport to issue sanctions (through an interim award, for instance), arbitrators still rely entirely on courts to enforce their awards.  Indeed, arbitrators must rely on one party to enforce their orders by bringing a confirmation motion in court and then using the court’s postjudgment remedies. In the absence of a specific grant of power from the parties, rules that the parties have incorporated into their arbitration agreement, such as the American Arbitration Association’s National Rules for the Resolution of Employment Disputes (NRRED), or a specific state statute granting the arbitrator enforcement powers, arbitrators are generally without power to enforce any order. This creates the potential for one party to the employment arbitration to frustrate the expeditious and efficient conduct of the arbitration.
In choosing an employment arbitrator, counsel must look for qualities that go well beyond a good understanding of employment law and the workplace. Employment arbitrators must have a willingness to take actions that are not career-enhancing in the short run. They may have to issue sanctions, cut off discovery, or refuse to hear evidence of tangential value because it will take an amount of time to present that is enormously disproportionate to its value. They may risk burning bridges with one side because of the need to control that side’s behavior. They may award punitive damages, if appropriate, or go into uncharted legal territory in order to provide due process to both sides. They will always have to balance due process and expedition, while one party may criticize them (explicitly or implicitly) for acting to prolong the hearing because they are paid by the hour. There are significant pressures on arbitrators because they want to do justice and continue in their chosen career.
Professional arbitrators who have practiced their profession for many years act for the long term. They recognize that their only asset is their reputation for making difficult choices fairly. An individual case may mean that a certain lawyer will never use an arbitrator again because he decided an important ruling—or the case—adversely to the lawyer. The lawyer may tell her colleagues in the plaintiff or defense bar that this arbitrator was lousy and was obviously biased toward the other side, in the hope of influencing them not to use that arbitrator. Professional arbitrators know there is no preventing this; it is simply a risk that goes with the job. Arbitrators cannot be both universally popular and fair, so they have to forgo popularity and make difficult choices fairly. Professional arbitrators also know that this bad “word of mouth” can be mitigated if others read their awards (arbitrators cannot provide them without permission, because the parties have a right to confidential¬ity), and they hope that both sides will circulate their awards. Ultimately, professional arbitrators know that the marketplace will decide their acceptability. Although I am convinced that this marketplace determination is the best means of ensuring arbitral ethics and competence, I recognize that those of us who have been found “acceptable” over a decade or two may overvalue the wisdom of the marketplace.
In choosing an employment arbitrator, counsel may be inclined to think that a retired judge will provide all the characteristics required. After all, the judge has made tough decisions, issued sanctions, and run his courtroom with an iron hand. Some judges do wonderfully in adapting to arbitration and may be just what is needed, but some do not. Although the ads for retired judges in legal newspapers make it appear that every retired judge is experienced in employment law, the number of reported employment cases suggests that the experience of some may be quite thin. Moreover, the two jobs—judge and arbitrator—diverge in significant respects, and some retired judges are unable to successfully make the transition. Retired judges are accustomed to staff support, party deference, and broad powers to sanction counsel backed by the power of the state.  This can certainly lead to a well-run courtroom, but retired judges acting as arbitrators can count on none of this. Judges are accustomed to having a full docket supplied by the public court system. They may have retired and announced their availability to act as arbitrators with visions of economic sugarplums dancing in their heads, but no one is obliged to use them a first or second time. They, too, are paid by the hour and are subject to the same real and perceived pressures as new arbitrators who are not former judges. Finally, their case management style may be coercive, and that does not translate well to arbitration, where arbitrators have far less coercive power over the parties. Counsel should consider all of the ways in which arbitration and litigation differ before deciding whether to choose a retired judge or a professional arbitrator for an employment arbitration.
The most important factor in ensuring an expeditious, efficient, and fair process is choosing the right neutral. Having known rules that govern the arbitrator and the parties is a close second. The best time to decide on these rules is when the arbitration agreement is being written. That is when both parties have the greatest interest in fair rules, because they do not have an existing dispute that allows each to determine whether it will be disadvantaged by a particular rule. Thus, the parties are likely to agree on a fair set of rules.  The second best time, although a very distant second, is during the first case management conference. If there is a bare-bones arbitration agreement, it can be stipulated that the arbitration will be conducted under the NRRED or some other set of rules promulgated by the Center for Public Resources, Judicial Arbitration and Mediation Services, or another arbitration provider organization. If this is the plan, opposing counsel should be provided with the rules well before the case management conference. These rules can be modified by mutual agreement to the extent they are found to be cumbersome. The important principle is to give the arbitrator an additional written source of specific authority beyond the mere agreement to arbitrate. If an arbitrator makes a specific order based on the parties’ written agreement giving her power to make that order, a court is very likely to enforce the arbitrator’s order on a motion to confirm an interim award.
If specific rules or modifications to them cannot be agreed upon, the arbitrator may want to obtain additional specific authority for some portion of the arbitration. For instance, under California law, the arbitrator can be granted the same discovery powers as a superior court by agreeing, under Section 1283.1(b) of the California Code of Civil Procedure, to incorporate the discovery provisions of Section 1283.05 into a postdispute submission agreement. Regardless of whether there is a state statute addressing the issue, state or federal discovery rules can be incorporated into the agreement. That would give the arbitrator, by agreement, the power and sanctions available to a judge.  It is preferable to specify both that the arbitrator is entitled to modify and interpret the rules in the interest of an expeditious process and whether the arbitrator will have sanction authority. It is, of course, much easier to agree to that authority before discovery begins. Finally, it makes sense to specify that any sanction issued by the arbitrator is to be in the form of an “interim award” and is to be enforced in the same manner as an award in the relevant jurisdiction.
In choosing an employment arbitrator, you must consider three qualities relating to discovery. First, the arbitrator must be a quick study. He has to grasp the controversy to be able to create a useful discovery order at the case management conference. Second, the arbitrator must be cognizant of the need to appropriately limit discovery to conform to legitimate party expectations about arbitration. If you want the exact same discovery (and disputes) as occur in civil litigation, it is a good idea to choose a retired judge. The process, however, is unlikely to be speedy, and it is likely to be costly. Third, the arbitrator should be decisive. There are stories about employment arbitrators who were unwilling to decide even relatively straightforward issues without briefs. That can become a costly and time-consuming process. If efficiency in the arbitration is important, choose a decisive arbitrator. 
The best guarantor of finality in employment arbitration is a well-reasoned opinion that accompanies the award. If the agreement does not require a reasoned opinion, this should be agreed to at the initial prehearing conference. There are two reasons for this. First, a well-reasoned opinion explains to the losing side’s client why the case was lost. Second, the federal courts have reserved the right to review employment arbitration awards in statutory discrimination cases for “manifest disregard of the law,” in addition to the statutory criteria. That deferential standard is most likely to be applied where the arbitrator has made clear her attempt to interpret and follow the law, rather than leaving the court to guess at what was done. In choosing an employment arbitrator, counsel will want to review any earlier opinions in order to see the arbitrator’s reasoning, intellectual predilections, and ability to write. An arbitrator who can write an opinion that will convince a court that there was no “manifest disregard of the law” is vital. If you read an opinion in which the side you do not normally represent has won and you can say, “Even if I don’t agree with the conclusion, he makes a good case,” you have found an arbitrator who is not likely to be vacated.
The differences between statutory employment and collective bargaining arbitrations demand different qualities in those who arbitrate each. Some arbitrators are highly qualified in both types of cases; others are better suited for only one type of arbitration. Knowing the different qualities required can help in choosing the right arbitrator for your case.
1 In some instances, other values may drive the choice of an arbitrator. Parties may want someone with a reputation for mediating cases when they are both uncomfortable with the possibility of the outcome but cannot bring themselves to settle without help. In some instances, the parties actually want someone to “split the baby,” because that is where they both think justice leads, but agreeing to the “just” outcome would require compromising a principle that could be important in future cases.
2 California law provides an exception to this general principle for cases “arising out of or resulting from any injury to, or death of, a person caused by the wrongful act of another. CAL. CIV. PROC. CODE §1283.1(a). It allows arbitrators to order the same discovery as in a superior court civil action (id. §1283.05(a)) and to enforce discovery rights through the same sanctions and penalties (except arrest or imprisonment) as a superior court. Id. §1283.05(b)(c). Parties can, and do, voluntarily incorporate these discovery powers into their arbitration agreement.
3 Under California law, a discovery sanction is enforced in the same manner and by the same standards as an award on the merits. CAL. CIV. PROC. CODE §1283.05(c).
4 Professional arbitrators view the deference of parties as a transient phenomenon—it lasts only as long as the arbitrator’s jurisdiction over the parties.
5 Where the employer imposes the arbitration agreement, as noted earlier, the courts ensure due process by refusing to compel arbitration under procedurally unfair systems.
6 There are limits. I do not think a court should or would enforce arrest or imprisonment sanctions, because these are powers that belong solely to the state. Similarly, a court may not enforce sanctions for an ethical breach because the courts generally enforce lawyer ethics. Indeed, in my view, it would be inadvisable to ask an arbitrator to sanction “unethical” conduct, as opposed to asking for sanctions against opposing counsel for behavior, such as disobeying a specific order from an arbitrator. Monetary sanctions for failing to obey proper arbitral orders would, in my view, be enforced by the courts on a confirmation motion.
7 Some suggest choosing a busy arbitrator to ensure an efficient process.
|Free subscription to comments on this article||Add Brief Comment|