MEMO

TO:

FROM:

DATE:

SUBJECT: EXECUTORY ARBITRATION

  Due to various expensive lawsuits with employees, the company should add a new policy and provide disputes resolution through arbitration.  First, arbitration is most effective because cases are solved within the shortest time possible thereby eliminating the appeal process (Cooley, 2003).  In addition, arbitration is flexible unlike court litigation which involves various procedure rules. Note that in mutual agreement, the parties involves will exclude interrogation of witness and create their own rules.  In arbitration, the process of discovery and trail is less costly unlike in court litigation where the process of pre-trial discovery requires higher cost.  In comparison with court litigation, the arbitrators or one arbitrator will hear the case and make decision unlike in courts where multiple judges are required to adjudicate the pre-trial disputes (Cooley, 2003).  However, there are some disadvantages associated with arbitration such as lack of transparency. The privacy in making decision result to bias since the decision is not publicly reviewed by courts. Lack of transparency also results to “apparent fairness” where the arbitrator opts not to follow the law and as a result, there are less favorable outcomes. There is also a questionable objectivity when arbitrators are chosen by parties from internal environment. They tend to be less objective thereby causing bias (Cooley, 2003).  However, there are alternatives which should be considered in solving cases rather that litigation. The company should also consider negotiation as an alternative dispute resolution method.  This is a satisfactory method since two or more parties will become into reconciliation after face to face communication.  Through discussion and mutual concern, the parties will gain mutual benefit and develop an agreement. The company should also consider facilitation.  Facilitated negotiation is important since the   parties which hold the case will be motivated to reach into an agreement (Cooley, 2003).

Executory arbitration is legal. The National Labor Relations Act (NLRA) allows employees to have a ‘collective bargaining agreement’ which involve an arbitration clause. With voluntary consent, the arbitration law becomes enforceable and all disputes are solved under the power of contract doctrines. For the arbitration to be enforceable, employee are required to have ‘knowing and voluntary consent’ (Reilly, 2002). This means that employees should be conscious of what is involved in the agreement. There should be a contractual standard in order to avoid unconscionability. This will determine the enforceability and it will abide with contract law. This means that arbitration agreements are enforceable under the federal law. It is also important to note that voluntary consent provides effective resolutions by arbitration. Arbitration law is presented under the voluntary-assigned duties and many employees make a non-negotiable employment terms (Reilly, 2002). The law of arbitration compels the employees to do the right thing since they are protected by the securities law. Executory arbitration is legally binding and employees have the opportunity to present their agreements. It is worthy to say that arbitration is a constitutional guarantee since employees have right to a jury trial under the Civil Right Act.  The company should consider implementing this new policy rather than submitting claims to judge. Executory arbitration is legal under both the Constitution and Amendments. The FAA introduced a contractual approach which holds the principle of executor arbitration. The ‘Separability’ asserts that the court has no power to enter into a dispute to arbitration if the parties have not created an enforceable contract (Reilly, 2002)..  Under NLRA, employees have the power to give arbitration of grievances.  FAA also makes arbitration agreements to become enforceable  

The company should also understand views of general public arbitration.  Federal Commission has negative views about this agreement and the agency has done an extensive research which concludes that mandatory arbitration agreement should not be enforced (Seminar et al, 2008). The Commission allows employees to bind arbitration and to choose other alternative methods.  According to NLRB, mandatory arbitration agreement has unfair labor practices and such practices will cost charges under NLRA. Legislative response clearly shows that the congress members are against the mandatory arbitration agreements arguing that the practice has no legal standards. The general public perceive the agreement as unfair because they belief that employees do not understand the law and legal rights (Seminar et al, 2008).  Majority does not recognize the procedure ramifications and as a result they are not able to strengthen their claims. Due to lack of knowledge in procedural protection, employees do not recognize the substantive protection afforded by law.  In analyzing the negative views of the general public, the company should understand that misconceptions about the arbitration law (Seminar et al, 2008). Due to lack of understanding about the law, arbitration produces cognitive bias and employees’ causes severe errors as well as judgment inconsistencies. In this case, employees underestimate risk since they do not understand the real probability of undesirable events. It is important for the company to consider the view in relation with condition of employment. Majority are likely to terminate the employment due to arbitration (Seminar et al, 2008). Since there is no negotiation, the company will incur the cost when trying to gain favorable terms.  In arbitration agreement, there is unequal bargaining of power and this makes it hard to implement voluntary consent standard.

 

 In legal precedent, arbitrators select and interpret the rule. In international arbitration, arbitrators concentrate on national laws principles in preventing the binding of previous legal principles to be used in other disputes.  The International Court of Justice makes sure that rules are followed and there is ‘consistency of jurisprudence’ (Guillaume, 2011). It ensures this by emphasizing on ‘settled jurisprudence’. This means that all cases are valued differently and court ensures jurisprudence precedence and precedence departure. In international arbitration, the decision made for cases have quality variability and the tribunals lack the chance to render previous decisions. Majority of members in international tribunals delegate the interstate arbitration and they remain faithfully with precedent (Guillaume, 2011). In commercial disputes, there are arbitral awards which private companies offer.  In this case, arbitrator ensures that there is a high level of confidentiality in contractual disputes. The international law of arbitration puts much concern on procedural matters in arriving at legal conclusion. The law puts concern on internal review and ensures the reassessment of precedent. Given that there is an agreement in the arbitration clause, employees are supposed to fulfill the contract agreement and more important meet the precedent requirement (Guillaume, 2011). To ensure that employees maintain privacy, employers and employees follows the Privacy Act which ensures protection against disclosure. It is important to note that arbitration is confidential in the federal context. The involved parties should comply with Privacy Act rules. In most cases, arbitrators use common rule which helps them to have a reasoning judgment and agreement. To ensure jurisprudence, they ensure clarity, permanence and legal certainty (Guillaume, 2011). Under common, employees cannot disclose information, must follow the normal legal requirements and maintain legal relationship.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reference

 

Cooley, J. W., & Lubet, S. (2003). Arbitration advocacy. Notre Dame, IN: National Institute for

Trial Advocacy.

 

Reilly M. Christine (2002). Achieving Knowing and Voluntary Consent in Pre-Dispute Mandatory

 

Arbitration Agreements at the Contracting Stage of Employment. 90 Cal. L. Rev. 1203

 

Guillaume Gilbert (2011). The Use of Precedent by International Judges and Arbitrators.

 

Journal of International Dispute Settlement, Vol. 2, No. 1

 

 

IAI Seminar, Gaillard, E., Banifatemi, Y., & International Arbitration Institute.

 

(2008). Precedent in international arbitration. Huntington, N.Y: Juris Publishing, Inc.