Comments on: Another unfortunate arbitration agreement

By: Supreme Court - union can agree that ADEA claims must be arbitrated

Supreme Court - union can agree that ADEA claims must be arbitrated — Mon, 20 Apr 2009 06:21:13 +0000

[...] The Supreme Court ruled 5 to 4. A collective-bargaining agreement can require union members to arbitrate age-discrimination claims. That is, the claim will be arbitrated and cannot be brought in court. This is bad for older workers because arbitration is a poor forum for employees. For example, there is no jury in an arbitration. (For a discussion about how bad arbitration is even between businesses see the recent blog post, on a law site, Another Unfortunate Arbitration Agreement.) [...]

By: Karen Thompson

Karen Thompson — Tue, 24 Mar 2009 16:08:14 +0000

It is a challenge to find arbitrators who are familiar with the Oregon Rules of Civil Procedure. Although the arbitrator may be an expert in the subject matter, say real estate, he will have no concept of the law or its application when faced with a motion to amend the complaint to allege punitive damages.

There is also a fraternity among the tall glass tower law firms. Woe to the solo practitioner who arbitrates a case against a big firm attorney with another big firm attorney.

In addition, the arbitrator is likely to favor the big firm attorney because the big firm is going to bring in more return business than the solo practitioner.

By: Travis Mayor

Travis Mayor — Mon, 23 Mar 2009 23:20:35 +0000

I have a client who was presented with a binding arbitration agreement upon her promotion and asked to sign it. The agreement provides for each side to pay for their attorney fees. My client was wrongfully terminated in violation for her rights under Title VII and ORS 659A.030, which provide for attorney fees if she prevails. If the employer is able to enforce the arbitration agreement, my client will have lost a remedy under the laws applicable to gender discrimination. Yet another example of an unfortunate arbitration agreement.

By: Robert Nunn

Robert Nunn — Mon, 23 Mar 2009 22:45:52 +0000

Interesting case. In fairness, the plaintiff was required to pay only half of the estimated fees, but “only” $110,000 would still close out most litigants.

Still, there are good reasons for arbitration, especially in international contracts. Chief among them is avoiding the difficulty of enforcing judgments across jurisdictional lines. Enforcement of arbitration awards are generally benefited by the United Nations Commission on International Trade Law (UNCITRAL) and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. A good discussion of the benefits of arbitration in international transactions is “Getting to Yes Abroad, http://www.abanet.org/buslaw/blt/2007-03-04/meredith.shtml.

However, this case looks like a pretty good reason to avoid ICC arbitration if another arbitration agency is available.