Uncivil unrest

During the past couple of months, when I have traveled outside of Wisconsin or talked to colleagues and friends outside of the state, I have been asked what is going on here. With protests in Madison, the Packers winning the Superbowl, True Grit in the movie theaters and Hair on stage, I think it is 1968 all over again. But a New York Times Op-ed piece yesterday reminded me that it might be more like 1954 when attorney Joseph Welch asked Senator Joe McCarthy “Have you no sense of decency, sir, at long last?” McCarthy, then the junior senator from Wisconsin, exhibited the same aggressiveness, self-certainty, and indifference to contrary views that Wisconsin’s new governor, Scott Walker, seems to be employing in his first few months in office. And with Walker’s public opionion poll support slipping while his fellow Republicans in the state senate are facing the possibility of recall elections, the final results may be similar.

Lawyers, through their bar associations, have been discussing ways to combat and reduce incivility in our profession for many years. The broader business community and society in general now seem to be looking for ways to do the same thing. The legal profession is built on an adversarial model, where aggressive investigation, prosecution, cross-examination and defense tactics are the norm. Even in alternative dispute resolution proceedings, we see attorneys zealously representing their clients’ interests to the exclusion of competing interests. But in the legal arena, there is some kind of referee—be it a mediator, arbitrator or judge—to oversee the combat and keep the parties in line. In the political arena, no one seems to be in charge. And the U.S. Supreme Court has recently held that the First Amendment protects people’s rights to be indecent and uncivil in their public discourse. In Snyder v. Phelps, the Court said that because religious picketers near military funerals expressed their views at a public place on a matter of public concern, their speech was entitled to “special protection” under the First Amendment. But that protection extends to legal action in the courts of law. In the court of public opinion, I suspect that the Westboro Baptist Church is making very few friends.

Likewise, in civil litigation and disputes, one must ask how successful incivility and indecent tactics are. Governor Walker succeeded in getting the legislature to pass his bill restricting public employee collective bargaining. But the legislation is now tied up in the courts and the Republican majority in the state legislature could be challenged at the polls much sooner than expected. If the legal or political challenges succeed, they might provide the kind of reality check that attorney Welch delivered in 1954. Proving once again that what goes around, comes around.

A bad example

I have referred to the health care reform debate several times in this blog.  But it occurs to me now that it is a bad example of dispute resolution or mediation.  It has been a year since Michael Scherer called Barak Obama the “mediator-in-chief” in an article in Time magazine.  Despite the President’s considerable mediation talents, the negotiations seem to be going nowhere.  The reason, it seems to me, is that no one is considering the alternatives to a negotiated agreement.  Mediators are trained to get the participants to look at their best and worst alternatives (BATNA and WATNA).  But Congress does not seem to be doing that.  Why?  Because there is no sword of Damocles, no trial date, nor any deus ex machina that will resolve the issue one way or the other if the parties do not do it themselves.  Without such a final win-lose end game, the parties merely stick to their positions, waiting for the other side to blink.

So until someone figures out how to impose such an end game, I am going to quit referring to the health care reform debate as an example of mediation.  You cannot have alternative dispute resolution without alternatives.  Until someone figures out what those are, it is all politics. And that is very different.

Primary dispute resolution

At a recent seminar that I conducted, I asked the participants what their biggest obstacle was in resolving disputes.  They quickly identified the primary reason, borrowing a line from the movie “Cool Hand Luke”: Failure to communicate.  So I asked them what the best way to solve that problem was.  Did they say file a lawsuit?  Of course not.  Better communication is the primary solution.  Litigation is the last resort. 

Why then are mediation and arbitration called “alternate dispute resolution”?  The vast majority of disputes that give rise to lawsuits are settled short of trial, either by direct negotiation or by mediation.  So in what sense of the word are mediation and arbitration “alternates”?  It is time we start a movement to call them what they really are — the primary means of dispute resolution.  Who wants to join me in referring to mediation and arbitration as primary dispute resolution from now on?

Alternative Dispute Aggravation

Mediation and arbitration are often referred to as alternative dispute resolution.  But here is an arbitration case that could be called alternative dispute aggravation.  It should be filed under “Be careful what you wish for; you may get it.”  A company hired a female lawyer as its in-house counsel.  When she complained that she was being paid less than a male subordinate, in violation of the Equal Pay Act and Title VII of the Civil Rights Act, the company fired her.  The parties agreed to binding arbitration.  The arbitrators awarded the lawyer $1.7 million and ordered reinstatement, despite the lawyer’s admission that she did not want to be reinstated.  The employer appealed, but the trial court and court of appeals affirmed.  The case is now on appeal to the Wisconsin Supreme Court.  The employer is arguing that the award exceeds the arbitrators’ authority under the parties’ agreement to arbitrate, and it violates the company’s state constitutional right to be represented by a lawyer of its own choosing.

Regardless of how the Wisconsin Supreme Court decides this case, someone should ask why these parties chose binding arbitration?  One of my earliest posts is titled “To Mediate or to arbitrate?”  I suggested that arbitration is a win-lose proposition while mediation can lead to a win-win solution.  In this case, arbitration might result in a lose-lose proposition.  If the award is upheld and the employer allows the lawyer to come back to work, but the lawyer refuses to do so, must she give up the monetary award as well?  Both parties made it abundantly clear that they don’t like each other.  Will the Court really give them the benefit of their bargain by enforcing a shotgun wedding?  In any event, this arbitration has not proven to be an economical and confidential alternative to litigation.  The parties arbitrated and are now engaged in very public litigation.  Was there no mediator available to save these people from themselves?

Caveat arbitrator

The recent settlement of the Minnesota Attorney General’s lawsuit against National Arbitration Forum (NAF) was a welcome development for consumers.  Minnesota alleged that the company—which had been named as the arbitrator of consumer disputes in tens of millions of credit card agreements—hid from the public its extensive ties to the collection industry.  Under the settlement, NAF must stop accepting any new consumer arbitrations and will permanently stop administering arbitrations involving consumer debt, including credit cards, consumer loans, telecommunications, utilities, health care, and consumer leases.  Mandatory pre-dispute consumer arbitration clauses have been suspect for many years because the clauses have been hidden in fine print and the parties’ bargaining power is extremely unequal.  The American Arbitration Association has developed Consumer Due Process Protocols in order to determine which alternate dispute resolution (ADR) mechanisms were fair and which were not.  Arbitrators and mediators should be required to be familiar with these protocols.  The Seventh Amendment to the United States Constitution guarantees the right to a trial by jury in civil cases, when more than $25 is in dispute.  This right can be waived, but like any other waiver, it should be done only after fully informed and voluntary consideration of the costs and benefits.  ADR can be faster and less costly than litigation, but we already pay for judges and the courts through our taxes.  Before giving up such a valuable right, consumers should be fully advised.  They may be giving up not only their right to be heard by a jury of their peers, but also the right to an appeal.  They may also be taking on costs that they are not prepared to pay.  And sometimes confidentiality is not desirable.  If one consumer has been harmed by an illegal financing scheme, it is likely that others have been similarly harmed.  If such disputes are kept out of public courtrooms, other consumers may not become aware of the problem.  There is also the issue of independence, which was the problem with NAF.  When deciding whether an arbitrator or mediator is truly neutral and independent, follow the money.  Where do their fees and referrals come from?  Everyone knows how judges and jurors are paid (poorly!).  Make sure you know how your mediator or arbitrator makes a living.