by Jeremy Clare The United States District Court for the Middle District of Pennsylvania denied a motion for reconsideration of the court’s order compelling arbitration because plaintiffs failed to establish a change in controlling law. Background In Brown v. Trueblue, Inc., No. 10-CV-0514 (M.D. PA April 16, 2012), Stephen Brown and Matthew Jury (“plaintiffs”), two employees of Trueblue, a temporary staffing agency, filed a complaint with the district court alleging that Trueblue’s payment system violated the Pennsylvania Minimum Wage Act, the Pennsylvania Wage Payment and Collection Law, and the Fair Labor Standards Act. Trueblue filed a motion to compel arbitration based on the arbitration agreements found in the plaintiffs’ employment agreement with Trueblue. The court granted Trueblue’s motion. The plaintiffs filed a motion for reconsideration of the court’s order to compel arbitration, or in the alternative, a motion for interlocutory appeal. District Court The plaintiffs filed a motion for reconsideration based on the National Labor Relations Board’s (“NLRB”) ruling In re D.R. Horton, Inc., in which the NLRB interpreted the effect of the Supreme Court’s ruling in AT&T Mobility v. Concepcion. In D.R. Horton, the NLRB held that “employers may not compel employees to waive their [National Labor Relations Act] (“NLRA”) right to collectively pursue litigation of employment claims in all forums, arbitral and judicial.” The plaintiffs argued that because the arbitration agreements prohibited classwide arbitration, they violated the new holding in D.R. Horton. The court first reviewed its order to compel arbitration to determine if any error occurred. Supported by Quilloin v. Tenet HealthSystem Philadelphia, Inc., a recent US Court of Appeals for the Third Circuit decision that considered the identical issue initially raised by the plaintiffs, the court found no error in its initial decision to compel arbitration. In Quilloin, the Third Circuit reversed a district court’s ruling to deny a motion to compel arbitration. The Third Circuit reasoned that Concepcion provided a new controlling precedent on the issue. The district court then considered whether the plaintiffs presented adequate justification for reconsideration of the motion to compel arbitration. The plaintiffs argued that the arbitration agreement was void pursuant to D.R. Horton. First, the court found that the plaintiffs’ arguments were not timely raised. The plaintiffs contended that they could not have raised the arguments when the court was addressing the motion to compel arbitration because D.R. Horton had not been decided at the time and that D.R. Horton represents a change in controlling law. However, the court noted that D.R. Horton cannot be interpreted as a change in controlling law. Instead, the court concluded that it is merely an interpretation of Concepcion, already controlling precedent, which the plaintiffs could have presented before their motion for reconsideration. If D.R. Horton was interpreted as a change in controlling law and conflicted with Concepcion’s interpretation of the Federal Arbitration Act, the court would have rejected the decision in D.R. Horton as conflicting with Supreme Court precedent. Therefore, the plaintiffs could have presented such an interpretation of controlling law prior to the motion for reconsideration, and because they did not, the argument was not properly raised in time. The court then determined that even if there were no procedural bar to the motion, it would still fail as a matter of law. The court noted that D.R. Horton is a decision regarding Sections 7 and 8 or the NLRA. The court found that it did not have jurisdiction to decide the issue because the plaintiffs’ argument for reconsideration is based on the NLRA and courts must defer such decisions to the NLRB. The court also determined that even if it did have jurisdiction over the issue, D.R. Horton would not bar arbitration in this case because D.R. Horton is narrower than the plaintiffs argued. Because the arbitration agreements at issue prohibited classwide arbitration, but not all class or collective actions, the court reasoned that they were consistent with the holding in D.R. Horton. In the alternative, the plaintiffs sought an interlocutory appeal of the order compelling arbitration. Citing 28 U.S.C. § 1292(b), the court concluded that the plaintiffs’ arguments did not warrant an order for interlocutory appeal. Section 1292(b) lays out three prongs which the plaintiffs had to meet for an interlocutory appeal: (1) the order must have concerned a controlling question of law; (2) there must have been a substantial ground for difference of opinion; and (3) an immediate appeal from the order would have materially advanced the ultimate termination of the litigation. The court concluded that the plaintiffs’ claims did not meet the latter two prongs. Finally, the court also denied the plaintiffs’ request for additional discovery. The plaintiffs claimed that the costs of individual arbitrations would be prohibitively expensive, but they failed to show any evidence that the costs of arbitration would preclude them from vindicating their statutory rights. Therefore, the court could not justify invalidating the agreements to arbitrate based on those claims. The plaintiffs then asked for additional discovery to show that the arbitrations would be prohibitively expensive. The court concluded that the plaintiffs sought discovery based on mere speculation and that the statutes they based their claims on (the Fair Labor Standards Act, the Pennsylvania Minimum Wage Act, the Pennsylvania Wage Payment and Collection Law, and the Check Casher Licensing Act) all provide for sufficient statutory remedies to ensure that individual arbitrations are not prohibitively expensive. Jeremy Clare is a law clerk at Karl Bayer, Dispute Resolution Expert. Jeremy received his J.D. from the University of Texas School of Law in 2012 and received a B.A. from the University of South Carolina where he studied political science.

Dear Friends and Colleagues, Let me call your attention to an exciting-full day Arbitration seminar to be hosted by Creighton Law School on Friday, October 19, 2012. I anticipate the attendees will be a mixture of practicing advocates as well as practicing arbitrators. Breakfast and lunch will be provided, so the opportunity to network, enjoy camaraderie, and share skills and ideas, will be abundant. The location is, admittedly, Omaha. Here are three things to be said about Omaha: it is centrally located; it has the most user-friendly airport in the world (7 minutes from the Law School); and its pleasant hotels will not make you feel gouged. Three of the five panelists will be traveling from elsewhere to be part of this. For those interested in a rewarding “two-fer,” one of the panelists, Richard (“Collin”) Mangrum, author of Mangrum on Evidence, and the finest trainer on the topic of expert testimony presentation in the nation, will be doing an all-day seminar on that topic the previous day — October 18. His expected turn-out: about 100. Please pass on the word to any who may be interested. I look forward to your coming. Best regards,   Jay McCauley   John (Jay) McCauley, Esq., is a Resident Professor and Chair of the Arbitration Program at The Werner Institute at Creighton Law School. He has been a commercial arbitrator with the American Arbitration Association since 1998, where he serves on the Large Complex Case and Employment Panels. He has been appointed as an arbitrator in more than 130 cases, including multiple cases whose amount in controversy ranges from tens of millions to hundreds of millions of dollars in dispute, and whose parties are represented by leading advocates throughout the nation. Jay is an honors graduate of Harvard Law School, a former litigation partner of a large, Los Angeles based, international law firm, a Distinguished Fellow of the International Academy of Mediators, and a Fellow of the College of Commercial Arbitrators. He is on the editorial staff for the “Arbitration Hearing” chapter of the third edition of the College of Commercial Arbitrators Guide to Best Practices in Arbitration. He has been continuously listed for the past six years as a Southern California Super Lawyer and has been included The Best Lawyers in America for the field of ADR for several years. As an arbitrator, he follows the practice of adhering even-handedly to the ethos of the Rule of Law, in the more congenial and “user friendly” atmosphere of the arbitration hearing.

by Holly Hayes Conflict in health care differs from conflict in other arenas because it can result in significant negative outcomes – in some cases, life or death. Part IV in our series on applying conflict resolution skills in the health care setting follows the Principled Negotiation techniques described by Roger Fisher and William Ury in Getting to Yes with a focus on “inventing options for mutual gain”. Part I in the series can be viewed (here), Part II, (here) and Part III (here). Why do we want to take the time to invent options when we disagree? Often conflict appears to have only one solution – split the pie in half — and people usually believe they know the correct answer – their answer is the right answer. Four major obstacles typically inhibit the invention of more than one option for consideration in a negotiation: Premature judgment Searching for a single answer The assumption of a fixed pie Thinking that solving the problem is “the other party’s problem” We can imagine a typical health care conflict between the Emergency Department (ED) Manager and the Manager of Environmental Services (Housekeeping) in a hospital could look like this: Emergency Department (ED) Manager: I am glad you agreed to talk with me about the housekeeping problem we have had in the ED. I think you know that I am short staffed right now and my staff cannot keep up with the minor cleaning after a patient discharge we have been doing up to now. I need your staff to take over all of the cleaning in the department. We have to take care of the sickest, most urgent patients in the hospital. Manager of Environmental Services: Well, I understand you are busy, but my department hasn’t added any new staff, why do you think we could pick up the slack for your staff? ED Manager: Well, let’s just split the jobs then, you do half of the work and we will do our best to do the other half of the cleaning. Manager of Environmental Services: I guess we can try to make that work. The managers did not “expand the pie” before dividing it – they did not invent options for mutual gain before reaching a solution. Let’s look at some other approaches where the managers take the time to invent creative options: Separate the act of developing options from the act of judging the options – brainstorming is a fairly common exercise where parties produce as many ideas as possible without considering their merit until a complete list is made. Broaden the options rather than looking for a single answer – one example of this is to invent options of different strengths, some weaker options, some stronger options for consideration; another example is to look through the eyes of someone else, for example, look at the problem through the eyes of the patient or a family member, what options would they suggest? Search for options that present opportunity for mutual gain – the secret here is to look for joint gain rather than a winner and a loser by identifying shared interests or dovetailing differing interests. Invent ways to make decisions easy for the other party – a painless choice for the other side that advances your interests is a win-win for both parties. Let’s try the conversation with the two department managers applying the techniques above. Emergency Department (ED) Manager: I am glad you agreed to talk with me about the housekeeping problem we have had in the ED. I think you know that I am short staffed right now and my staff cannot keep up with the minor cleaning after a patient discharge we have been doing up to now. We have to take care of the sickest, most urgent patients in the hospital. What do you suggest? Manager of Environmental Services: That is a problem. I wonder if our departments could split the cost of a temporary staff member to help in the short-term? Emergency Department (ED) Manager: That’s a thought. What if we spent some time streamlining the cleaning process to make the best use of the staff’s time. Your department must have a lot of ideas you could share with us. Manager of Environmental Services: We do have some ideas that have worked in other departments that could be applied here as well. Let’s form a group of your staff and my staff to look at how we can work together to solve the problem. By working together, the two managers invented options that will likely result in even more options for consideration that will benefit the departments, the hospital and ultimately the patients. The key is taking time to explore those options for mutual gain that advance the interests of both parties. We welcome your comments and invite you to share other examples of conflict in health care.   Holly Hayes is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at: holly@karlbayer.com.

Following are this month’s recent developments in international arbitration law published by the International Law Office (free registration is required to view the articles): Ukraine: Mitigation of damages in arbitration practice: trite law or space for creativity? USA: Court sanctions counsel for frivolous challenge to arbitration award India: Supreme Court restricts domestic court jurisdiction over foreign arbitrations Canada: Choosing a dispute resolution mechanism Stay tuned!