The November 2009/January 2010 edition of the Dispute Resolution Journal features “Decisional Errors: Why We Make Them and How to Address Them” written by Disputing‘s contributor Don Philbin. Find Don’s excellent article here. On a related note, Don has recently started sharing his well-known Tweets at his new blog ADR Highlight Reel. Check it out!

by Holly Hayes Health care leaders have known for years that disruptive behaviors are a serious problem. Verbal outbursts, refusing to take part in assigned duties and condescending attitudes all create breakdowns in the teamwork, collaboration and communication needed to deliver patient care. A study by The Institute for Safe Medication Practices (ISMP) found that 40 percent of clinicians have remained passive or kept quiet during patient care events rather than confront a known intimidator. In May, we reviewed an accreditation standard (LD.01.03.01) issued by The Joint Commission in January expected to prompt hospitals to explore an expanded use of mediation to manage conflict in the healthcare setting. Conflict Management Standard LD.01.03.01 states, “The governing body is ultimately accountable for the safety and quality of care, treatment, and services.” Elements of Performance, or how The Joint Commission will score the standard, include: Development of a code of conduct that defines acceptable, disruptive, and inappropriate behaviors; and creation and implementation of a process for managing disruptive and inappropriate behaviors. In an effort to put an end to disruptive behaviors among healthcare providers, the Joint Commission recommends that health care organizations take 11 specific steps, including the following: Educate all health care team members about professional behavior Hold all team members accountable for modeling desirable behaviors, and enforce the code of conduct consistently and equitably; Establish a comprehensive approach to addressing intimidating and disruptive behaviors that includes a zero tolerance policy; strong involvement and support from physician leadership; reducing fears of retribution against those who report intimidating and disruptive behaviors; empathizing with and apologizing to patients and families who are involved in or witness intimidating or disruptive behaviors; Develop a system to detect and receive reports of unprofessional behavior, and use non-confrontational interaction strategies to address intimidating and disruptive behaviors within the context of an organizational commitment to the health and well-being of all staff and patients. A survey conducted by the American College of Physician Executives published in November, almost one year after the Joint Commission began requiring health care facilities to implement zero-tolerance policies for disruptive behaviors, tells us there is still work to be done in this area. According to anonymous responses to a national survey of 13,000 physician and nurse executives, ninety-seven percent experienced unprofessional outbursts and overreactions, with the majority saying these happened several times a year and sometimes weekly. Physician and nurse executives respondants solutions to decreasing disruptive behavior included: setting clear expectations, implementing consistent enforcement and focusing on teamwork. Mediation is one non-confrontational interaction strategy that can be implemented to resolve conflict, improve the working relationships of the parties involved and enhance teamwork and patient safety. Technorati Tags: Healthcare, ADR, law, mediation 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.

by F. Peter Phillips This post continues Part I. As drafted, the Arbitration Fairness Act of 2009 (House Bill 1020) would amend Section 2(b) of the FAA to render invalid any pre-dispute arbitration agreement that purports to require arbitration of “an employment, consumer, or franchise dispute.” (“Franchise dispute?” How did that get in there? I would have thought that, subject to FTC regulation and state disclosure requirements, franchise is a pretty straightforward commercial relationship, eminently suitable to arbitration. But, hey, what do I know?) Additionally, the Arbitration Fairness Act would amend Section 2(c) of the FAA to provide that “the validity or enforceability of an agreement to arbitrate [ — not just agreements concerning employment or consumer or franchise disputes — any agreement to arbitrate –] shall be determined by the court, rather than the arbitrator.” This mischievous piece of ineptitude, while presumably aimed at ensuring the invalidity of employment and consumer arbitration “agreements,” undermines the established principles of severability and kompetenz-kompetenz that form the bedrock of international commercial arbitration, and threatens to wreak havoc with international arbitrations whose situs is within the United States. Any commercial party seeking to evade its arbitration obligations need only recite that the agreement concerns employees or consumers or franchises, and the matter automatically goes to the place most international businesspeople consider the darkest pits of hell – an American courtroom. The proposed bill would outlaw all employment arbitration agreements — including agreements contained in contracts negotiated at arm’s-length by senior executives represented by sophisticated counsel. It would ban any arbitration whatsoever, irrespective of the design of the process to ensure procedural fairness. And it seems to be based on the entirely specious assumption that individual employees, the court system, and society at large would be advantaged if the only way aggrieved employees could be vindicated was by suing their employers. (See inferno, above.) The FAA being gutted, the courts being swamped, the bedrock principles of international commercial arbitration being negated, the status of the United States as a reliable situs for international commercial dispute resolution being impugned – all of these evils I lay at the feet of pre-dispute mandatory employment arbitration and the broad indignation that it prompts. Going back to my original anecdote, my concern isn’t for the boulder – it’s for the chisel! The ABA has denounced the proposed legislation, reasoning that “the unintended consequences of arbitration legislation and regulation could materially alter the established legal landscape for international arbitration with respect to the validity of pre-dispute arbitration agreements in a broad range of cases and to the division of authority between the courts and the arbitrators. These changes will have major ramifications for international commercial arbitration in the U.S. and for U.S. businesses in the global marketplace.” Arbitration is a valuable — indeed irreplaceable — tool for managing mercantile transactions. It is time to acknowledge that it has been misused to manage non-commercial relationships. It matters not at all that the Supreme Court permits employment arbitration — short-sighted companies are permitted to do any number of dumb things, including whacking a 300-lb boulder with a wood chisel. The lawyers’ operation may have been a success. But the patient is dying. For recent evidence, note that on December 19, 2009 President Obama signed into law an Act authorizing defense spending. Included in the bill was a provision authored by Senator Al Franken (D-Minn.), prohibiting defense contractors receiving more than one million dollars from entering into any arbitration agreements with employees purporting to require private arbitration of claims arising from Title VII of the Civil Rights Act of 1964. Senator Franken had previously held hearings on this issue, featuring (among others) Jamie Leigh Jones, the former Halliburton employee who was forced to arbitrate a claim of sexual assault, and employment attorney Mark A. deBernardo. Not a great ad for the arbitration process. Here is part of the text of Section 8116 of the Act: SEC. 8116. (a) None of the funds appropriated or otherwise made available by this Act may be expended for any Federal contract for an amount in excess of $1,000,000 that is awarded more than 60 days after the effective date of this Act, unless the contractor agrees not to: (1) enter into any agreement with any of its employees or independent contractors that requires, as a condition of employment, that the employee or independent contractor agree to resolve through arbitration any claim under title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention; or (2) take any action to enforce any provision of an existing agreement with an employee or independent contractor that mandates that the employee or independent contractor resolve through arbitration any claim under title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention. (b) None of the funds appropriated or otherwise made available by this Act may be expended or any Federal contract awarded more than 180 days after the effective date of this Act unless the contractor certifies that it requires each covered subcontractor to agree not to enter into, and not to take any action to enforce any provision of, any agreement as described in paragraphs (1) and (2) of subsection (a), with respect to any employee or independent contractor performing work related to such subcontract. For purposes of this subsection, a ‘‘covered subcontractor’’ is an entity that has a subcontract in excess of $1,000,000 on a contract subject to subsection (a). Are we going to keep doing this until we utterly ruin the practice of arbitration? Institutions are socially accountable, either in the near term or the long term. If employers keep doing stupid stuff, and if lawyers keep helping them do it, […]

by F. Peter Phillips One hot, lonely summer day in 1958, at our rural home near Crozet, Virginia, I was working on an 8-year old’s project: dislodging a big quartz rock that was buried in the gravel driveway. After a few hours I realized the trowel just wouldn’t do the job. So I found a wood chisel in my Dad’s tool chest. “Ah-ha!” I thought, “This is just the thing! I’ll reduce it to bits and dislodge it a chunk at a time!” By the time Dad got back from work at 5:30 or so the quartz had not been reduced by much, but the wood chisel had lost about all of its utility. I had used the wrong tool for the job. Which (obviously) gets us to the Arbitration Fairness Act of 2009. Some people date commercial arbitration from the time of the Greeks and even before. In Arbitration and Mediation in International Business (Kluwer 2006), Christian Buhring-Uhle says that “[c]ommercial arbitration is probably as old as commerce itself.” (p. 31) Certainly by the time of the Renaissance, it was an established attribute of international trade. Its attractions to the contemporary international merchant are all the more pronounced as commercial litigation becomes more bemired in discovery rules, burdensome cost, commercially unacceptable delay, unwelcome publicity and uncertainties of enforcement. The heart of commercial arbitration, to me, is captured in an apocryphal anecdote: In 1350, on a wharf in Venice, a purchaser questions whether the bale of cotton he is offered is of the same quality as the cotton he had ordered. He needs to buy and the seller needs to sell, so rather than the deal’s collapsing they agree to call over a cotton merchant of many years’ experience who sticks his hand into the bale, fingers it, and declares it’s Grade B. The price is adjusted and the matter is resolved by means of a process whose authority no one doubts, whose alacrity everyone extols, and whose commercial reasonableness no one questions. What happens when this excellent tool is misapplied to other kinds of disputes – ones that don’t involve the grade of goods sold, and don’t even involve quarreling merchants? The cotton merchant did not decide the fate of the young urchin who was caught stealing someone’s purse on the wharf. That process is not designed to reach a commercially rational outcome, but rather to enforce certain standards and expectations set by the state. Which gets us to the unease many feel about arbitration of employment-related claims. Claims raised by an individual employee have at least three attributes that make them a poor “fit” with arbitration: First, the individual employee seldom has bargained for arbitration as the method of resolving workplace-related disputes. The justification of employment arbitration is almost never that the employee asks for it — it is that the employer imposes it as a condition of employment and the employee accedes to that requirement in order to accept the offer of employment. Second, the imbalance of resources and sophistication between employers and employees is usually far more pronounced than the imbalance between two merchants. A merchant’s contract addresses what happens if one party breaches. An employee seldom determines whether to accept a job upon a deliberative assessment of a risk of violation of statutory protections. Third, merchants arbitrate their own financial interests. By contrast, employee claims very frequently involve a statutory “right” that persists independently of any contract and that reflects a public, not a private, covenant. What do you think will happen when someone is told that her statutory rights will not be heard in court but rather by a private judge, whose decision is binding even if mistaken in fact and law, with no way to correct the error? And that the employer hires this judge all the time? And that if she doesn’t agree to this process she’ll be fired, or not hired? What happens is, employment arbitration is challenged. And right away we stop managing the workplace — we start to lawyer-ize the workplace. We figure out ways that final and binding employment arbitration can withstand challenge, through Supreme Court opinions and Due Process Protocols and enlightened arbitration providers and so on. And sure enough, if you lawyer this thing up enough, pre-dispute employment arbitration programs can be tweaked to survive most judicial challenge. But is this what rational business managers want? Is the best we can do, to have dispute resolution processes “survive most judicial challenge”? More to the point, is this what we wanted for arbitration? The Federal Arbitration Act and the New York Convention are purposely designed to eliminate almost every basis for judicial challenge of an arbitration award and — on the contrary — to ensure the enforceability of arbitration awards on a global scale. Arbitration is freely selected in open negotiation between merchants on the understanding that, yes, maybe today the arbitrator will make a mistake that hurts you, but tomorrow she may make a mistake that helps you, and in any event over time she usually doesn’t make many mistakes. That is, commercial arbitration has advantages when compared to commercial litigation. But it addresses rights that arise from a commercial contract that was negotiated by the parties, not rights that arise from a statute that was enacted by the United States Congress. There comes a point when the enforceability of pre-dispute employment arbitration “agreements” ceases to be the point — the distrust and suspicion and resentment that the practice creates makes it bad business. Much more troublesome, however, the resentment that builds from legal, but stupid, employee arbitration schemes threatens to hurt arbitration itself, right where it matters — in merchant-to merchant, international business. And, as promised, this gets us to the Arbitration Fairness Act, to be discussed tomorrow in Part II of this post. Technorati Tags: law, ADR, arbitration F. Peter Phillips is an arbitrator and mediator practicing in the New York City area. He teaches ADR and International Commercial Dispute Resolution at New York […]