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With the U.S. Supreme Court’s decision in Circuit City Stores, Inc. v. Adams, [FOOTNOTE 1] which resulted in applying the Federal Arbitration Act [FOOTNOTE 2] finally and definitively to employment disputes, employment arbitrations have grown exponentially. More than 700 Title VII [FOOTNOTE 3] claims alone are reported in the New York courts since Jan. 1, 2000, not accounting for other statutory and common law arbitration claims. Unions and employers have been arbitrating labor disputes for more than five decades. That is testimony to the wisdom and efficiency of arbitrating workplace disputes. With the growth of arbitration supplanting federal jury trials to resolve nontraditional workplace disputes, coupled with crowded state and federal court dockets, advocates will face experienced arbitration panels rather than a panel of lay jurors. Unlike trial, formalized rules of evidence and the concomitant body of law do not necessarily apply to arbitration. [FOOTNOTE 4] While trial may at times feel like organized chaos, the advocate has federal and state evidence rules, local and individual judges’ rules and forms to refer to for guidance. Arbitration is more fluid and ever developing. Although trials unfold in public courthouses and are recorded on public records, arbitration decisions rarely see the light of day unless one of the parties files a timely motion to seek review of the arbitrators’ award in state or federal court. [FOOTNOTE 5] This article is an attempt to provide a practical blueprint to guide the new arbitration advocate through the maze of employment arbitration. Since arbitration is “trial by ambush,” the key to success in it is to prepare thoroughly. This article is not meant to be all-inclusive, but attempts to offer practical pointers. LAYING THE GROUNDWORK Arbitration is a creature of contract. In the arbitration agreement, parties agree to arbitrate disputes and what issues to arbitrate. [FOOTNOTE 6] Generally, arbitration clauses are all inclusive. Courts both defer to the parties’ agreement to arbitrate and favor arbitration. [FOOTNOTE 7] The presumption is that all issues are subject to arbitration; very little is excluded from an arbitration clause unless the parties expressly exclude certain issues from arbitration and the arbitrator’s authority. [FOOTNOTE 8] The advocate should take care to draft a clear arbitration clause being mindful of what issues are specifically excluded. [FOOTNOTE 9] Unlike most traditional labor arbitration where discovery usually takes place at the hearing in response to judicial subpoenas, employment arbitration demands pre-hearing discovery because the facts are generally in the employer’s possession. Employment disputes are proven directly through anecdotal evidence or indirectly through circumstantial evidence. The arbitration agreement should account for the number and length of depositions, the timing of discovery requests and responses, and the parties who will pay costs, including how the parties will share the arbitrators’ fees. The arbitration clause should set reasonable deadlines for pre-hearing discovery, the hearing and rendering, and confirmation of the award by a court of competent jurisdiction. The policy behind arbitration and the reason for the courts’ preference for arbitration is that arbitration permits the parties to resolve their claims fully, fairly and efficiently without the delay and expense of protracted litigation. [FOOTNOTE 10] SELECTING ARBITRATORS In state and federal courts, judges are generally assigned by the nature of the dispute or by lottery. In arbitration, the advocate is in the enviable position of having some control over who shall decide the dispute. Most arbitration services will maintain paid or pro bono panels. Initially, the advocate should study the arbitration agreement or ADR policy and obtain a copy of the arbitration rules from the arbitration administrator. [FOOTNOTE 11] Generally, the arbitration administrator will provide resumes of arbitrators who handle employment arbitrations. The advocate should pay particular attention to each arbitrator’s employment background because that will provide some insight as to that particular arbitrator’s bias. If the arbitrator has had significant employment representing a particular side it is more likely that his or her bias will be more inclined to the side with which the arbitrator is more familiar. The advocate should research the arbitrator in the state and federal cases and published articles. Published articles might offer some insight as to what piques that arbitrator’s interest. The advocate should also speak to colleagues and other arbitrators to seek out clues as to bias. Arbitrators’ selection is random because generally each side is asked to strike a certain number of arbitrators from the proffered panel list leaving one or three arbitrators to decide the dispute, depending on the arbitration rules. If a number of arbitrators’ selection rounds takes place, the advocate should study the opponent’s bias and make selections that might best result in a panel that is most inclined to the advocate’s point of view. PREPARING THE HEARING NOTEBOOK Since arbitration as a general rule is unstructured, careful and structured preparation is essential. The advocate should prepare three memos that will evolve as investigation of the employment dispute unfolds. Generally arbitrators, like federal and state judges, will convene a conference to schedule discovery, applicable motions and a hearing date. The advocate should attempt to investigate the disputed claim and prepare the following memoranda in anticipation of that conference so as to best judge the timing and extent of pre-hearing discovery and motion practice. Since timing in the arbitration agreement may be short, the advocate should serve the discovery requests, including expert discovery, with the parties’ response to the claim, provided the arbitration rules permit it. An attorney or the arbitrator may issue judicial subpoenas to obtain documents at hearing, [FOOTNOTE 12] but a substantial response or no response without any pre-hearing discovery may prove to be of little use at hearing. Where possible the advocate should secure responses to requests to admit or stipulations from opposing counsel. Crucial to an ultimately successful result, with a value that cannot be underestimated, is the legal memo. The legal memo should be concise, assigning one to two pages for each legal issue and supporting law and leaving space for changes and additions. The threshold issue is the analysis of the applicable arbitration agreement and ADR policy and written agreement (if applicable) under which the dispute arose. Less is more when crafting the legal memo. The advocate will find a five-page memo a far more useful reference tool at hearing than a 50-page memo. If the legal issues cannot be easily summarized in five pages, the theory needs revising. The legal memo will form the basis of offered testimony, dictate which testimony is most persuasive and is the preliminary outline of the legal argument of the post-hearing brief. The advocate may also wish to prepare a time line of events that describes the facts and pertinent witness testimony, particularly referencing each of the elements the advocate seeks to prove. The time line memo is a handy reference tool since it is likely to provide an outline of pertinent testimony and will guide the advocate’s preparation of direct and cross-examinations. The advocate should include offered exhibits and required foundation to admit the exhibits into evidence. Although the panel may not necessarily be required to consider all the important nuances of a particular exhibit that support the advocate’s position, the exhibit will be more persuasive if all of the evidentiary foundational elements are offered and elicited from witnesses. While arbitration hearings are generally informal settings the advocate should prepare and counsel witnesses so they appreciate that this is the parties’ “day in court,” and the hearing should be accorded the appropriate decorum. Typically the arbitrators will set the tone of the hearing. The advocate should prepare a damages memo in which proof and calculation of damages is set forth in detail. The advocate should be prepared to defend the calculation. PRESENTING THE CLAIM In anticipation of the hearing, the advocate may serve a position statement on the panel so that the panel will be well-versed in what the law and testimony will show and the damages sought. Having laid the groundwork by preparing the legal, time line and damages memoranda, the position statement should be a simple reiteration. At hearing, the advocate should have copies of all exhibits for the opposing side and each arbitrator, including stipulated exhibits. Typically the first step in the hearing is to frame the issue, for example, “Did the employer engage in gender discrimination in violation of Title VII when it discharged the employee? What shall the remedy be?” Once an issue is framed, the hearing will begin. The advocate should not leave the rules of evidence in the office. A carefully prepared, cogent presentation that follows the rules of evidence is more persuasive. [FOOTNOTE 13] Although these rules do not necessarily play a formal part in the hearing, depending on the panel, objections may be made and ruled upon. Although the advocate should be cognizant of the experience and education of the panel, no fact, element or supporting document should be taken for granted. [FOOTNOTE 14] At the close of the hearing, the advocate may be faced with the dilemma of presenting a closing that tutors the opponent as to the post-hearing brief or to reserve that argument for the post-hearing brief. That decision is based on the circumstances and mere economics of the case. If the client by the time the hearing is concluded does not desire to expend the cost of a post-hearing brief, after written disclosure, the advocate may offer an oral closing to the panel. An oral closing to the panel may also be more fruitful because the evidence is still fresh in the panel’s mind. Alternatively, a concisely written post-hearing brief with citations to hearing transcripts may be the better approach. In any event, the advocate where possible should guide the panel in preparation of the award and decision. SEEKING REDRESS The hearing has been concluded, testimony has been presented, and the exhibits offered and accepted. Closing arguments may have been offered or reserved for a post-hearing brief, and post-hearing briefs have been submitted. Once the award has been rendered, the advocate’s work is not concluded. Depending on the side, the advocate may need to vacate, clarify, modify or confirm the award. The court’s review of an arbitrator’s award is extremely limited. The court does not desire to substitute its judgment for that of the arbitrator and interfere with the agreed upon alternative dispute resolution process. [FOOTNOTE 15] The court will confirm an arbitrator’s award unless one of the enumerated grounds exists in �� 10 or 11 of the Federal Arbitration Act. [FOOTNOTE 16] An application to vacate or modify must be made within 90 days of delivery. [FOOTNOTE 17] An application to confirm so the award may be reduced to judgment must be filed within one year of delivery. [FOOTNOTE 18] Because the court defers to the arbitrator’s award, the standard to vacate an award is extremely high. An award will be confirmed so long as the arbitrator has not rendered an award that is in manifest disregard of the evidence and the law. The cases appear to say that this standard is met when the applicable legal rule is obvious and capable of being readily and instantly perceived by the average qualified arbitrator who appreciated the existence of the clear governing legal principle but decided to ignore it. [FOOTNOTE 19] Even if the arbitrator does not explain the award, the award will be confirmed if there is even a barely colorable justification for the outcome reached. [FOOTNOTE 20] Although arbitration is a more efficient and compact version of a formal trial, the unstructured form of arbitration demands careful preparation and the work ethic attendant to formal trial preparation. With practice the advocate will become efficient in the arbitration process and arbitration will yield the more cost-efficient and preferable means of resolving disputes. Scott A. Weiss is a partner of Weiss & Weiss, which has offices in New York and Connecticut. He is also a labor and employment arbitrator with the American Dispute Resolution Center in New Britain, Conn. ::::FOOTNOTES:::: FN1 532 U.S. 105, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001). FN2 9 U.S.C. � 1 et. seq. (2003). FN3 42 U.S.C. � 2000e et seq. (2003). FN4 See e.g., GFI Securities LLC v. Labandeira, Slip Op. Civil Action No. 01 Civ. 793 (JFK), 2002 U.S. Dist. LEXIS 4932 (S.D.N.Y. March 26, 2002) pp. 20-21. FN5 The Bureau of National Affairs, Inc. publishes labor arbitrators’ decisions. FN6 See, e.g., CAP Gemini Ernst & Young U.S. L.L.C. v. Nackel, Slip Op. 02 Civ. 6872 (DLC) (S.D.N.Y.), 2002 U.S. LEXIS 22390 (S.D.N.Y. Nov. 21, 2002), pp. 4-6. FN7 Id. FN8 Mahant v. Lehman Brothers, Slip. Op. Civil Action No. 99 Civ. 4421 (MBM) (S.D.N.Y.), 2000 U.S. Dist. LEXIS 16966 (S.D.N.Y. Nov. 22, 2000) (holding that plaintiff failed to prove that her Title VII and New York Human Rights claims were not arbitrable). FN9 Although a little beyond the intended scope of this article, the advocate may be required to petition a court to either stay or compel arbitration. Under the Federal Arbitration Act, in determining a motion to compel, the court must determine (1) whether the parties agreed to arbitrate; (2) the scope of the agreement; (3) if federal statutory claims are asserted, whether Congress intended those claims to be non-arbitrable; and (4) if some but not all claims are arbitrable whether to stay the balance of the proceeding pending arbitration. If all elements are present, arbitration must proceed and the suit must be stayed. See, e.g., Tuskey v. Volt Information Sciences, Inc., Slip Op. Civil Action No. 00 Civ. 7410 (DAB), 2001 U.S. Dist. LEXIS 10980 (S.D.N.Y. Aug. 3, 2001), pp. 5-7 (Title VII claims arbitrable). FN10 Bisnoff v. King, 154 F.Supp. 630, 636 (S.D.N.Y. 2001). FN11 Services like the American Arbitration Association and the New York State Employment Relations Board will provide upon request rules governing the selection of the arbitrator, pre-hearing pleadings, motions, discovery and hearing rules. Some of these rules are available on the Internet, like the AAA’s National Rules for the Resolution of Employment Disputes (including Mediation and Arbitration Rules) (amended and effective Nov. 1, 2002). See also New York Uniform Arbitration Act, N.Y.Civ.Prac.R.& L. � 7501 et seq. (2003) and Federal Arbitration Act, 9 U.S.C. � 1 et seq. (2003). FN12 N.Y.Civ.Prac. R. & L. � 7505 (2003). FN13 Schmerz, Eric, “Evidentiary Considerations” (Washington, D.C.: The Bureau of National Affairs, Inc., American Bar Association, Section of Labor and Employment Law, April 2000), pp. 82-84. For a good discussion of evidence and proof issues, see Elkouri & Elkouri, “How Arbitration Works” (Washington, D.C.: The Bureau of National Affairs, Inc., American Bar Association, Section of Labor and Employment Law, 1997), pp. 403-69. FN14 Ahing v. Lehman Brothers, Inc., Slip Op. Civil Action No. 94 Civ. 9027, 2000 U.S. Dist. LEXIS 5175 (S.D.N.Y. April 20, 2000)(denying plaintiff’s motion to vacate since she failed to provide a complete arbitration record which satisfied her burden of proving that the rendered award was in manifest disregard of the law or evidence). FN15 Footnote 4, supra., pp. 4-6; see also footnote 19 infra. (Acciardo) (where court stated that it is “not empowered to second-guess the arbitrators’ fact-finding or assessment of credibility.”) Findings of fact must be accepted unless clearly erroneous. Id. FN16 Under the FAA, 9 U.S.C. � 10 providing for vacation, those grounds include: that the award was obtained by corruption, fraud or undue means, the arbitrators were evidently partial or corrupt, guilty of misconduct, refused to postpone a hearing, or hear pertinent evidence, engaged in any misbehavior that prejudiced a party, exceeded their powers or so imperfectly executed them that a final award was not made. Under 9 U.S.C. � 11 providing for modification, those grounds include: material miscalculation or mistakes in description of any person, thing or property, awarding a remedy on an issue not submitted to them, or the award in form is imperfect. See also N.Y.Civ.Prac.L.& R. � 7511 (2003). FN17 9 U.S.C. � 12 (2003) and N.Y.Civ. Prac. L. & R. � 7511 (2003). FN18 9 U.S.C. � 9 (2003) and N.Y.Civ.Prac.R.&L. � 7510 (2003). FN19 See e.g., Hardy v. Manning Securities LLC, Slip. Op. Civil Action No. 02 Civ. 1522 (GEL), 2002 U.S. Dist. LEXIS 16589 (S.D.N.Y. Sept. 4, 2002), pp. 12-13. Mere error also does not meet the “manifest disregard” standard. Acciardo v. Millennium Securities Corp., 83 F.Supp.2d 413, 417 (S.D.N.Y. 2000). FN20 Id. If you are interested in submitting an article to law.com, please click here for our submission guidelines.

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