Pros And Cons Of Binding Arbitration Clauses

Although the arbitrator’s final awards are legally binding, an unhappy party of arbitration may still go to court under certain circumstances.  As mentioned by Fallon & McConnell, “unless one party protests that there was a gross injustice, collusion, or fraud, arbitration that is specified by a contract can be converted into a legal judgment.  This requires a petition to the appropriate court” (n.d., p. 388).  As expected, this can become costly for the person who is seeking to appeal.

Many providers of financial services--especially alternative financing--attempt to limit class-action lawsuits and legal costs with arbitration. Today's crowded courtrooms and high costs of litigation make it more practical to handle many financial issues through arbitration instead of court-based litigation.

As litigation continues to be a time-wasting, costly, distracted, and unsatisfactory practice for dispute resolution, alternative dispute resolution increases in popularity, specifically, mediation and arbitration. Arbitration is a cost efficient substitute to litigation that is the yielding of a dispute to an impartial party in order to receive a final incumbent decision in the form of an award. Arbitration is sensitive, classified, and modeled to be a swift, and inexpensive solution to dispute. Participating parties may include additional terms in the agreement identifying arrangements to their agreements’ arbitration clauses to meet the requirements of their discrete dispute. In summation, arbitration is process that is private, speedy, cost efficient, and customized to the liking of the parties involved.

This Tuesday the Union have voted to go on a strike if a contract deal cannot be reached. 9,000 people overwhelmingly voted for this strike so dozens showed up in front of the Santa Clara County government. The last time a strike was threatened was in 2013, even though the last strike was in 1975. They want their message to get across loud and clear. “we don’t want to end up with a strike” says County Executive Jeff Smith. He then goes to say there’s a good likelihood they won’t end in a strike. (San Jose Mercury News, June 26, 2015)

Arbitration is a method to submit a resolution in an arbitral, rather than a judicial forum. For non-labor issues, arbitration can be a less expensive solution. One example is The Home Owners ' Warranty program. A program which aimed to resolve disputes between homeowners and builders. The program was designed between the Home Owners ' Warranty programs of the National Association of Home Builders. This program started in 1973 as a method of formally resolving disputes through arbitration. The program provided a warranty program, using mediation, and arbitration to resolve differences. Before the warranty program was created, the National Association of Home Builders came to the Federal Mediation and Conciliation Service for advice and assistance on dealing with homeowner disputes. Over the years, the program has expanded across the country through the Magnuson-Moss Bill, assisting the Federal Trade Commission on issuing rules on warranty’s and guaranties. The arbitration occurs while looking at the evidence of a dispute objectively for the best solutions (Barrett, 1985, p. 32).

According to Walsh (2013), “arbitration, is like a neutral third party (the arbitrator) functions more like a private judge. Arbitrators hear disputes and render decisions that are almost, always final and binding on the parties. Arbitration has, for decades, been the principal means of enforcing employee rights under collective bargaining agreements in unionized workplaces.”

The use of mandatory arbitration provisions under California law has been the subject of much debate and litigation in recent years. As applied to employment contracts, these clauses compel employees to waive their rights to a jury trial for a variety of employment-related disputes, including wage violations, wrongful termination and harassment. In larger businesses with many employees, an arbitration provision may also require employees to relinquish the right to initiate a class action lawsuit. But there are limited circumstances where a court may find that an arbitration clause is not enforceable and permit employees to proceed with an action in court. This occurs when the court finds unconscionability in the contract; that is, the terms of the contract are so inequitable and harsh as to render the arbitration invalid.

Arbitration has existed in America for centuries. The Native American Indian tribes were believed to have used arbitral process to settle disputes between the tribe and those outside the tribe. “Long before the white man ever arrived in what is now the United States early Native American tribes used arbitration as not only a means to resolve disputes within the tribe but also as a means to resolve disputes between different tribes”. (laborstudies and research p.2). The concept arbitration with no doubt extended to the America from the European continent, largely from England, after she colonizing America. Arbitration among merchants were common, since it proved more efficient and effective that the courts during that period. The first US

Legally-binding forest agreements have failed due to the inability to reach consensus on a wide range of objectives. Unable to agree on objectives, global forest treaties and negotiations since 1992 have become non-binding with strong opposition. Though hundreds of negotiated proposals have been raised, conflicting negotiations prevent the establishment of agreements due economic concerns and the multiplicity of unclear objectives. Mackenzie suggests that the repeated failure to generate legally-binding agreements by international parties results from issues that are too complex to be resolved by a single instrument (251). As such, there are “18 international treaties which relate to forests” (250), that attempt to address smaller components of these large issues, yet there are none currently in place that are

Arbitration is defined as “the submission of a dispute to one or more impartial persons for a decision, known as an award.1” It is a more effective means of handling disputes in a quick and concise manor. There is much customization available in an arbitration, however, Forced arbitration is a clause primarily used by large companies to speed up disputes and to help keep negative press coverage from effecting their company. Often, we see these clauses in banking agreements, cell phone companies and others corporations that have a very large consumer base.

Despite the harmonious nature of Japanese people, there are still conflicts that cannot be resolved within the enterprise union and the firm. Most of these unresolved conflicts occur because many firms are conducting restructuring and retrenchment during this period of economic uncertainty. When these conflicts happen, they can approach the local government mediation body to help conciliate and make a decision. Most decisions made are generally accepted; however, should the conflicts still exist, they can opt for arbitration in the Labour Tribunal System, or legislation in court. For arbitration, the judges involved are tripartite in nature: 1 professional judge, 1 union representative and 1 employer representative. All 3 judges must have professional knowledge and experience in labour issues, and there are no more than 3 hearings, verdict based on majority. If the verdict is rejected by either party, they may proceed to legislation (Elbo 2004).

For the selected article, it investigates the first contract arbitration’s ability to foster bargaining relationships and discourages any misconduct by analyzing the effect on decertifications (Weinberg, 2015). It has been suggested how the Employee Free Choice Act (EFCA) sought to amend the National Labor Relations Act (NLRA) by introducing various changes which are a card-check system for union certification, first contract arbitration (FCA), and more severe consequences for violations of the Act (Weinberg, 2015). It has been suggested that by allowing access to arbitration selection first contract situations, in which both parties are unable to reach a settlement, this amendment was created to address the difficulties that newly

4) The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate Government the arbitration award signed by the arbitrator or all the arbitrators, as the case may be.

Investment arbitration unlike commercial arbitration does not depend on the arbitration agreement alone. It is based on,

An arbitration clause is a section in a contract that requires the parties to decide their differences over an arbitration process. Though such a clause may or might not agree that arbitration happen inside a specific authority, it always binds the parties to a type of resolution outside of the courts, and is therefore considered a kind of forum selection clause.