Dispute Resolution on Business Law Assignment

 

 Business Law Assignment

 

Date: February 12, 2018
To: Mrs. Dorothy Lafe, Vice President
cc: Head of Departments
From: Legal Officer, Big Brain
Subject:  Alternative Dispute Resolution or Litigation
 
An arbitration is a dispute resolution, where the disputes are settled between the parties, without being going to the court. But, unlike the Court proceeding the arbitration is a pre- agreed matter, where the parties to it have previously agreed for arbitration as the initial course of action, before going to the Court with the unresolved disputes. So, now the question arises as to whether the company Big Brain, force an employee, here Liz Bennett and Ralph Nickleby, to use arbitration for settling an employment-related dispute. But, from the instant facts of case, both Liz Bennett and Ralph Nickleby, were not forced to sign the arbitration clause, instead they were given enough chance to review the agreement and were also allowed to consult an attorney, prior to signing the agreement. 
On the other hand, United States Arbitration Act or the (Federal Arbitration Act- U.S. Code: Title 9 - ARBITRATION, 1925), is applicable for both the state as well as the federal court was held in (Southland Corp v Keating , 1984) and also or those arbitration which involves an interstate commerce, based on the Commerce Clause, but Federal Arbitration Act, is only applicable for the binding arbitration, where there remains no right to appeal on the arbitral award so passed. 
But, an arbitration is often preferred to litigation, due to the fact that it is informal, inexpensive, less time- consuming and most importantly, the parties have the option to structure the process of arbitration and also have the chance to choose the decision maker, which are not at all possible for a litigation, since the litigation is tried by the formal judges and it is both expensive and time consuming and also the fact that the court proceeding go by the statues and rules. So, arbitration is often and aptly preferred than litigation. Supreme Court in (Prima Paint Corp. v Flood & Conklin Mfg. Co., 1967), held that when the parties agreed to arbitrate, then that must be resolved by arbitral tribunal, since a party cannot be said to have been induced by fraud, only to the arbitration clause and not in other contract clause and thus curtails the involvement of Court, and this decision was upheld in ((Buckeye Check Cashing, Inc. v Cardegna, 2006), and Court held that, if an  agreement to resolve disputes through arbitration, is not itself illegal, then for the rest of contract doctrine of severability cannot be applied and so the Court will not intervene and will only be decided by the arbitrator. But, in (Rent-A-Center, West v Jackson, 2010), Court upheld severability and held that arbitrability if any must be decided by the arbitrator. Again, Supreme Court of Missouri in (Baker v. Bristol Care, Inc., 2014), held that, if the arbitration clause unilaterally helps the employers to modify the agreement, then that agreement cannot be enforced by the employer. 
In the present facts of the case, Liz decided to file a lawsuit in state court, but, Ralph, submitted his case to an arbitrator. As of Liz, the company Big Brain, agreed to grant her medical leave due to the complications which arose out of her pregnancy, and then fired her due to reorganization, without opting for the binding arbitration, which was signed between Liz and the company, and nevertheless, Liz was not given a chance to state her case, however, Liz can always go for litigation in line of the decision as was held in  (EEOC v. Waffle House, Inc., 2002), where she can even involve a third party, i.e. Equal Employment Opportunity Commission, i.e. EEOC for suing her employer, since Supreme Court specifically held that, a mere arbitration agreement between an employer and the employee cannot bring down the rights of EEOC. So, Liz can go for litigation, subject to satisfaction that , United States Arbitration Act or the (Federal Arbitration Act- U.S. Code: Title 9 - ARBITRATION, 1925), is only applicable for both the state as well as the federal court was held in (Southland Corp v Keating , 1984) and also or those arbitration which involves an interstate commerce, based on the Commerce Clause, and Federal Arbitration Act (Federal Arbitration Act- U.S. Code: Title 9 - ARBITRATION, 1925), is only applicable for the binding arbitration, where there remains no right to appeal on the arbitral award so passed. As Liz is neither a seaman, nor she is a railroad employee, nor she is that category of worker who is engaged in foreign or interstate commerce, so (Federal Arbitration Act- U.S. Code: Title 9 - ARBITRATION, 1925) is applicable in her case, and she can involve a third party, i.e. Equal Employment Opportunity Commission, EEOC for suing her employer in the Court of Law. Again, Liz sued the employer under (The Family and Medical Leave Act (FMLA), 1993), which allows employee to take 12 workweeks of unpaid leave a year, along with the group health benefits which is to be maintained at the time of leave by the employer and the employee is dutybound to join the job at the end of the leave, but to qualify and make the law applicable for the employee, Liz must show that she was in the company and worked for 1,250 hours in a period of 12 months, but the facts only state that, Liz was in the company for several months before applying for the medical leave, which is unclear, but if we assume that she worked for 1,250 hours in a period of 12 months, then yes (The Family and Medical Leave Act (FMLA), 1993) is applicable for her and she can sue her employer based on that. Again, (California Family Rights Act (CFRA) , 1993)will only be applicable to employers if the employers have 50 or more employees, which is again not clear from the facts of the case, as to how many employees, the employer have, but if we assume that the employer have more than 50 employees, then yes, (California Family Rights Act (CFRA) , 1993) is also applicable for Liz. 
The federal law governing drugs and alcohol use in the workplace is (Drug-Free Workplace Act- 41 U.S. Code § 8102 - Drug-free workplace requirements for Federal contractors, 1988) and states that any employer in receipt of federal grants must be drug-free, otherwise it will lose the federal funding, but do not contain any provisions which specifically allow for workplace drug testing. Again, the regulation under, (Americans with Disabilities Act- Part 35 Nondiscrimination on the Basis of Disability in State and Local Government Services , 1991) and also (Americans with Disabilities Act- Part 36 Nondiscrimination on the Basis of Disability in Public Accommodations and Commercial Facilities, 1991)  classifies drug and alcoholism under protected disability and the (The Family and Medical Leave Act (FMLA), 1993) also have classifications, so Ralph can seek litigation based on the applicability of the laws stated above.
So, for Ralph, the strict conscionability standards, as determined by the 9th Circuit in (Ferguson v. Countrywide Credit Industries, Inc., 2002), and also in (Brennan v. Bally Total Fitness, 2002), and held that the arbitration agreement will be held procedurally unconscionable, if there is a trace of unequal bargaining power. So, the court in lieu of the decision in (Mercuro v. Superior Court, 2002), can held an arbitration agreement, void due to it unconscionability, since the Court at no instance can ask either Liz or Ralph to provide a waiver of their rights for not bringing any legal actions against the employer, was held in (Garfinkel v. Morristown Obstetrics and Gynecological Associates, 2001).
Thus, arbitration is an effective dispute resolution, but the Courts, do require the arbitration agreement to pass the test of substantively and procedurally conscionable with fairness. 1280

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References

(Buckeye Check Cashing, Inc. v Cardegna, 546 U.S. 440, 442 (2006) (US Supreme Court 2006).
Americans with Disabilities Act- Part 35 Nondiscrimination on the Basis of Disability in State and Local Government Services . (1991). Retrieved from https://www.ada.gov/regs2010/titleII_2010/titleII_2010_regulations.htm#a35102
Americans with Disabilities Act- Part 36 Nondiscrimination on the Basis of Disability in Public Accommodations and Commercial Facilities. (1991). Retrieved from https://www.ada.gov/regs2010/titleIII_2010/titleIII_2010_regulations.htm
Baker v. Bristol Care, Inc., SC 93451, 2014 WL 4086378 (Supreme Court of Missouri 2014).
Brennan v. Bally Total Fitness, 198 F. Supp.2d 377 (S.D.N.Y. 2002) (U.S. District Court for the Southern District of New York 2002).
California Family Rights Act (CFRA) . (1993). Retrieved from https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=GOV§ionNum=12945.2
Drug-Free Workplace Act- 41 U.S. Code § 8102 - Drug-free workplace requirements for Federal contractors. (1988). Retrieved from https://www.law.cornell.edu/uscode/text/41/8102
EEOC v. Waffle House, Inc., 534 U.S. 279 (2002) (UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT 2002).
Federal Arbitration Act- U.S. Code: Title 9 - ARBITRATION. (1925). Retrieved from https://www.law.cornell.edu/uscode/text/9
Ferguson v. Countrywide Credit Industries, Inc., 298 F.3d 778 (9th Cir. 2002) (US Court of Appeals for the Ninth Circuit 2002).
Garfinkel v. Morristown Obstetrics and Gynecological Associates, 168 N.J. 129 (2001) (New Jersey Superior Court, Appellate Division 2001).
Mercuro v. Superior Court, 116 Cal. Rptr.2d 671 (2002) (California Court of Appeal 2002).
Prima Paint Corp. v Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) (U.S. Supreme Court 1967).
Rent-A-Center, West v Jackson, 130 S. Ct. 2772, 2779 (2010) (US Supreme Court 2010).
Southland Corp v Keating , 465 U.S. 1 (1984) (US Supreme Court 1984).
The Family and Medical Leave Act (FMLA). (1993). Retrieved from https://www.dol.gov/whd/fmla/

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