About Us

Victoria Pynchon

As the co-founder of She Negotiates Consulting and Training, I offer my services as a keynote speaker, trainer and consultant....

She Mediates

ADR Services, Inc.

She Negotiates

She Negotiates

The 33 cent wage and income gap is unacceptable and unnecessary. So is the cliché glass ceiling. Bottom line, our...

Let the Kagan Games Begin: Whitepapers from SCOTUS Blog

(pictured:  the bread and circuses part)

Thanks to the SCOTUS Blog for the following resources on the upcoming Kagan hearings.  Follow SCOTUS Blog all week for commentary. 

Why should negotiators be interested in the composition of the Supreme Court?  Because the freedom to negotiate requires a strong rule of law culture.  And because everything we negotiate assumes the enforcement of certain agreements and non-enforcement of others, of particular interest to negotiators and ADR practitioners - arbitration agreements

SCOTUS whitepapers below:

Diversity Hiring


Diversity on the Court

Gays in the Military

Corporate Rights (Citizen's United)


Executive Power

Kagan's Qualifications to Serve





Arbitration & Mediation Legislation Now Before Congress

Over at Disputing with at least one bill that would mandate mediation (to irritate mediation purists who learned this catechism at their ADR parents' knees- "mediation is a voluntary process . . . ")

Thanks to Timothy R. Hughes - @vaconstruction in my twitter network - for the head's up.


The American Arbitration Association Gives Up Consumer Debt Collection Disputes as Well

See the Wall Street Journal article Credit Card Disputes Tossed into Disarray on NAF's settlement with the State of Minnesota and the AAA's decision to "stop participating in consumer-debt-collection disputes until new guidelines are established."

Here's the entire text of the triple A's announcement (h/t to Disputing here)

The American Arbitration Association® Calls For Reform of Debt Collection Arbitration

Largest Arbitration Services Provider Will Decline to Administer Consumer Debt Arbitrations until Fairness Standards are Established

New York, NY– (July 23, 2009) – The American Arbitration Association (AAA), the world’s largest conflict management and dispute resolution services organization, today recommended in a House subcommittee hearing that the process surrounding consumer debt collection arbitration needs major reform and recommended a national policy committee to identify and research solutions. AAA said it will not administer any consumer debt collection programs until those solutions are determined.

AAA senior vice president Richard Naimark told the Domestic Policy Subcommittee of the House Oversight and Government Reform Committee that the AAA “has not administered significant numbers of debt collection arbitrations relative to some other organizations,” and has not handled any since June after it concluded a single high-volume program. However, he said that AAA had independently reviewed areas of the process and concluded that it had some weaknesses. As a result of that review, it is evident to the AAA that “a series of important fairness and due process concerns must be addressed and resolved before we will proceed with the administration of any consumer debt collection programs.” According to Mr. Naimark, areas needing attention from the national policy committee include consumer notification, arbitrator neutrality, pleading and evidentiary standards, respondents’ defenses and counterclaims, and arbitrator training and recruitment.

“AAA has been working with the Domestic Policy Subcommittee to review potential improvements in consumer debt collection arbitration procedures for some time. We believe that arbitration can play a major role in consumer debt collection disputes. A national policy committee dedicated to meaningful reform can enhance an array of due process elements so that there is deeper fairness and transparency. Consumers deserve an alternative to litigation, but they also need to be able to trust that option. Our goal will be to achieve that trust,” Mr. Naimark said after the hearing.

“We have been studying this issue for some time. We made our decision to impose a moratorium on administering consumer debt arbitration independently and not at the behest of any outside entity as has been claimed. We commend the Domestic Policy Subcommittee for its initiatives to protect consumers in debt collection cases, and we will continue to work with it willingly and enthusiastically,” Mr. Naimark said.

Never Negotiate with Your Creditors Out of Fear, But Never Fear to Negotiate Lower Interest Rates, Waiver of Interest, Late Fees, Etc.

O.K., times are tough.  And it takes no small amount of courage to face the financial disaster that credit cards can cause to even those who feel themselves to be the most sober of financial citizens.  Then it takes real courage to pick up a telephone and make a request to a disembodied and not-likely-friendly voice to ask for help bailing you out of a mess you can barely believe you find yourself in.

I have three things to say about this.  First. The country's supposed financial geniuses are unable to pay their debts and are facing bankruptcy.  You are not alone.  Second.  There's nothing to be ashamed of, though there is something to be learned from this painful experience.  I know.  I was there during the recession of the early '90s.  Third.  You are not without remedy.  Take a look at "How to Negotiate with Your Creditors" at Entrepreneur Magazine this week.

Tips to help you negotiate with a creditor or collection agency:


    • If you make a request that is denied for whatever reason, ask to speak with a supervisor.

    • Don’t agree to pay more than you can afford when negotiating. Know in advance what your financial situation really is, then work within those confines. The last thing you want to do is negotiate a settlement or payment plan that you can’t adhere to.

    • During your negotiating process, figure out what the creditor is willing to accept as a settlement. What’s their absolute bottom line? If you’re looking for a settlement, offering between 50 and 70 percent of what’s owed, either as a lump sum payment or through a payment plan, isn’t unreasonable. Achieving this settlement might take several rounds of negotiation, however.

    • Avoid becoming intimidated by the person you’re negotiating with, even if they make threats about lawsuits.

    • Most successful negotiations require several rounds going back and forth with offers and counter offers. The process could take days or weeks.

    • If you can afford to settle an account by paying one lump sum (as opposed to using a payment plan), you’ll have more negotiating leverage.

    • The person you’re negotiating with does this for a living and is a trained professional when it comes to debt collections. For them to use legal terminology during a conversation or in writing is a common tactic to confuse or intimidate you. Listen carefully to what’s being said and make sure you understand exactly what you’re committing to. Consult with a lawyer or credit counselor if you have questions.

    • Make sure everything you ultimately agree to is put in writing, signed, and dated by both parties.

What to Negotiate for When Dealing with Creditors, Lenders, or Collection Agencies

  • a lower interest rate

  • the interest accrued to be waived

  • the late fees, penalties, and/or legal fees to be waived

  • the loan to be extended or restructured, allowing you to skip one or more payments with no penalty

  • a payment plan that would allow you to pay off the amount currently owed, but with no added interest or fees added in the future

  • a settlement that would include a significantly lower balance due (such as 50 to 75 percent of the total)

  • favorable reporting to the credit reporting agencies or the removal of negative information from your credit report pertaining that to that account
Jason R. Rich is the bestselling author of more than 37 books including The Complete Book of Dirty Little Secrets: Money-Saving Strategies the Credit Bureaus Won’t Tell You, available from Entrepreneur Press. His books cover a wide range of topics, including computers, e-commerce, personal finance, career-related topics, and travel and entertainment. He also contributes regularly to major daily newspapers, including the New York Daily News, as well as national magazines and popular websites.

Victoria Pynchon Now Available on AAA's Non-Binding Dispute Resolution Services Panel for Businesses and Consumers

The American Arbitration Association announces a new set of dispute resolution services for businesses and consumers, including new panel members of which I am one.

Mediation and non-binding arbitration are processes that offer parties opportunities to settle their disputes. Pursuing settlement helps clients to reduce the total cost of conflict management in their organizations, provides flexibility and protects valuable relationships with partners
and customers.

The American Arbitration Association®’s (AAA) Non-Binding Dispute Resolution Services for Businesses and Consumers is a suite of settlement services and solutions that include:

  • Mediation

  • Non-Binding Arbitration

  • Non-Binding Arbitration and Mediation Contract Clauses Guide

An important element of the suite is access to AAA staff facilitators who stand ready to aid parties in selecting the settlement options most appropriate for their needs and the circumstances at hand. To reach a facilitator, simply select the “Contact Us” option below to send an email requesting information
and assistance

Here are the consumer procedures.  You can also find these rules on the commercial dispute resolution page here.  And here's a .pdf download of dispute resolution clauses geared toward the business and consumer dispute resolution services provided by the AAA.

Will Dems Ban Mandatory Consumer/Employee Arbitration?

This just in on the same day I attended the AAA's Expedited Case training.  As an ADR practitioner I favor party "choice and voice" in all dispute resolution venues, meaning that I frown on adhesion contracts of all types, including those that are unfairly imposed upon consumers and employees.  The devil in the detail, of course, is the meaning of the term "unfairly."  I am unfamiliar with the proposed law subject of this article and neither support nor oppose it.  Just keeping my readers informed.

Democratic Party control could ban mandatory arbitration, expert says


Jan Dennis, Business & Law Editor
217-333-0568; jdennis@illinois.edu

Click photo to enlarge
Photo by L. Brian Stauffer
Michael LeRoy, a professor of law and of labor and employment relations, says Democratic Party control in Washington could restore lawsuits as an option for workers and consumers now forced to settle disputes through mandatory arbitration that gives employers and businesses an unfair edge.
CHAMPAIGN, Ill. — Democratic Party control in Washington could restore lawsuits as an option for workers and consumers now forced to settle disputes through mandatory arbitration that gives employers and businesses an unfair edge, a University of Illinois labor law expert says.

Michael LeRoy predicts a bill sponsored by Democrats that would bar companies from imposing arbitration will likely be approved next year when Democrats take over the White House and add to their majorities in Congress.

The measure, introduced last year but stalled by the prospect of a Bush administration veto, would halt a shift that has grown since a 1991 U.S. Supreme Court ruling allowing firms to require arbitration rather than courts to resolve disputes, he said.
For full article click here.

Here's the summary of the bill courtesy of the Consumerist:

Arbitration Fairness Act of 2007 - Declares that no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of: (1) an employment, consumer, or franchise dispute, or (2) a dispute arising under any statute intended to protect civil rights or to regulate contracts or transactions between parties of unequal bargaining power.

Declares, further, that the validity or enforceability of an agreement to arbitrate shall be determined by a court, under federal law, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement.

Exempts arbitration provisions in collective bargaining agreements from this Act.

Even if They're Just Hoops to Jump Through ADR Clauses are Worth Getting Right

Bob Hunt over at Realty Times has a nice consumer-friendly article entitled Californa Court Holds That Mediation Provision "Means What It Says".  /*

As Hunt writes, 

The standard residential purchase contract in California is produced by the California Association of Realtors® (CAR). It contains two sections that are easy to overlook or to take as “boilerplate”, but that can be very important if things go awry between the parties. One of those sections deals with attorney fees, providing that, in the event of any proceeding between buyer and seller, the prevailing party shall be entitled to attorney fees and costs from the non-prevailing party. The attorney fee section contains an exception, however, and that exception is spelled out in the portion of the contract referring to mediation. There it is said that, if either party initiates an action “without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees… .” [my emphasis] /*

When Mr. Thrifty and I purchased our house in '02, we were presented with one of these form contracts.  I'm a lazy form contract signator myself.  Negotiation training or not, I generally assume these contracts are "take it or leave it" and I sign them accordingly.  /**

Not Mr. Thrifty.

"What's the procedure?"  I recall him pressing our real estate agent.    "When is the demand for mediation supposed to be made and how are the parties supposed to conduct it and what happens if the parties can't reach agreement on the mediator to conduct the process?"

He was having none of it. 

"I'm crossing it out," he said, as blue ink flowed over the mediation provision and our agent let out of small gasp of dismay.

By that time, everyone was so "bought in" to the sale, that Mr. Thrifty's effort to strike  the form language prevailed.  No mediation necessary in this household!

Beware of Form Contract Language

As Bob Hunt explains, the Lange Court gave the back of its hand to the contention that it was "too difficult" to make the required demand for mediation.  

“If the [sellers] could be found and served with a lawsuit by mail, they could have been sent a mediation demand by mail[,]” [held the Court]  All that the plaintiff had to do was attempt to mediate before he filed suit; and he didn't. Quoting a related case, the court noted that the mediation provision “means what it says and will be enforced.” 

Though it's not surprising to find bare bones ADR provisions in industry form contracts -- bones so bear that their meaning must be litigated -- defeating the purpose of the summary proceedings provided for -- it is surprising to find attorneys continuing to paste form contract language into their client's negotiated agreements.  This is particularly troublesome when what's at stake -- the attorneys' fees -- makes the difference between bringing litigation or not or settling litigation or not.

If it's worth putting a clause into your contract, it's worth spending the time to imagine what might happen if circumstances triggering that clause arise.  If you're practicing in a firm with both transactional and litigation attorneys, I highly recommend that the wordsmiths run the "standard" ADR, attorney fee, choice of law, and venue provisions by the litigators who have undoubtedly already tested these provisions in the fire of conflict.  You won't be sorry you did.       


*/  The case -- Lange v. Schilling -- was originally ordered not not to be published.  Had that Order stood, the case would not create precedent under California law.  As the reader of the linked opinion can see, however, it was subsequently ordered published and can be cited as authority. 

**/  The form contract language at issue reads as follows:

Buyer and Seller agree to mediate any dispute or claim arising between them out of this Agreement, or any resulting transaction, before resorting to arbitration or court action. . . . If, for any dispute or claim to which this paragraph applies, any party commences an action without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action.

And the Gutsy Arbitrator Award of the Decade Goes to . . . .

. . . the Honorable Sam Cianchetti, Los Angeles Superior Court Judge (ret.) for his decision awarding $8.4 million in punitive damages, for a total $9 million award, against Health Net In the Arbitration between Patsy Bates and Health Net, et al

Los Angeles Times article here and the opinion itself here.

UPDATE:  For coverage of this case within the industry see The National Underwriter post here.

Another Consumer Arbitration Agreement Bites the Dust

This one is Lowden v. T-Mobile USA decided today by the Ninth Circuit.

We conclude that the Washington State Supreme Court’s decision in Scott v. Cingular Wireless, 161 P.3d 1000 (Wash. 2007), establishes that T-Mobile’s arbitration provision is substantively unconscionable and unenforceable under Washington state law, and that there is no federal preemption in light of our decision in Shroyer v. New Cingular Wireless Servs., Inc., 498 F.3d 976 (9th Cir. 2007).

Negotiating Retail: Buy the Suit and Take the Shirt and Tie for Free

It is mediation creed that Americans don't like to bargain.  If they did, there probably wouldn't be mediators or Hollywood agents.

Now the New York Times tells us why.  After World War II, we had a virtual monopoly on consumer goods.  Our negotiation skills took a hike in the woods and never returned.

Anyone who wants to save a few bucks on the purchase of consumer goods without the assistance of a professional negotiator should read today's New York Times article -- For Champions of Haggling, No Price Tag is Sacred.  Advice by Herb Cohen, author of the best seller “You Can Negotiate Anything” below. 

  • Make sure it is worth your time. Generally that means only bargain on big-ticket items.
  • Don’t fall in love with anything you’re trying to buy — you should care, but not too much.
  • Do your homework on comparable prices.
  • Offer cash rather than a credit card.
  • Remember — you have the power. Money talks, but money can also walk.

    Also, keep in mind that the more time a sales representative has invested in a sale, the more he will want to give you a bargain. Mr. Cohen gives the example of trying on three or four suits and deciding on the fifth one.

    “They bring in the tailor and the salesman is gleefully writing up the bill. Then I turn to the salesman and say, ‘What kind of tie will you throw in for free?’ ”

    It works for free shirts, too.

Strategic Planning for the Flat Screen TV Negotiation

As Jeffrey Gordon over at the Software Licensing Handbook cogently explains in his post on Strategic Thinking, "when faced with a negotiation [it is important to] sit down and ponder your moves."

If you come out guns blazing, the other side is probably going to respond in kind. Which means that you’re setting the stage for an aggressive negotiation and will be fighting for things along the way. On the other hand, too soft, and you’ll give up everything. This is where some of the experts obviously advise differently. One camp says “play stupid” and seek what you can get through self-depreciating behavior. Another camp (pardon the pun, but it’s actually Jim Camp) says that you should always “Start with No” as a way to encourage discussion.

The net result of Strategic Thinking is an ability to not only see what your path could be, but to also see where your opponent is going to move. For if you play a win-win strategy against someone with a win-lose strategy, who do you think is most likely going to lose? If you’ve considered your various options and thought Strategically, you’ll know how to respond.

Strategic Planning:  Negotiation "Style"

Though Gordon talks about planning ones negotiating style ("hard" or "soft") I always lead with a style that is "hard on the terms and soft on the people."  As a matter of negotiation "style" I also

I also recognize and attempt to guard against my weaknesses which are:

  • impatience; and,
  • discomfort when the negotiation appears to be but rarely has actually has reached impasse

Strategic Planning:  Setting Ones Reservation Price; Planning  the Number and Timing of Concessions; and Deciding Which Information Will Be Strategically Deployed 

My own pre-game strategic planning primarily consists of setting my "reservation price" (the number I will not go below); projecting the planned timing and number of concessions; and, deciding on the nature and timing of information disclosures that I believe will enhance my bargaining position.  I also make a decision, in a case like this, whether I wish to aggregate or divide the several items subject of the bargain.

So What Was the Actual Plan?

We were lucky to have both several items to negotiate and several preferences for each negotiated item.  What were they?

  1. the television itself;
  2. the $100 HD cable;
  3. the furniture on which to place the television; and,
  4. sales tax, which for reasons I'm not entirely clear about, sales people generally are happy to "cut" as part of any retail purchase.

We decided that I would be the primary negotiator with Mr. Thrifty as my back up. 

I knew there was a lot of "fat" in the furniture.  The purported "retail" price for the "wood veneer" television stand was $598, "reduced" to a "sales" price of $398.  Having checked online prices for this piece if furniture, I knew that at least one online store claimed that its "retail price" was $349 --  $50 more than the Ken Crane's claimed "sale" price and that we could purchase it online for $285, $110 less than the store was offering.  

Though we were unable to obtain comparables for the Toshiba -- tagged at $2598 -- we knew we could buy a comparable Samsung for $2300 over at Fry's Electronics in Burbank

Mr. Thrifty and I decided that our reservation price (or bottom line) was $3,000.00 for all of the items listed above, which would be $366 less than "retail."

Although I firmly believe we could have negotiated a deal at that price, we concluded the deal $150 short of our "reservation price."  I'll explain why that happened when we cover time management and perception of power in our final post on negotiating consumer purchases.

Chapter 3, in which we pause our HD-TV negotiation for a conversation with not one, not two, not three, but four satellite television provider representatives

(photo Destiny Calls by Neal Sanche)

Is there any negotiation more frustrating than the one you conduct on the telephone with people who won't give you their last names, have no "authority" to do or say anything that deviates from their script and who you are finally connected to only after enduring the "go ahead, try to choose the right numeral to fit your problem" automated phone system.

I'll include some of these conversations in the series on negotiating the purchase of the flat-screen T.V. 

This post, however, is an emergency act of mercy for anyone who is upgrading their DirecTV non-HD DVR service to either Dish or DirecTV HD-DVR system.

Information Gathering Cut Short

After at least one full hour of searching online, I found this clear, easily understood, linked resource entitled My Dish Network vs Direct TV Experience.  This advice page links to a side-by-side comparison of the HD-TV-DVR "deals" being offered by satellite providers here at the DigitalTVDojo Daily Deal Monitor.   The "Deal Monitor" links to the "secret" web deals that you will not be offered on the telephone or the internet unless you find them. 

But that's not all. 

Gathering Information about the Dish Service

Preface:  After the Dish representative dodged the following question four times, I gave her one last chance, telling her she would lose my potential business unless she answered it.  She didn't.  I called DirecTV for the second time that day.

The question:  will you provide me with a 5 LND dish free with the HD service?

What the question means:  I have no idea.  My rocket scientist neighbor told me that's what I needed.

Back to DirecTV

If you, like us, are existing DirecTV customers, you cannot get the "deal" linked above online.  If you sign in to your account (or create an existing user account) the only "deal" available to you is to pay $299 for a new HD DVR (which you understand you are leasing, not purchasing).

Here's who you have to call to get the same deal being offered to new customers:  The Customer Retention Department.

How do you get there?  Press 0 even though you're not given this option, which may not directly connect you to a human operator, but will lead you to one more quickly than any other means I tried.

How I Got to the Customer Retention Department

I spent a lot of time appealing to DirecTV's "higher value" of customer service and its interest in retaining customers.  I said the words "Dish" alot.  I said, you're not a monopoly and you have the power to lose a customer today.  That sort of thing.

But all this effort bought me was access to the Holy Customer Retention Department. 

So don't bother negotiating your way there.  Just ask to be directly connected.

The Deal the Customer Retention Department Will Give the Existing Customer

(please let me know if you do better -- Thad Employee # U2179 represented to me "as a matter of fact" that this was absoutely the best deal any existing customer could get on an HD-TV DVR upgrade.  I'm hoping no one proves to me that Thad misrepresented the available deals because I'd like to continue to believe that when directly asked this question, my negotiating partner will either say -- I cannot guarantee that -- or tell me the truth.  I'll provide a link for misrepresentations during negotiations and negotiation ethics later).

Here it is: DirecTV will:

  1. provide you with an HD-DVR for $199
  2. it will install the needed 5 LNB dish
  3. though the cost of HD service is an additional $9.99/month, DirecTV will waive that fee for the first year ("that's a $120 value" says Thad)
  4. free installation
  5. free handling and shipping

That's it.  Happy shopping and thanks to all the selfless TV service bloggers who helped along the way.







How to Negotiate the Purchase of Your New Flat Screen HD T.V.

(the Toshiba 46LX177 46" REGZA™ Cinema Series® 1080p LCD HDTV with 120Hz refresh rate; our vendor - Ken Crane)

I have long complained that high definition television is the triumph of form over the "content" our 500-plus channels deliver to us. 

Nevertheless, the February 2009 deadline to go digital is, more or less, looming.  Not to mention the fact that today is our first wedding anniversary and the seventh day of Hanukkah.  Christmas is just around the corner.   

That confluence of events provided the rationale, the justification for me and Mr. Thrifty to finally bite the H.D.T.V. bullet and negotiate the purchase of technology that would likely cost us more than each of us paid for our first automobiles.

Before putting your non-bargaining toes in consumer negotiations, you might want to take a peek at the U.K Telegraph article The art of being a winning negotiator, our knowledge of which we owe to Diane Levin at the Online Guide. 

There's not a lot that's new in the Telegraph's report of a five-day Oxford negotiation program for seasoned professionals -- first "identify what you want, what the other side is likely to want, what you can discover from the public media [and then] build relationships with the other party, picking up intelligence which couldn't be gathered in advance such as his personality, mood, style of negotiating, constraints."

What struck me as noteworthy was the article's expressed surprise that people 'at the top of their game' professionally would feel the need for a course in negotiation.  

This is not news to someone like me who realized on my first day of mediation training that I'd been negotiating the settlement of litigation for 25 years as crudely as Cullen, director of the Oxford Programme, said sophisticated business people tend to do. They "negotiat[e] fairly crudely," he said, and "hadn't realised how they could do it so much better."  

As I sit at home today waiting for delivery of the TV at the top of this post, I'm going to take my readers on a step-by-step guide to buying the high-end technological gee-gaw of your choice this holiday season.  Or, because we don't watch television all that much, the mid-market Flat Screen High Definition LCD T.V., with accessories and furniture.  

High-market, mid-market or low-end, one negotiation is as easy or tough as another depending upon your negotiation skills.  And to tell you the absolute truth -- those lawsuits with the least in controversy are generally the most difficult to negotiate.  

But I digress. 

Step No. 1:  Preparation, next.

More Statistics on the Differences between Arbitration and Litigation Procedures, Cost, Duration and Outcome

(photo:  Amanda Graham's Outlier)

I have Christina Doucet at the National Arbitration Forum to thank for summarizing some of the most recent statistical literature available on differences between procedure, cost, duration, outcome and party satisfaction of litigated and arbitrated consumer and employee disputes.

Time and Cost Differences Between Arbitration and Litigation

  • Employment claims take 650 to 720 days to be resolved in court, according to the National Center for State Courts. 
  • The median time to resolve an employee dispute by arbitration is 104 days 
  • the median cost of resolving employment disputes by arbitration is $870.

Sources: Consumer and Employment Arbitration in California: A Review of Website Data Posted Pursuant to Section 1281.96 of the Code of Civil Procedure California Dispute Resolution Institute, August 2004 http://www.mediate.com/cdri/cdri_print_Aug_6.pdf   and Examining the Work of State Courts, (1999-2000) National Center for State Courts http://www.ncsconline.org/D_Research/csp/1999-2000_Files/1999-2000_Tort-Contract_Section.pdf

Outcome Differences Between Arbitration and Litigation:  Arbitration & litigation final awards are essentially the same as court judgments

  • median monetary awards for successful claimants are greater in arbitration than in court—$100,000 in arbitration compared with $95,554 in court.

Continue Reading

More on Perceived Biases Among Employment Arbitrators

Yesterday, I promised to provide a little "pro" arbitration wisdom in response to my speaking partner's "con" since that's our ALFA Seminar topic here in beautiful Half Moon Bay.

And yet it's 4 a.m. before I realize I can't sleep because I've been mediating too long to seriously launch one side of any debate.  Everything and everyone has become so much more three-dimensional, multi-layered, and textured as a result of three full-time years of ADR practice.

So let me share the first of my non-scripted thoughts on the matter.   

I'm Unwilling to Prejudge the Court's, the Arbitrator's or the Jury's Biases.  

If you read yesterday's post, you'll recall that several of the anti-arbitration arguments were based upon the presumption that the arbitrator will more likely than not be biased in favor of the plaintiff because:  

  1. Arbitrators have a vested interest in their case load persisting, whereas the courts are interested in purging their dockets, thus making early termination in court more likely than in arbitration.
  2. Arbitrators' [presumed] self-interest in maintaining and expanding their own ADR practices encourages a "split the baby" mentality and reluctance to terminate the case short of a full hearing.
  3. The "repeat" player bias will favor the Plaintiffs' bar who the arbitrator will see far more often than counsel for any particular employer.

Having spent  25+ years with attorneys, judges, mediators and arbitrators, I simply can't assume bias.  A few bad apples aside, the men and women of the legal profession are among the most ethically-minded of any professional or business people I have known -- by many, many, many degrees of magnitude. 

Continue Reading

Fortune 500 GC Says Litigate, Don't Arbitrate, Employment Disputes

(photo:  Employees Only by Michelle Thompson

While most of the arbitration news of the week is about the unfair advantage given to corporate "repeat players" in the arbitration of disputes, Senior Legal counsel for DHL counsels employers to abandon arbitration's ship and swim back into litigation's pacific waters.  

Though I'm the "pro" arbitration speaker with DHL in-house counsel Joshua Frank at this week's ALFA Labor & Employment Practice Group Seminar in Half Moon Bay, I don't have strong feelings one way or the other (preferring, as you can imagine, the negotiated, to the adjudicated, resolution).

Mr. Frank's reasons for suggesting that the Courts are a better forum for employers and arbitration better for employees?

    Continue Reading

Getting Your Class Action Waiver Past the California Supreme Court Remains Challenging

(for our Canadian readers, our featured treatise is Litigating Conspiracy:  An Analysis of Competition Class Actions , Stephen G.A. Pitel, Ed.)

An excellent concise summary of Gentry v. Superior Court, where the California Supreme Court Questions Enforceability of Class Action Waiver on Public Policy Grounds is once again provided by the National Arbitration Forum, excerpt below.

By a 4-3 majority, the California Supreme Court reversed an order compelling arbitration and remanded the case to the trial court with instructions to use a multi-factor test in determining the enforceability of a class action waiver. The ultimate question for the trial court is whether class-wide proceedings would be “a significantly more effective practical means of vindicating the [statutory] rights” of the employees who belong to the putative class. Parties who prefer the simplicity of one-on-one arbitration should not be overly concerned by the majority holding because this decision has no application outside of the employment context.

For full text of NAF's summary, click here.

This pdf of the opinion comes to you courtesy of Jeffer Mangels Class Action Defense Blog with Jeffer's excellent case analysis from a defense perspective here.  

Another good and thorough analysis appears here.  Gentry v. Superior Court - California ruling on class action waiver in arbitration agreement.


Comment on the New California Cell Phone Arbitration Rulings from Business Week

(pictured:  an overdressed 1985 Motorola Cell Phone from Bulletz of Knowledge post Dress the Elderly Cell Phone)

For the business, rather than a strictly legal, analysis of the recent Ninth Circuit and other California rulings on the unconscionability of consumer arbitration clauses, see the excerpt and link to Business Week's article on the issue below.

Cell-Phone Contract Disputes Heat Up -- Court rulings in California could lead to changes in dispute clauses in wireless contracts and fuel class actions against carriers by Olga Kharif 

Read almost any cell-phone contract and you'll discover that the longest passage deals with dispute resolution. While seemingly important matters like billing get only one paragraph, Verizon Wireless devotes six paragraphs to dispute resolution. At AT&T (T), the dispute section takes up 10 fat paragraphs and states: "You agree that, by entering into this Agreement, you and AT&T are each waiving the right to a trial by jury or to participate in a class action."

The small print keeps expanding in response to an influx of court cases—at least 10 of them in California over the past few years—questioning a wireless carrier's right to block consumers from suing or filing class-action claims. In late June a California appeals court reaffirmed a lower court's order that (T-Mobile USA) could not enforce a clause requiring arbitration of disputes with customers. And on Aug. 17, the U.S. Court of Appeals for the Ninth Circuit in California ruled that AT&T's prohibition against subscribers banding together in class actions, "is unconscionable, and, thus, unenforceable."

Click here for the remainder of the article.

Federal Legislation Introduced to Bar Pre-Dispute Arbitration Provisions in Consumer Contracts

According to the ABA Journal Law News two Democratic lawmakers have introduced legislation that would prevent the inclusion of mandatory arbitration clauses in consumer contracts as well as those contracts implicating the consumer's civil rights. 

Though the parties could still agree to arbitrate their disputes after they arise, the bill would make unenforceable pre-dispute arbitration provisions within the scope of the legislation.  Article here and except below:

Two Democratic lawmakers have introduced legislation that would bar enforcement of some mandatory arbitration agreements.

The Arbitration Fairness Act would bar mandatory arbitration agreements involving employment, consumer rights, franchises or civil rights, according to a press release.

Agreements to arbitrate in these areas could be made after a dispute arises, but not before.

The law is designed to prevent consumers from being forced into arbitration.

To continue reading, click here.

The Perils of Class Arbitration

(photo by  Ken Douglas)

For some of the reasons your clients might not want to include arbitration clauses in their consumer contracts, see the Metropolitan Corporate Counsel Article on Class Arbitration by P. Christine Deruelle and Robert Clayton Roesch of Weil, Gotshal & Manges LLP.

Excerpt on the Perils of Class Arbitration below: 

First, the scope of review available for an arbitrator's ruling is significantly limited. . .

Second, the conventional time and cost-savings of arbitration may be lost in class proceedings, since each of the interim phases related to class- and merits- arbitral awards will carry with them potential burdens relating to discovery, briefing, hearings, and time, money and effort spent in obtaining judicial review at each of the various phases, which will not necessarily be present in individual arbitrations.

Third, the parties' arbitrator selection process will likely be guided by different factors in a class arbitration proceeding than in an individual arbitration, since the fate of all of the class claims will be decided by a single arbitrator or panel.

Fourth, the specter of class arbitration disposes of the presumption of privacy and confidentiality in arbitration.

Part II of this two-part article will address potential means for companies and practitioners to attempt to avoid these and other pitfalls of class arbitration.

Don't let this summary lead you to believe that this article is not extensive, thorough and deep.  If this is a topic of interest to you, this is one of the best articles on the topic I've seen.  Do click on the above link and take a peek.

The Non-Defensive Defendant: Class Action Settlements in the News

What Does a Class Action Lawyer See (right)?  CLIENTS!

The AP reports a proposed class action settlement (pending judicial approval) of $10.5 million.  If you read between the lines of the report, you'll see that this was apparently a good deal for the defendants.  

Why?  Because the Board of Directors charged with encouraging their employees to place their pension funds in risky investments (ENRON ring a bell?) did not simply hunker down in a defensive posture when sued, but instead provided the company's former employees with "numerous enhancements" to their pension benefits. 

According Plaintiffs' counsel Steven Krasner, "[t]hose benefits were very substantial  If you add the $10.5 million to that, they did a pretty decent job to make people whole."   

The defendants' public statement was the usual -- "[i]t's always more efficient to resolve the issues in a case rather than follow through the courts" -- according to spokesman Al Butkus.

Though the public generally sees a statement like this to be corporate %$^#, as we all know, it also happens to be the actual verifiable truth.

The Strategic Defensive Use of the California Consumer Legal Remedies Act

The California Consumer Legal Remedies Act, by the way, is a good face-saving device to bring your clients into strict compliance with consumer demands, thereby sharply reducing the settlement value of the class action or 17200 suit that invariably follows.

The CLRA requires a pre-suit demand by the plaintiffs, thereby giving the defense an opportunity to mend its ways. 

In my own litigation experience, compliance with a CLRA demand to change the way a product or service is advertised is a relatively pain-free way to drastically reduce your clients' damage exposure.  My client did this in response to an accusation that its advertising was misleading.  Though we disagreed, the client nevertheless changed its advertising to reveal the allegedly concealed transaction fee.   

As a result, Plaintiffs' counsel accepted an unprecedented injunction-only remedy coupled with a few hundred thousand dollars in attorneys fees to settle the case -- a far better deal than the dozens of other defendants in this national class action were able to achieve.


First, because our compliance with the CLRA demand made our client look like a good guy -- ruining the Plaintiffs' "spin" that all defendants were evil profit hungry businesses preying upon innocent victims (cf. the new Glenn Close series Damaged).  

Second, because the Plaintiffs' attorneys (who are, remember, people) were favorably impressed and kindly disposed to us after we complied with their demand rather than simply burying them in paperwork -- well, we did also bury them in paper by strictly complying with their document demands, but that's litigation -- speak softy, carry a stick and remember the rule of reciprocity.  

AP item here.

Arbitration of Securities Disputes

(click on image to see consumer law attorneys Horwitz, Horwitz & Associates)

Financial Week reports today in SEC and Congress gang up on arbitration that "[l]egislation in Congress would block mandatory arbitration clauses" in all instances.  As the article notes,

Bills introduced by Sen. Russ Feingold (D-Wis.) and Rep. Hank Johnson (D-Ga.) would make pre-dispute arbitration agreements invalid and unenforceable. Mr. Johnson called mandatory arbitration an “albatross” for investors. “Despite what companies may say, it is not more affordable than going to court,” he said.

Zach Lowe, a spokesman for Mr. Feingold, said the legislation reflected concern over a push in the corporate world to allow mandatory arbitration and the overuse of such clauses in broker-dealer contracts. The Senate bill said that mandatory arbitration “undermines the development of public law for civil rights and consumer rights because there is no meaningful judicial review of arbitrators’ decisions.”

This legislation, if enacted, would affect so many powerful corporate instances that I wouldn't hold my breath for its passage any time during this century.  Still, it will be interesting to follow the debate.  

As I've often said here, I favor negotiated agreements, not obligations imposed by a party with superior bargaining power on a take it or leave it basis.  This is particularly true in consumer contracts where the print is fine, located only on web sites and/or imposed in the middle of a contract term by way of notice contained in a consumer's bill.  

Because self-regulation often follows Congressional regulatory trial-balloons, the best  consumers can likely hope for will be increasing attempts by service providers of all stripes to make arbitration a genuine choice for its customers.

And while you're over at Horwitz, check out their blog, particularly this post on frivolous lawsuits (my own post on frivolous lawsuits can be found here).

The Arbitration of Canadian Consumer Contracts

(photo:  Cohdra at MorgueFile)

Friday the thirteenth was (temporary) bad luck for Canadian consumers.  I say temporary because Ontario and Quebec have forbidden mandatory arbitration clauses and class action waivers.  The Canadian Supreme Court in the two cases discussed below held that in the cases before it those statutes could not be applied retroactively.

Though no Canadian Law expert (I was hipped to the Dell opinion by my Canadian buddy Michael Webster of the Due Diligence and Misleading Advertising Blog) it appears that a Dell mandatory arbitration and class action waiver clause is not against Canadian public policy (referred to by the Court as not against "public order.")  See the Canadian "The Court" Blog's article, "Is the Class Action a Public Order Institution," excerpted below.

Ironically, when the Dell and Rogers cases are placed in a larger social context, the public’s interest in securing the class action as a vital aspect of the public justice system could hardly have been rendered clearer. The Rogers case received much less of the court’s attention, having been carried through on Dell’s slipstream; however it is the features of Rogers’ mandatory arbitration/class action waivers on its consumer contracts that highlight the hollowness of off-the-bench judicial laments about access to justice for ordinary Canadians.

Both cases turned on the sublimely procedural question of whether an arbitrator or a Quebec superior court judge should have first kick at the can in deciding whether a mandatory arbitration clause on a consumer contract was enforceable or not. Such clauses preclude consumers from pursuing corporations in any kind of court action, including class action.

In both Ontario and Quebec the question has been rendered moot by amendments to consumer protection legislation which prohibit such clauses, underlining the public order aspect of the class action.

Read the rest of the article here (emphasis added).

More on Arbitration Agreements in Cell Phone Contracts

(photo by Vilanova, MorgueFile)

In this federal case, the Ninth Circuit held that the addition of an arbitration clause to the cell phone service contract, imposed by way of the posting of a revised contract on its website with no pre-existing notice to its subscribers was unenforceable.  The class action plaintiffs were therefore not required to arbitrate their claims and the class action waiver (also imposed upon subscribers in this same manner) was unenforceable.  Douglas v. United States District Court for the Central District of California

The Fine Print: Sprint's Arbitration Clause

Ascertaining All of the Terms and Conditions of Your Cell Phone Service

(I'm using Sprint as an example only because the question posed to me related to Sprint -- I'm assuming most cell phone service agreements are the same, or at least substantially similar)

Because a reader asked, I learned today that the Sprint Cell Phone Service Agreement contains an arbitration provision. 

How did I gain this valuable knowledge?  Read on.  

A Trip to the Grocery Store   

On my way to the grocery store this morning , I drove by a Sprint outlet.  So I stopped, ran in, and had the following conversation with the Sprint representative.

"Can I get a copy of Sprint's service contract?"


"You know, the terms and conditions of the Sprint cell phone service plan."

"Uhhhhhhhhhhhhhh -- you mean the, uh, Plan Brochure?"

"Does it have all of the plans' terms in it?"


"You know, the FINE PRINT?  the contract?  the parties' agreement if I sign up for service."

Smiling, "sure," she replies, handing me the brochure and graciously validating my parking ticket (the one with the waiver of the car park's legal responsibilities to me or my car printed on the back in 3-point type).    

Now that I've Read ALL the fine print in the Sprint brochure, I can tell ou that there is nary a mention, hint, suggestion or covert reference to "dispute resolution" or court or jury trials or arbitration. 

Nothing, Nada, Nichts.

I Should Have Gone On-line in the First Place to Find the Sprint "Terms and Conditions" of Service

At the very bottom (left hand corner) of Sprint's Plan Page you will find a link titled "Terms and Conditions." 

That's where you'll find your Sprint Cell Phone Service Agreement -- that adhesion contract I was talking about in my last post.  It is here where you will find that by signing up with Sprint (and likely all other cell phone providers) you agree to waive your Constitutional right to a jury trial [except in  California where the Supreme Court has refused to enforce pre-dispute jury trial waivers such as that required by Sprint here] and your Constitutional right of access to the courts. 

You also consent to submit any dispute you have with Sprint to binding arbitration under the authority of the Federal Arbitration Act and the rules of the National Arbitration Forum.  

The Arbitration Agreement Verbatim 

Your Agreement with Sprint Solutions, Inc. . . . includes terms of your service plan . . . and the most recent Sprint Nextel Terms and Conditions of Service . . . carefully read these all terms which include, among other things, a MANDATORY ARBITRATION of disputes provision.

The dispute resolution clauses are at the end of the Terms and Conditions (T&C's).  They provide as follows:

Continue Reading

Taking Charge of Your Consumer Contracts: Cell Phone Arbitration Agreements

A reader's inquiry (does the Sprint cellphone contract contain an arbitration clause?) alerted me to cell phone company "escape" clauses courtesy of the Consumerist Blog's post Materially Adverse Clauses for All Major Cellphones-So You Can Escape a Contract without a Termination Fee.


This is consumer reporting at its finest.  The "little guy" has been fighting (and sometimes winning) the battle of the adhesion consumer contract for years (see the Wage Law Blog's coverage of the California Supreme Court's decision in Discover Bank).

(For non-lawyers, an "adhesion" contract is one you didn't really agree to because, for instance, it came as an insert with your monthly cell-phone or credit card bill or appears on the back of the ticket you pull when you enter your local mall's parking lot.  It's an asymmetrical contract.  The party imposing the agreement on you has all of the power and you have none.  Take it or leave it.  That's an adhesion contract and it's not necessarily -- in fact is often not -- invalid).

That said, it appears that most cell phone contracts contain a clause permitting you to terminate your service before the expiration date without a cancellation fee (a real boon if you want to change plans!)

You may generally do so "in response to a materially adverse change [the cell phone company] makes to the Agreement . . . (Sprint Contract language).  The imposition of an arbitration provision that wasn't part of the contract when you sign it would be a material adverse change (I'm actually willing to go out on a limb here and say that's my actual legal opinion).

The Consumerist has collected all of the cell phone service providers "materially adverse change" contractual provisions here.

Sprint requires you to provide it with notice of cancellation within thirty days of their notice to you of the change (as I suspect all the other cell phone services do).  So if you want to take advantage of this, you'd have to begin reading those inserts that come with your cell phone and credit card bills. 

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