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Exam 4: Alternative Dispute Resolution

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Question 1

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A provision in a contract that mandates that all disputes arising under the contract must be settled by arbitration is called a[n] ________.

A) Binding arbitration clause
B) Court-annexed arbitration clause
C) Approved mediation/arbitration clause
D) Consolidated merger clause
E) ADR neutral clause

F) A) and E)
G) D) and E)

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Question 2

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[Sexual harassment ADR] Naomi works at a fast-food restaurant which is owned by an international company located in Mexico. Naomi is very angry with her supervisor, who has been making inappropriate sexual comments to her and other employees. Naomi decides to sue and retains a lawyer, Dominic. Dominic talks with the owners of the restaurant and is informed that Naomi signed an agreement to mediate and also to arbitrate any claims. Naomi informed Dominic about other employees who entered into such agreements and later complained of harassment. Dominic promises her that under federal law, he is legally entitled to get copies of all documents used during any other mediations and arbitrations and that he is also entitled to get detailed information regarding what was said and agreed upon by them. Dominic also tells Naomi that, while he is not going to bring it up now, if they so choose, Dominic and Naomi can avoid the arbitration agreement because under a new federal law, such agreements cannot be enforced if one of the companies involved is internationally based. He also tells Naomi in response to her question about the possibility of mediation in her case to forget it, because mediation is pretty much the same thing as arbitration. Dominic tells Naomi that an option is to arbitrate and, if the outcome is bad at arbitration, file a court action in federal court. Dominic says that the federal court judge would not consider an arbitrator's decision in making a determination. -Was Dominic correct when he told Naomi that if she lost at the arbitration level, a federal judge would consider the case anew without consideration of the arbitration agreement?

A) Yes, because an action in court is considered completely separate from an arbitration proceeding.
B) Yes, but only if Naomi filed an "Intent to Seek Further Relief" form with the arbitrator.
C) No, because the arbitration agreement would completely bar Naomi's ability to file a court action.
D) No, because in a later court action, a federal judge in district court would only reverse an arbitrator's decision for certain reasons such as that the arbitrator displayed bias or corruption.
E) Dominic is correct only because an international company is involved.

F) C) and D)
G) A) and D)

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Question 3

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Private companies do not use mediation to resolve internal disputes with employees.

Sofia tells Gordon she wants to arbitrate their dispute. Gordon tells Sofia that if the arbitrator does not rule in her favor, they can appeal, but it is very difficult to overturn the decision of an arbitrator. Is Gordon correct?

[Pet Pics] Ari went to work as an independent contracting photographer for Wild Pet Pics, a company specializing in photographing exotic pets, such as monkeys and snakes, with their owners. The company's home office was in California, but Ari worked in Florida. Before he started work, Ari signed an agreement to arbitrate any dispute he had with the company. The arbitration agreement provided that in the event of a dispute, Ari would completely cover the cost of the arbitration; that he could only receive up to $150 in damages regardless of his claims, punitive or otherwise; and that any arbitration would be conducted at the company's home office. The agreement also provided that the arbitrator was not bound to strictly follow the official court rules of evidence. Ari signed the agreement because he really needed a job and liked animals. His only previous animal photography experience, however, had been with cats and dogs. Ari's contract provided that he would be paid $100 per shoot and that the company would take steps to ensure his safety. One day he was called in to photograph a skunk and its owner. He was told by the receptionist at Wild Pet Pics that the skunk had been altered so that it could not spray. Ari felt safe. Unfortunately, the skunk had not been altered. Just as he was starting to shoot, the skunk became upset. It ran towards Ari, sprayed Ari, and in the resulting commotion, Ari's expensive camera was knocked over and broken. Plus, Ari's clothes were ruined and he stank for days. Ari wants to sue Wild Pet Pics for $5,000 to cover the cost of his camera, his clothing, and his general smelliness for several days. Ari says that he cannot afford to pay for the arbitration. -How will the provision requiring that Ari pay the costs of the arbitration affect the agreement?

In which of the following do parties select a neutral third party and explain their respective positions to this neutral, who then evaluates the strengths and weaknesses of the case?

Which of the following could be a result of mediation?

[Jade Shoes] Coleman owns a sporting goods store and has purchased top-quality, brand-name athletic shoes from Jade's Shoe Distribution for many years, but they have no written contract in place. Last month, Coleman learned that the latest shipment from Jade's are not authentic, brand-name shoes but instead a knock-off brand that costs a fraction of the price Coleman pays. Coleman cannot sell these shoes because his customers would know the difference, and Coleman demanded Jade refund him. Jade sent Coleman a written request for arbitration within thirty days. In response, Coleman called Jade, threatening to file a lawsuit against Jade and exposing her company as a fraud. Jade laughs, saying Coleman is required to arbitrate their dispute within thirty days. -When addressing which tips would be helpful in creating a binding arbitration clause, the text authors suggest what?

[MegaTron] Emilia filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) , alleging that her employer, MegaTron, failed to promote her because of her nationality and gender. The EEOC had already received several discrimination charges from other employees alleging similar conduct by MegaTron. When Emilia was hired, she signed an employment contract with a clause stating that all work-related claims must be resolved through arbitration. -If, after filing her charge of discrimination with the EEOC, Emilia then filed a discrimination lawsuit against MegaTron, what would the court most likely do?

[Sexual harassment ADR] Naomi works at a fast-food restaurant which is owned by an international company located in Mexico. Naomi is very angry with her supervisor, who has been making inappropriate sexual comments to her and other employees. Naomi decides to sue and retains a lawyer, Dominic. Dominic talks with the owners of the restaurant and is informed that Naomi signed an agreement to mediate and also to arbitrate any claims. Naomi informed Dominic about other employees who entered into such agreements and later complained of harassment. Dominic promises her that under federal law, he is legally entitled to get copies of all documents used during any other mediations and arbitrations and that he is also entitled to get detailed information regarding what was said and agreed upon by them. Dominic also tells Naomi that, while he is not going to bring it up now, if they so choose, Dominic and Naomi can avoid the arbitration agreement because under a new federal law, such agreements cannot be enforced if one of the companies involved is internationally based. He also tells Naomi in response to her question about the possibility of mediation in her case to forget it, because mediation is pretty much the same thing as arbitration. Dominic tells Naomi that an option is to arbitrate and, if the outcome is bad at arbitration, file a court action in federal court. Dominic says that the federal court judge would not consider an arbitrator's decision in making a determination. -Is Dominic correct that a federal law provides that arbitration agreements involving international businesses are unenforceable?

Which of the following is not a form of ADR?

Which of the following is true regarding arbitration in Brazil?

What was the result in the Case Opener in which an employee of Hooters complaining of sexual harassment attempted to avoid enforcement of a signed arbitration agreement?

If a party does not abide by an agreement reached in mediation, which of the following is true of the remedy?

[Salsa Sensations] Sofia, co-owner of a popular dance club called Salsa Sensations, discovered her co-owner and best friend, Renata, has been secretly pocketing cash receipts. Salsa Sensations' business is booming. Sofia meets Gordon, an attorney. Gordon advises Sofia that she should engage in ADR instead of filing a lawsuit against Renata because it would be faster and cheaper than litigation. -Which of the following would typically not be part of a mediation between Sofia and Renata?

[Sexual harassment ADR] Naomi works at a fast-food restaurant which is owned by an international company located in Mexico. Naomi is very angry with her supervisor, who has been making inappropriate sexual comments to her and other employees. Naomi decides to sue and retains a lawyer, Dominic. Dominic talks with the owners of the restaurant and is informed that Naomi signed an agreement to mediate and also to arbitrate any claims. Naomi informed Dominic about other employees who entered into such agreements and later complained of harassment. Dominic promises her that under federal law, he is legally entitled to get copies of all documents used during any other mediations and arbitrations and that he is also entitled to get detailed information regarding what was said and agreed upon by them. Dominic also tells Naomi that, while he is not going to bring it up now, if they so choose, Dominic and Naomi can avoid the arbitration agreement because under a new federal law, such agreements cannot be enforced if one of the companies involved is internationally based. He also tells Naomi in response to her question about the possibility of mediation in her case to forget it, because mediation is pretty much the same thing as arbitration. Dominic tells Naomi that an option is to arbitrate and, if the outcome is bad at arbitration, file a court action in federal court. Dominic says that the federal court judge would not consider an arbitrator's decision in making a determination. -Assuming the Uniform Mediation Act applies, did Dominic correctly tell Naomi that mediation is nearly the same as arbitration?

[MegaTron] Emilia filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) , alleging that her employer, MegaTron, failed to promote her because of her nationality and gender. The EEOC had already received several discrimination charges from other employees alleging similar conduct by MegaTron. When Emilia was hired, she signed an employment contract with a clause stating that all work-related claims must be resolved through arbitration. -If the EEOC filed an enforcement lawsuit based on the allegations of Emilia and other employees, what would a court likely do?

[Jade Shoes] Coleman owns a sporting goods store and has purchased top-quality, brand-name athletic shoes from Jade's Shoe Distribution for many years, but they have no written contract in place. Last month, Coleman learned that the latest shipment from Jade's are not authentic, brand-name shoes but instead a knock-off brand that costs a fraction of the price Coleman pays. Coleman cannot sell these shoes because his customers would know the difference, and Coleman demanded Jade refund him. Jade sent Coleman a written request for arbitration within thirty days. In response, Coleman called Jade, threatening to file a lawsuit against Jade and exposing her company as a fraud. Jade laughs, saying Coleman is required to arbitrate their dispute within thirty days. -If Coleman and Jade agree to arbitrate their dispute with the American Arbitration Association, which of the following statements would be false about their selection of an arbitrator?

Courts are generally critical and unsupportive of ADR methods.

Which of the following is true in regard to precedent in relation to law in general and arbitration?