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National Rules for the Resolution of
Employment Disputes Reproduced with permission of the American
Arbitration Association Click here to view a summary of the most recent changes. INTRODUCTION Introduction
Federal and state laws reflecting societal intolerance for
certain workplace conduct, as well as court decisions interpreting and applying
those statutes, have redefined responsible corporate practice and employee
relations. Increasingly, employers and employees face workplace disputes
involving alleged wrongful termination, sexual harassment, or discrimination
based on race, color, religion, sex, national origin, age and disability. As courts and administrative agencies become less
accessible to civil litigants, employers and their employees now see
alternative dispute resolution (“ADR”) as a way to promptly and effectively
resolve workplace disputes. ADR procedures are becoming more common in
contracts of employment, personnel manuals and employee handbooks.
Increasingly, corporations and their employees look to the American Arbitration
Association as a resource in developing prompt and effective employment
procedures for employment-related disputes. These rules have been developed for employers and
employees who wish to use a private alternative to resolve their disputes,
enabling them to have complaints heard by an impartial person with expertise in
the employment field. These procedures benefit both the employer and the
individual employee by making it possible to resolve disputes without extensive
litigation. Role of the American Arbitration
Association
The American Arbitration Association, founded in 1926, is
a not-for-profit, public service organization dedicated to the resolution of
disputes through mediation, arbitration, elections, and other voluntary dispute
resolution procedures. Over 4,000,000 workers are now covered by
employment ADR plans administered by the AAA. In addition, the AAA provides education and training,
specialized publications, and research on all forms of dispute settlement.
With 36 offices nationwide and cooperative agreements with arbitral institutions
in 38 other nations, the American Arbitration Association is the nation's
largest private provider of ADR services. For seventy-five years, the American Arbitration
Association has set the standards for the development of fair and
equitable dispute resolution procedures. The development of the National
Rules for the Resolution of Employment Disputes, and the reconstitution of a
select and diverse roster of expert neutrals to hear and resolve disputes, are
the most recent initiatives of the Association to provide private, efficient and
cost-effective procedures for out-of-court settlement of workplace
disputes. Legal Basis of Employment ADR
Since the beginning of this decade, Congress has twice
reaffirmed the important role of ADR in the area of employment discrimination -
in the Americans with Disabilities Act in 1990, and a year later in Section 118
of the Civil Rights Act in 1991. While technically not dealing with a
contract of employment, the seminal court case dealing with the arbitration of
disputes relating to the non-union workplace is Gilmer v. Interstate/Johnson
Lane, 500 U.S. 20, 111 S.Ct. 1647 (1991). The Supreme Court refused to
invalidate Gilmer's agreement with the New York Stock Exchange that he would
arbitrate disputes with his employer (Interstate/ Johnson Lane) simply because
he was obliged to sign it in order to work as a securities dealer whose trades
were executed on the Exchange. Although the Gilmer Court found that the
Age Discrimination in Employment Act did not preclude arbitration of age
discrimination claims, it specifically declined to decide whether employment
arbitration agreements were the type of “contracts of employment” which are
not made enforceable by the Federal Arbitration Act. Since Gilmer, lower federal courts have generally enforced
employer-imposed ADR programs, as long as the programs are fair.
Some courts have held that the employee must have received adequate notice
of the program. However, the issue of binding arbitration programs
that are a condition of employment is still giving rise to litigation.
The Fairness Issue: The Due
Process Protocol
The Due Process Protocol for Mediation and
Arbitration of Statutory Disputes Arising Out of the Employment
Relationship was developed in 1995 by a special task force composed of
individuals representing management, labor, employment, civil rights
organizations, private administrative agencies, government, and the American
Arbitration Association. The Due Process Protocol, which was
endorsed by the Association in 1995, seeks to ensure fairness and equity in
resolving workplace disputes. The Due Process Protocol encourages
mediation and arbitration of statutory disputes, provided there are due process
safeguards. It conveys the hope that ADR will reduce delays caused by the
huge backlog of cases pending before administrative agencies and the courts.
The Due Process Protocol “recognizes the dilemma inherent in the timing of an
agreement to mediate and/or arbitrate statutory disputes” but does not take a
position on whether an employer can require a pre-dispute, binding arbitration
program as a condition of employment. The Due Process Protocol has been endorsed by
organizations representing a broad range of constituencies. They
include the American Arbitration Association, the American Bar Association Labor
and Employment Section, the American Civil Liberties Union, the Federal
Mediation and Conciliation Service, the National Academy of Arbitrators, and the
National Society of Professionals in Dispute Resolution. The
National Employment Lawyers Association has endorsed the substantive provisions
of the Due Process Protocol. It has been incorporated into the ADR
procedures of the Massachusetts Commission Against Discrimination (MCAD) and
into the Report of the United States Secretary of Labor's Task Force in
Excellence in State and Local Government. AAA's Employment ADR Rules
On June 1, 1996, the Association issued National Rules for
the Resolution of Employment Disputes. The rules reflected the guidelines
outlined in the Due Process Protocol and were based upon the AAA's California
Employment Dispute Resolution Rules, which were developed by a committee of
employment management and plaintiff attorneys, retired judges and arbitrators,
in addition to Association executives. The revised rules were developed
for employers and employees who wish to use a private alternative to resolve
their disputes. The rules enabled parties to have complaints heard by an
impartial person of their joint selection, with expertise in the employment
field. Both employers and individual employees benefit by having experts
resolve their disputes without the costs and delay of litigation.
The rules included procedures which ensure due process in both the mediation and
arbitration of employment disputes. After a year of use, the rules have
been amended to address technical issues. AAA's Policy on Employment ADR
The AAA's policy on employment ADR is guided by the state
of existing law, as well as its obligation to act in an impartial manner.
In following the law, and in the interest of providing an appropriate forum for
the resolution of employment disputes, the Association administers dispute
resolution programs which meet the due process standards as outlined in its
National Rules for the Resolution of Employment Disputes and the Due Process
Protocol. If the Association determines that a dispute resolution program
on its face substantially and materially deviates from the minimum due process
standards of the National Rules for the Resolution of Employment Disputes and
the Due Process Protocol, the Association may decline to administer cases under
that program. Other issues will be presented to the arbitrator for
determination. Notification
If an employer intends to utilize the dispute resolution
services of the Association in an employment ADR plan, it shall, at least thirty
(30) days prior to the planned effective date of the program: (1)
notify the Association of its intention to do so; and (2) provide the
Association with a copy of the employment dispute resolution plan.
If an employer does not comply with this requirement, the Association
reserves the right to decline its administrative services. Copies of all
plans should be sent to the American Arbitration Association's Office of Program
Development, 335 Madison Avenue, New York, NY 10017; FAX:
212-716-5913. Designing an ADR Program
The guiding principle in designing a successful
employment ADR system is that it must be fair in fact and perception.
The American Arbitration Association has considerable experience in
administering and assisting in the design of employment ADR plans, which gives
it an informed perspective on how to effectively design ADR systems, as well as
the problems to avoid. Its guidance to those designing employment ADR
systems is summarized as follows: •
The American Arbitration Association encourages employers to consider the wide
range of legally-available options to resolve workplace disputes outside the
courtroom. •
A special emphasis is placed by the Association on encouraging the development
of in-house dispute resolution procedures, such as open door policies, ombuds,
peer review, and internal mediation. •
The Association recommends an external mediation component to resolve
disputes not settled by the internal dispute resolution process. •
Programs which use arbitration as a final step may employ: -
pre-dispute, voluntary final and binding arbitration; -
pre-dispute, mandatory nonbinding arbitration; -
pre-dispute, mandatory final and binding arbitration; or -
post-dispute, voluntary final and binding arbitration. •
Although the AAA administers binding arbitration systems that have been required
as a condition of initial or continued employment, such programs must be
consistent with the Association's National Rules for the Resolution of
Employment Disputes and the Due Process Protocol. Specific guidance on the responsible development and
design of employment ADR systems is contained in the Association's publication,
Resolving Employment Disputes: A Practical Guide, which is available from
any AAA office. Alternative Dispute Resolution
Options
Open Door Policy: Employees are encouraged to meet
with their immediate manager or supervisor to discuss problems arising out of
the workplace environment. In some systems, the employee is free to
approach anyone in the chain of command. Ombuds: A neutral third party (either from within or
outside the company) is designated to confidentially investigate and propose
settlement of employment complaints brought by employees. Peer Review: A panel of employees (or employees and
managers) works together to resolve employment complaints. Peer review
panel members are trained in the handling of sensitive issues. Internal Mediation: A process for resolving disputes
in which a neutral third person from within the company, trained in mediation
techniques, helps the disputing parties negotiate a mutually acceptable
settlement. Mediation is a nonbinding process in which the parties discuss
their disputes with an impartial person who assists them in reaching a
settlement. The mediator may suggest ways of resolving the dispute but may
not impose a settlement on the parties. Fact-Finding: The investigation of a complaint by an
impartial third person (or team) who examines the complaint and the facts and
issues a non-binding report. Fact-finding is particularly helpful for
allegations of sexual harassment, where a fact-finding team, composed of
one male and one female neutral, investigates the allegations and presents
its findings to the employer and the employee. Arbitration: Arbitration is generally defined as the
submission of disputes to one or more impartial persons for final and binding
determination. It can be the final step in a workplace program that
includes other dispute resolution methods. There are many possibilities
for designing this final step. They include: Pre-Dispute, Voluntary Final
and Binding Arbitration: The parties agree in advance, on a voluntary
basis, to use arbitration to resolve disputes and they are bound by the outcome. Pre-Dispute, Mandatory
Nonbinding Arbitration: The parties must use the arbitration process to
resolve disputes, but they are not bound by the outcome. Pre-Dispute, Mandatory Final
and Binding Arbitration: The parties must arbitrate unresolved disputes
and they are bound by the outcome. Post-Dispute, Voluntary Final
and Binding Arbitration: The parties have the option of deciding whether
to use final and binding arbitration after a dispute arises. Types of Disputes Covered
The dispute resolution procedures contained in this
booklet can be inserted into an employee personnel manual, an employment
application of an individual employment agreement, or can be used for a specific
dispute. They do not apply to disputes arising out of collective
bargaining agreements. NATIONAL RULES FOR THE RESOLUTION
OF EMPLOYMENT DISPUTES
1. Applicable Rules of Arbitration The parties shall be deemed to have made these rules a
part of their arbitration agreement whenever they have provided for arbitration
by the American Arbitration Association (hereinafter “AAA”) or under its
National Rules for the Resolution of Employment Disputes. If a party
establishes that an adverse material inconsistency exists between the
arbitration agreement and these rules, the arbitrator shall apply these rules.
If, within thirty (30) days after the Association's
commencement of administration, a party seeks judicial intervention with respect
to a pending arbitration, the Association will suspend administration for sixty
(60) days to permit the party to obtain a stay of arbitration from the court. These rules, and any amendment of them, shall apply in the
form obtaining at the time the demand for arbitration or submission is received
by the AAA. An employer intending to incorporate these rules or to
refer to the dispute resolution services of the AAA in an employment ADR plan,
shall, at least thirty (30) days prior to the planned effective date of the
program: (i) notify the Association
of its intention to do so and, (ii) provide the Association with
a copy of the employment dispute resolution plan. Compliance with this requirement shall not preclude an
arbitrator from entertaining challenges as provided in Section 1. If an
employer does not comply with this requirement, the Association reserves the
right to decline its administrative services. 3. AAA as Administrator of
the Arbitration When parties agree to arbitrate under these rules, or when
they provide for arbitration by the AAA and an arbitration is initiated under
these rules, they thereby authorize the AAA to administer the arbitration. The
authority and duties of the AAA are prescribed in these rules, and may be
carried out through such of the AAA's representatives as it may direct. Arbitration shall be initiated in the following
manner. a. The
parties may submit a joint request for arbitration. b. In the
absence of a joint request for arbitration:
(i) The initiating party
(hereinafter “Claimant[s]”) shall: (1)
File a written notice (hereinafter “Demand”) of its intention to arbitrate
at any regional office of the AAA, within the time limit established by the
applicable statute of limitations if the dispute involves statutory rights.
If no statutory rights are involved, the time limit established by the
applicable arbitration agreement shall be followed. Any dispute over such
issues shall be referred to the arbitrator. The filing shall be made in
duplicate, and each copy shall include the applicable arbitration agreement. The
Demand shall set forth the names, addresses, and telephone numbers of the
parties; a brief statement of the nature of the dispute; the amount
in controversy, if any; the remedy sought; and requested hearing location.
(2) Simultaneously mail a copy of the
Demand to the party
(hereinafter “Respondent[s]”). (3)
Include with its Demand the applicable filing fee, unless the parties agree to
some other method of fee advancement. (ii)
The Respondent(s) shall file an Answer with the AAA within ten (10) days after
the date of the letter from the AAA acknowledging receipt of the Demand.
The Answer shall provide the Respondent's brief response to the claim and the
issues presented. The Respondent(s) shall make its filing in
duplicate with the AAA, and simultaneously shall mail a copy of the Answer to
the Claimant. (iii) The
Respondent(s): (1)
May file a counterclaim with the AAA within ten (10) days after the letter from
the AAA acknowledging receipt of the Demand. The filing shall be made in
duplicate. The counterclaim shall set forth the nature of the claim, the amount
in controversy, if any, and the remedy sought. (2)
Simultaneously shall mail a copy of any counterclaim to the Claimant. (3)
Shall include with its filing the applicable filing fee provided for by these
rules. (iv)
The Claimant may file an Answer to the counterclaim with the AAA within
ten (10) days after the date of the letter from the AAA acknowledging receipt of
the counterclaim. The Answer shall provide Claimant's brief response to
the counterclaim and the issues presented. The Claimant shall make its filing in
duplicate with the AAA, and simultaneously shall mail a copy of the Answer to
the Respondent(s). c. The
form of any filing in these rules shall not be subject to technical pleading
requirements. Before the appointment of the arbitrator, if either
party desires to offer a new or different claim or counterclaim, such party must
do so in writing by filing a written statement with the AAA and simultaneously
mailing a copy to the other party(s), who shall have ten (10) days from the date
of such mailing within which to file an answer with the AAA. After
the appointment of the arbitrator, a party may offer a new or different claim or
counterclaim only at the discretion of the arbitrator. 6. Administrative and Mediation
Conferences Before the appointment of the arbitrator, any party may
request, or the AAA, in its discretion, may schedule an administrative
conference with a representative of the AAA and the parties and/or their
representatives. The purpose of the administrative conference is to organize and
expedite the arbitration, explore its administrative aspects, establish the most
efficient means of selecting an arbitrator, and to consider mediation as a
dispute resolution option. There is no administrative fee for this service. At any time after the filing of the Demand, with the
consent of the parties, the AAA will arrange a mediation conference under its
Mediation Rules to facilitate settlement. The mediator shall not be any
arbitrator appointed to the case, except by mutual agreement of the parties.
There is no administrative fee for initiating a mediation under AAA Mediation
Rules for parties to a pending arbitration. The arbitrator shall have the authority to order such
discovery, by way of deposition, interrogatory, document production, or
otherwise, as the arbitrator considers necessary to a full and fair exploration
of the issues in dispute, consistent with the expedited nature of arbitration. 8. Arbitration Management
Conference As soon as possible after the appointment of the
arbitrator but not later than sixty (60) days thereafter, the arbitrator shall
conduct an Arbitration Management Conference with the parties and/or their
representatives, in person or by telephone, to explore and resolve matters that
will expedite the arbitration proceedings. The specific matters to be addressed
include:
(i) the issues to be arbitrated;
(ii) the date, time, place and
estimated duration of the hearing;
(iii) the resolution of outstanding
discovery issues and establishment of discovery parameters;
(iv) the law, standards, rules of evidence
and burdens of proof that are to apply to the proceeding;
(v) the exchange of stipulations and
declarations regarding facts, exhibits, witnesses and other issues;
(vi) the names of witnesses (including
expert witnesses), the scope of witness testimony, and witness exclusion; (vii) the value of bifurcating the
arbitration into a liability phase and damages phase; (viii) the need for a stenographic record;
(ix) whether the parties will summarize
their arguments orally or in writing;
(x) the form of the award;
(xi) any other issues relating to the
subject or conduct of the arbitration; (xii) the allocation of attorney's fees and
costs. The arbitrator shall issue oral or written orders
reflecting his or her decisions on the above matters and may conduct additional
conferences when the need arises. There is no AAA administrative fee for an Arbitration
Management Conference. 9. Location of the Arbitration The parties may designate the location of the arbitration
by mutual agreement. In the absence of such agreement before the
appointment of the arbitrator, any party may request a specific hearing location
by notifying the AAA in writing and simultaneously mailing a copy of the request
to the other party(s). If the AAA receives no objection within ten (10)
days of the date of the request, the hearing shall be held at the
requested location. If a timely objection is filed with the AAA, the AAA
shall have the power to determine the location and its decision shall be final
and binding. After the appointment of the arbitrator, the arbitrator shall
resolve all disputes regarding the location of the hearing. The arbitrator shall have the authority to set the date
and time of the hearing in consultation with the parties. 11. Qualifications to Serve as
Arbitrator and Rights of Parties to Disqualify Arbitrator
a. Standards of Experience and
Neutrality (i)
Arbitrators serving under these rules shall be experienced in the field of
employment law. (ii)
Arbitrators serving under these rules shall have no personal or financial
interest in the results of the proceedings in which they are appointed and shall
have no relation to the underlying dispute or to the parties or their counsel
that may create an appearance of bias. (iii)
The roster of available arbitrators will be established on a non-discriminatory
basis, diverse by gender, ethnicity, background and qualifications. (iv)
The Association may, upon request of a party or upon its own initiative,
supplement the list of proposed arbitrators in disputes arising out of
individually negotiated employment contracts with persons from the regular
Commercial Roster, to allow the Association to respond to the particular needs
of the dispute. In multi-arbitrator disputes, at least one of the
arbitrators shall be experienced in the field of employment law.
b. Standards of Disclosure by
Arbitrator Prior to accepting appointment,
the prospective arbitrator shall disclose all information that might be relevant
to the standards of neutrality set forth in this Section, including but not
limited to service as a neutral in any past or pending case involving any of the
parties and/or their representatives or that may prevent a prompt hearing.
c. Disqualification for Failure
To Meet Standards of Experience and Neutrality An arbitrator may be
disqualified in two ways: (i) No later
than ten (10) days after the appointment of the arbitrator, all parties jointly
may challenge the qualifications of an arbitrator by communicating their
objection to the AAA in writing. Upon receipt of a joint objection, the
arbitrator shall be replaced. (ii) Any
party may challenge the qualifications of an arbitrator by communicating its
objection to the AAA in writing. Upon receipt of the objection, the AAA either
shall replace the arbitrator or communicate the objection to the other parties.
If any party believes that the objection does not merit disqualification of the
arbitrator, the party shall so communicate to the AAA and to the other parties
within ten (10) days of the receipt of the objection from the AAA. Upon
objection of a party to the service of an arbitrator, the AAA shall determine
whether the arbitrator should be disqualified and shall inform the parties of
its decision, which shall be conclusive. 12. Number and Appointment of
Neutral Arbitrators a. If the
parties do not specify the number of arbitrators, the dispute shall be heard and
determined by one arbitrator. If the parties cannot agree upon the number of
arbitrators, the AAA shall have the authority to determine the number of
arbitrators. b. If the
parties have not appointed an arbitrator and have not provided any method of
appointment, the arbitrator shall be appointed in the following manner:
(i) Immediately after it
receives the Demand, the AAA shall mail simultaneously to each party a letter
containing an identical list of the names of all arbitrators who are members of
the regional Employment Dispute Resolution Roster.
(ii) Each party shall have ten (10)
days from the date of the letter in which to select the name of a mutually
acceptable arbitrator to hear and determine their dispute. If the parties
cannot agree upon a mutually acceptable arbitrator, they shall so notify the
AAA. Within ten (10) days of the receipt of that notice, the AAA shall
send the parties a shorter list of arbitrators who are members of the regional
Employment Dispute Resolution Roster. Each party shall have ten (10) days
from the date of the letter containing the revised list to strike any names
objected to, number the remaining names in order of preference, and return the
list to the AAA. If a party does not return the list within the time
specified, all of the listed persons shall be deemed acceptable to that party.
(iii) The AAA shall invite the acceptance of
the arbitrator whom both parties have selected as mutually acceptable or, in the
case of resort to the ranking procedure, the arbitrator who has received the
highest rating in the order of preference that the parties have specified.
(iv) If the parties fail to agree on any of
the persons whom the AAA submits for consideration, or if mutually acceptable
arbitrators are unable to act, or if for any other reason the appointment cannot
be made from the list of persons whom the AAA submits for consideration, the AAA
shall have the power to make the appointment from among other members of the
Roster without the submission of additional lists. If for any reason an arbitrator is unable to perform the
duties of the office, the AAA may, on proof satisfactory to it, declare the
office vacant. The vacancy shall be filled in accordance with applicable
provisions of these Rules. In the event of a vacancy in a panel of neutral
arbitrators after the hearings have commenced, the remaining arbitrator or
arbitrators may continue with the hearing and determination of the controversy,
unless the parties agree otherwise. Any party may be represented by counsel or other
authorized representative. For parties without representation the AAA
will, upon request, provide reference to institutions which might offer
assistance. A party who intends to be represented shall notify the other
party and the AAA of the name and address of the representative at least ten
(10) days prior to the date set for the hearing or conference at which that
person is first to appear. If a representative files a Demand or an Answer, the
obligation to give notice of representative status is deemed satisfied. Any party desiring a stenographic record shall make
arrangements directly with a stenographer and shall notify the other parties of
these arrangements at least three days in advance of the hearing. The requesting
party or parties shall pay the cost of the record. If the transcript is agreed
by the parties, or determined by the arbitrator to be the official record of the
proceeding, it must be provided to the arbitrator and made available to the
other parties for inspection, at a date, time, and place determined by the
arbitrator. Any party wishing an interpreter shall make all
arrangements directly with the interpreter and shall assume the costs of the
service. The arbitrator shall have the authority to exclude
witnesses, other than a party, from the hearing during the testimony of any
other witness. The arbitrator also shall have the authority to decide whether
any person who is not a witness may attend the hearing. The arbitrator shall maintain the confidentiality of the
arbitration and shall have the authority to make appropriate rulings to
safeguard that confidentiality, unless the parties agree otherwise or the law
provides to the contrary. The arbitrator: (1) may postpone any hearing upon the
request of a party for good cause shown; (2) must postpone any hearing upon the
mutual agreement of the parties; and (3) may postpone any hearing on his or her
own initiative. Before proceeding with the first hearing, each arbitrator
may take an oath of office and, if required by law, shall do so. The arbitrator
may require witnesses to testify under oath administered by any duly qualified
person and, if it is required by law or requested by any party, shall do so. All decisions and awards of the arbitrators must be by a
majority, unless the unanimous decision of all arbitrators is expressly required
by the arbitration agreement or by law. 22. Order of Proceedings and
Communication with Arbitrators A hearing shall be opened by: (1) filing the oath of the
arbitrator, where required; (2) recording the date, time, and place of the
hearing; (3) recording the presence of the arbitrator, the parties, and their
representatives, if any; and (4) receiving into the record the Demand and the
Answer, if any. The arbitrator may, at the beginning of the hearing, ask for
statements clarifying the issues involved. The parties shall bear the same burdens of proof and
burdens of producing evidence as would apply if their claims and counterclaims
had been brought in court. Witnesses for each party shall submit to direct and cross
examination as approved by the arbitrator. With the exception of the rules regarding the allocation
of the burdens of proof and going forward with the evidence, the arbitrator has
the authority to set the rules for the conduct of the proceedings and
shall exercise that authority to afford a full and equal opportunity to
all parties to present any evidence that the arbitrator deems material and
relevant to the resolution of the dispute. Documentary and other forms of physical evidence, when
offered by either party, may be received in evidence by the arbitrator. The names and addresses of all witnesses and a description
of the exhibits in the order received shall be made a part of the record. There shall be no ex parte communication with the
arbitrator, unless the parties and the arbitrator agree to the contrary in
advance of the communication. 23. Arbitration in the Absence of
a Party or Representative Unless the law provides to the contrary, the arbitration
may proceed in the absence of any party or representative who, after due notice,
fails to be present or fails to obtain a postponement. An award shall not be
based solely on the default of a party. The arbitrator shall require the
party who is in attendance to present such evidence as the arbitrator may
require for the making of the award. The parties may offer such evidence as is relevant and
material to the dispute and shall produce such evidence as the arbitrator deems
necessary to an understanding and determination of the dispute. An arbitrator or
other person authorized by law to subpoena witnesses or documents may do so upon
the request of any party or independently. The arbitrator shall be the judge of the relevance and
materiality of the evidence offered, and conformity to legal rules of evidence
shall not be necessary. The arbitrator may in his or her discretion direct
the order of proof, bifurcate proceedings, exclude cumulative or irrelevant
testimony or other evidence, and direct the parties to focus their presentations
on issues the decision of which could dispose of all or part of the case.
All evidence shall be taken in the presence of all of the arbitrators and all of
the parties, except where any party is absent, in default, or has waived the
right to be present. 25. Evidence by Affidavit or
Declaration and Post-Hearing Filing of Documents or Other Evidence The arbitrator may receive and consider the evidence of
witnesses by affidavit, but shall give it only such weight as the
arbitrator deems it entitled to after consideration of any objection made to its
admission. If the parties agree or the arbitrator directs that
documents or other evidence may be submitted to the arbitrator after the
hearing, the documents or other evidence shall be filed with the AAA for
transmission to the arbitrator, unless the parties agree to a different method
of distribution. All parties shall be afforded an opportunity to examine such
documents or other evidence and to lodge appropriate objections, if any. 26. Inspection or Investigation An arbitrator finding it necessary to make an inspection
or investigation in connection with the arbitration shall direct the AAA to so
advise the parties. The arbitrator shall set the date and time, and the AAA
shall notify the parties. Any party who so desires may be present during the
inspection or investigation. In the event that one or all parties are not
present during the inspection or investigation, the arbitrator shall make an
oral or written report to the parties and afford them an opportunity to comment. At the request of any party, the arbitrator may take
whatever interim measures he or she deems necessary with respect to the dispute,
including measures for the conservation of property. Such interim measures may be taken in the form of an
interim award and the arbitrator may require security for the costs of such
measures. The arbitrator shall specifically inquire of all
parties whether they have any further proofs to offer or witnesses to be
heard. Upon receiving negative replies or if satisfied that the record is
complete, the arbitrator shall declare the hearing closed. If briefs are to be filed, the hearing shall be declared
closed as of the final date set by the arbitrator for the receipt of briefs. If
documents are to be filed as provided in Section 25 and the date set for their
receipt is later than that set for the receipt of briefs, the later date shall
be the date of closing the hearing. The time limit within which the
arbitrator is required to make the award shall commence to run, in the absence
of other agreements by the parties, upon closing of the hearing. The hearing may be reopened by the arbitrator upon the
arbitrator's initiative, or upon application of a party for cause shown, at any
time before the award is made. If reopening the hearing would prevent the making
of the award within the specific time agreed on by the parties in the contract(s)
out of which the controversy has arisen, the matter may not be reopened unless
the parties agree on an extension of time. When no specific date is fixed in the
contract, the arbitrator may reopen the hearing and shall have thirty (30) days
from the closing of the reopened hearing within which to make an award. The parties may provide, by written agreement, for the
waiver of oral hearings in any case. If the parties are unable to agree as to
the procedure, the AAA shall specify a fair and equitable procedure. 31. Waiver of Objection/Lack of
Compliance with These Rules Any party who proceeds with the arbitration after
knowledge that any provision or requirement of these rules has not been complied
with, and who fails to state objections thereto in writing, shall be deemed to
have waived the right to object. The parties may modify any period of time by mutual
agreement. The AAA or the arbitrator may for good cause extend any period of
time established by these Rules, except the time for making the award. The AAA
shall notify the parties of any extension. Each party shall be deemed to have consented that any
papers, notices, or process necessary or proper for the initiation or
continuation of an arbitration under these Rules; for any court actions in
connection therewith; or for the entry of judgment on an award made under these
procedures may be served on a party by mail addressed to the party or its
representative at the last known address or by personal service, in or outside
the state where the arbitration is to be held. The AAA and the parties may also use facsimile
transmission, telex, telegram, or other written forms of electronic
communication to give the notices required by these Rules. a. The
award shall be made promptly by the arbitrator and, unless otherwise agreed by
the parties or specified by law, no later than thirty (30) days from the date of
closing of the hearing or, if oral hearings have been waived, from the date of
the AAA's transmittal of the final statements and proofs to the arbitrator. b. An
award issued under these rules shall be publicly available, on a cost basis. The
names of the parties and witnesses will not be publicly available, unless a
party expressly agrees to have its name made public in the award. c. The
award shall be in writing and shall be signed by a majority of the arbitrators
and shall provide the written reasons for the award unless the parties agree
otherwise. It shall be executed in the manner required by law. d. The
arbitrator may grant any remedy or relief that the arbitrator deems just
and equitable, including any remedy or relief that would have been available to
the parties had the matter been heard in court. The arbitrator shall, in the
award, assess arbitration fees, expenses, and compensation as provided in
Sections 38, 39, and 40 in favor of any party and, in the event any
administrative fees or expenses are due the AAA, in favor of the
AAA. e. The
arbitrator shall have the authority to provide for the reimbursement of
representative's fees, in whole or in part, as part of the remedy, in accordance
with applicable law. f.
If the parties settle their dispute during the course of the arbitration, the
arbitrator may set forth the terms of the settlement in a consent award. g. The
parties shall accept as legal delivery of the award the placing of the award or
a true copy thereof in the mail, addressed to a party or its representative at
the last known address, personal service of the award, or the filing of the
award in any manner that may be required by law. h. The
arbitrator's award shall be final and binding. Judicial review shall be
limited, as provided by law. Within twenty (20) days after the transmittal of an
award, any party, upon notice to the other parties, may request the arbitrator
to correct any clerical, typographical, technical or computational errors in the
award. The arbitrator is not empowered to redetermine the merits of any claim
already decided. The other parties shall be given ten (10) days to respond
to the request. The arbitrator shall dispose of the request within twenty
(20) days after transmittal by the AAA to the arbitrator of the request and any
response thereto. If applicable law requires a different procedural time
frame, that procedure shall be followed. 36. Release of Documents for Judicial
Proceedings The AAA shall, upon the written request of a party,
furnish to the party, at that party's expense, certified copies of any papers in
the AAA's case file that may be required in judicial proceedings relating to the
arbitration. 37. Judicial Proceedings and Exclusion
of Liability a. No
judicial proceeding by a party relating to the subject matter of the
arbitration shall be deemed a waiver of the party's right to arbitrate. b. Neither
the AAA nor any arbitrator in a proceeding under these rules is or shall be
considered a necessary or proper party in judicial proceedings relating to the
arbitration. c. Parties
to these procedures shall be deemed to have consented that judgment upon the
arbitration award may be entered in any federal or state court having
jurisdiction. d. Neither
the AAA nor any arbitrator shall be liable to any party for any act or omission
in connection with any arbitration conducted under these procedures. As a not-for-profit organization, the AAA shall prescribe
filing and other administrative fees to compensate it for the cost of providing
administrative services. The AAA administrative fee schedule in effect at the
time the demand for arbitration or submission agreement is received shall be
applicable. AAA fees shall be paid in accordance with the
Administrative Fee Schedule (see pages 32-35) The AAA may, in the event of extreme hardship on any
party, defer or reduce the administrative fees. (To ensure that you have the
most current information, see our Web site at www.adr.org). Unless otherwise agreed by the parties, the expenses of
witnesses for either side shall be borne by the party producing such witnesses.
All expenses of the arbitration, including required travel and other expenses of
the arbitrator, AAA representatives, and any witness and the costs relating to
any proof produced at the direction of the arbitrator, shall be borne by the
employer, unless the parties agree otherwise or unless the arbitrator directs
otherwise in the award as provided for in the Administrative Fee Schedule. 40. Neutral Arbitrator's
Compensation Arbitrators shall charge a rate consistent with the
arbitrator's stated rate of compensation. If there is disagreement
concerning the terms of compensation, an appropriate rate shall be established
with the arbitrator by the AAA and confirmed to the parties. Any arrangement for the compensation of a neutral
arbitrator shall be made through the AAA and not directly between the parties
and the arbitrator. Payment of the arbitrator's fees and expenses shall be
made by the AAA from the fees and moneys collected by the AAA for this purpose. The AAA may require deposits in advance of any hearings
such sums of money as it deems necessary to cover the expenses of the
arbitration, including the arbitrator's fee, if any, and shall render an
accounting and return any unexpended balance at the conclusion of the case. 42. Interpretation and Application of
Rules The arbitrator shall interpret and apply these rules as
they relate to the arbitrator's powers and duties. When there is more than one
arbitrator and a difference arises among them concerning the meaning or
application of these Rules, it shall be resolved by a majority vote. If that is
not possible, either an arbitrator or a party may refer the question to the AAA
for final decision. All other procedures shall be interpreted and applied by the
AAA. For disputes arising out of
employer-promulgated plans: ADMINISTRATIVE FEE SCHEDULE
For disputes arising out of employer-promulgated plans:
Administrative Fee
The AAA's administrative fees are based on filing and
service charges. Arbitrator compensation is not included in this schedule. Unless
the employee chooses to pay a portion of the arbitrator’s compensation, such
compensation shall be paid in total by the employer. Arbitrator compensation and
administrative fees are not subject to reallocation by the arbitrator(s) except
upon the arbitrator’s determination that a claim or counterclaim was filed for
purposes of harassment or is patently frivolous. Filing Fees
In cases before a single arbitrator, a nonrefundable
filing fee capped in the amount of $125, is payable in full by the employee when
a claim is filed, unless the plan provides that the employee pay less. A
nonrefundable fee in the amount of $375 is payable in full by the employer,
unless the plan provides that the employer pay more. In cases before three or more arbitrators, a nonrefundable
filing fee capped in the amount of $125, is payable in full by the employee when
a claim is filed, unless the plan provides that the employee pay less. A
nonrefundable fee in the amount of $1,375 is payable in full by the employer,
unless the plan provides that the employer pay more. Hearing Fees
For each day of hearing held before a single arbitrator,
an administrative fee of $300 is payable by the employer. For each day of hearing held before a multi-arbitrator
panel, an administrative fee of $500 is payable by the employer. There is no AAA hearing fee for the initial Arbitration
Management Conference. Postponement/Cancellation Fees
A fee of $150 is payable by a party causing a postponement
of any hearing scheduled before a single arbitrator. A fee of $250 is payable by a party causing a postponement
of any hearing scheduled before a multi-arbitrator panel. Hearing Room Rental
The hearing fees described above do not cover the rental
of hearing rooms, which are available on a rental basis. Check with the
administrator for availability and rates. Hearing room rental fees will be borne
by the employer. Suspension for Nonpayment
If arbitrator compensation or administrative charges have
not been paid in full, the administrator may so inform the parties in order that
one of them may advance the required payment. If such payments are not
made, the arbitrator may order the suspension or termination of the proceedings.
If no arbitrator has yet been appointed, the administrator may suspend the
proceedings. For disputes arising out of
individually-negotiated employment agreements and contracts The AAA's Commercial Fee Schedule, listed on pages 34
& 35, will apply to disputes arising out of individually-negotiated
employment agreements and contracts, even if such agreements and contracts
reference or incorporate an employer-promulgated plan. Any questions or
disagreements about whether a matter arises out of an employer-promulgated plan
or an individually-negotiated agreement or contract shall be determined by the
AAA and its determination shall be final. Administrative Fee
The administrative fees of the AAA are based on the amount
of the claim or counterclaim. Arbitrator compensation is not included in this
schedule. Unless the parties agree otherwise, arbitrator compensation and
administrative fees are subject to allocation by the arbitrator in the award. Fees
A nonrefundable initial filing fee is payable in full by a
filing party when a claim, counterclaim or additional claim is filed. A case service fee will be incurred for all cases that
proceed to their first hearing. This fee will be payable in advance at the time
that the first hearing is scheduled. This fee will be refunded at the conclusion
of the case if no hearings have occurred. However, if the Association is not notified at least 24
hours before the time of the scheduled hearing, the case service fee will remain
due and will not be refunded. These fees will be billed in accordance with the following
schedule:
*Contact your local AAA office for fees for claims in
excess of $10 million. ** This fee is applicable when no amount can be stated at
the time of filing, or when a claim or counterclaim is not for a monetary
amount. The fees are subject to increase or decrease when the claim or
counterclaim is disclosed.
The minimum fees for any case having three or more arbitrators are $2,750 for
the filing fee, plus a $1,000 case service fee. Parties on cases held in abeyance for one year by
agreement, will be assessed an annual fee of $300. If a party refuses to pay the
assessed fee, the other party or parties may pay the entire fee on behalf of all
parties, otherwise the matter will be closed. The fees described above do not cover the rental of
hearing rooms, which are available on a rental basis. Check with the AAA for
availability and rates. Whenever, by provision in an employment dispute resolution
program, or by separate submission, the parties have provided for mediation or
conciliation of existing or future disputes under the auspices of the American
Arbitration Association (hereinafter “AAA”) or under these rules, they shall
be deemed to have made these rules, as amended and in effect as of the date of
the submission of the dispute, a part of their agreement. Any party to an employment dispute may initiate mediation
by filing with the AAA a submission to mediation or a written request for
mediation pursuant to these rules, together with the applicable administrative
fee. A request for mediation shall contain a brief statement of
the nature of the dispute and the names, addresses, and telephone numbers of all
parties to the dispute and those who will represent them, if any, in the
mediation. The initiating party shall simultaneously file two copies of the
request with the AAA and one copy with every other party to the dispute. Upon receipt of a request for mediation, the AAA will
appoint a qualified mediator to serve. Normally, a single mediator will be
appointed unless the parties agree otherwise or the AAA determines otherwise. If
the agreement of the parties names a mediator or specifies a method of
appointing a mediator, that designation or method shall be followed. No person shall serve as a mediator in any dispute
in which that person has any financial or personal interest in the result of the
mediation, except by the written consent of all parties. Prior to accepting an
appointment, the prospective mediator shall disclose any circumstance likely to
create a presumption of bias or prevent a prompt meeting with the parties. Upon
receipt of such information, the AAA shall either replace the mediator or
immediately communicate the information to the parties for their comments. In
the event that the parties disagree as to whether the mediator shall serve, the
AAA will appoint another mediator. The AAA is authorized to appoint another
mediator if the appointed mediator is unable to serve promptly. If any mediator shall become unwilling or unable to serve,
the AAA will appoint another mediator, unless the parties agree otherwise. Any party may be represented by a person of the party's
choice. The names and addresses of such persons shall be communicated in writing
to all parties and to the AAA. 8. Date, Time, and Place of
Mediation The mediator shall fix the date and the time of each
mediation session. The mediation shall be held at the appropriate regional
office of the AAA, or at any other convenient location agreeable to the mediator
and the parties, as the mediator shall determine. 9. Identification of Matters in
Dispute At least ten (10) days prior to the first scheduled
mediation session, each party shall provide the mediator with a brief
memorandum setting forth its position with regard to the issues that need to be
resolved. At the discretion of the mediator, such memoranda may be mutually
exchanged by the parties. At the first session, the parties will be expected to
produce all information reasonably required for the mediator to understand the
issues presented. The mediator may require any party to supplement such
information. The mediator does not have the authority to impose a
settlement on the parties but will attempt to help them reach a satisfactory
resolution of their dispute. The mediator is authorized to conduct joint and
separate meetings with the parties and to make oral and written recommendations
for settlement. Whenever necessary, the mediator may also obtain expert advice
concerning technical aspects of the dispute, provided that the parties agree and
assume the expenses of obtaining such advice. Arrangements for obtaining such
advice shall be made by the mediator or the parties, as the mediator shall
determine. The mediator is authorized to end the mediation whenever,
in the judgment of the mediator, further efforts at mediation would not
contribute to a resolution of the dispute between the parties. Mediation sessions are private. The parties and their
representatives may attend mediation sessions. Other persons may attend only
with the permission of the parties and with the consent of the mediator. Confidential information disclosed to a mediator by the
parties or by witnesses in the course of the mediation shall not be
divulged by the mediator. All records, reports, or other documents received by a
mediator while serving in that capacity shall be confidential. The mediator
shall not be compelled to divulge such records or to testify in regard to the
mediation in any adversary proceeding or judicial forum. The parties shall maintain the confidentiality of the
mediation and shall not rely on, or introduce as evidence in any arbitral,
judicial, or other proceeding: a. views
expressed or suggestions made by another party with respect to a possible
settlement of the dispute; b.
admissions made by another party in the course of the mediation proceedings; c.
proposals made or views expressed by the mediator; or d. the
fact that another party had or had not indicated willingness to accept a
proposal for settlement made by the mediator. There shall be no stenographic record of the mediation
process. The mediation shall be terminated: a. by the
execution of a settlement agreement by the parties; b. by a
written declaration of the mediator to the effect that further efforts at
mediation are no longer worthwhile; or c. by a
written declaration of a party or parties to the effect that the mediation
proceedings are terminated. Neither the AAA nor any mediator is a necessary party
in judicial proceedings relating to the mediation. Neither the AAA nor any mediator shall be liable to any
party for any act or omission in connection with any mediation conducted under
these rules. 16. Interpretation and Application
of Rules The mediator shall interpret and apply these rules insofar
as they relate to the mediator's duties and responsibilities. All other rules
shall be interpreted and applied by the AAA. The expenses of witnesses for either side shall be paid by
the party producing such witnesses. All other expenses of the mediation,
including required traveling and other expenses of the mediator and
representatives of the AAA, and the expenses of any witness and the cost of any
proofs or expert advice produced at the direct request of the mediator, shall be
borne equally by the parties unless they agree otherwise. MEDIATION FEE SCHEDULE
The nonrefundable case set-up fee is $150 per party. An
AAA administrative fee of $75 per every hour of conference time spent by the
mediator is also charged. The $150 nonrefundable case set-up fees will be
applied toward the AAA administrative fee. In addition, the parties are
responsible for compensating the mediator at his or her published rate, for
conference and study time (hourly or per diem). All expenses are generally borne equally by the parties.
The parties may adjust this arrangement by agreement. Before the commencement of the mediation, the AAA shall
estimate anticipated total expenses. Each party shall pay its portion of that
amount as per the agreed upon arrangement. When the mediation has terminated,
the AAA shall render an accounting and return any unexpendable balance to the
parties. Rules, forms, procedures and guides are subject to periodic change and updating. To ensure that you have the most current information, see our World Wide Web home page at www.adr.org ©2002 American Arbitration Association. All Rights
Reserved.
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