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Impartial Umpire Rules for Arbitration of Impasses Between Trustees of Joint Employee Benefit Trust Funds
As amended and Effective January 1, 1988
Sponsored by the International Foundation of Employee Benefit Plans

Reproduced with permission of the American Arbitration Association 
335 Madison Avenue, Floor 10, New York, NY 10017-4605 
Phone 212-716-5800.

Introduction

Section 302(c)(5)(B) of the Labor-Management Relations Act of 1947 (29 U.S.C. Section 186(c)(5)(B)) authorizes jointly managed pension funds to be established and maintained subject to certain requirements.

One such requirement is that the employees and employers must be equally represented in the administration of the fund, and that "in the event the employer and employee groups deadlock on the administration of such fund and there are no neutral persons empowered to break such deadlock, [the written agreement with the employer] provides that the two groups shall agree on an impartial umpire to decide such dispute, or in the event of their failure to agree within a reasonable length of time, an impartial umpire to decide such dispute shall, on petition of either group, be appointed by the district court...."

The American Arbitration Association administers a National Panel of Arbitrators which includes individuals competent to serve as the statutory "umpire" in such disputes, and has prepared this set of rules for such cases to provide a speedy, efficient and just procedure for resolution of such disputes.

Trustees may validly adopt such rules in advance to govern in the event of trustee deadlock, and they may wish to do so before a particular dispute or impasse arises in order to avoid delay and uncertainty over procedures at that time.

Such delay and uncertainty can be avoided by incorporating into the agreement and declaration of trust, or other joint trust agreement to which employers and labor representatives subscribe, a provision such as the following clause:

In the event that the employer and employee groups of trustees deadlock on any question of the administration of the fund, the trustees shall, upon written application of the employer trustees or the labor trustees, submit such dispute to an impartial umpire in accordance with the American Arbitration Association's Impartial Umpire Rules for Arbitration of Impasses Between Trustees of Joint Employee Benefit Trust Funds. The decision of said umpire shall be final, binding and conclusive upon the trustees and all persons concerned.

The fee of the impartial umpire and the American Arbitration Association, together with such other costs and expenses as may be authorized by the trustees, shall be proper charges against the fund, which the trustees are authorized to pay.

Indeed, the parties may wish to go further and adopt the above rules not only for a deadlock on a "question of administration," which must be arbitrated, but for resolution of deadlocks or disputes on any matter coming before them for decision.

Impartial Umpire Rules for Arbitration of Impasses Between Trustees of Joint Employee Benefit Trust Funds

1. When Applicable

These Rules shall apply when any jointly administered trust agreement provides for submission of a dispute to an impartial umpire or arbitrator (hereafter, "the arbitrator") by or in accordance with the Impartial Umpire Rules of the American Arbitration Association (hereinafter the "AAA"), or when trustees otherwise duly submit a dispute in accordance with such rules, or to the extent adopted by an arbitrator appointed under 29 U.S.C. 186(c)(5)(B).

2. Name of Tribunal

Any Tribunal constituted by the parties for the settlement of their dispute under these Rules shall be called the Joint Trustee Deadlock Arbitration Tribunal.

3. Administrator

When an arbitration is initiated under these rules, the AAA is thereby constituted administrator of the arbitration. The authority and obligations of the administrator are prescribed in these rules, in plan documents and any relevant written agreement of the parties.

4. Delegation of Duties

The duties of the AAA under these rules may be carried out through Tribunal Administrators, or such other officers or committees as the AAA may direct.

5. National Panel of Arbitrators

The AAA National Panel of Arbitrators shall include individuals competent to hear and resolve trustee disputes and deadlocks under jointly administered trust fund plans.

6. Office of Tribunal

The general office of a Tribunal is the headquarters of the AAA, which may, however, assign the administration of an arbitration to any of its Regional Offices.

7. Request for Appointment

A written request to appoint a neutral arbitrator(s) under these pro9cedures may be made to any office of the AAA and should contain a statement of the matter in dispute or deadlock and the names and addresses of the trustees who shall be designated to receive notices hereunder. It should be accompanied by a copy of the trust agreement and the appropriate fee as provided in the Administrative Fee Schedule.

8. Number of Arbitrators

The dispute shall be heard and determined by one arbitrator, unless the parties agree otherwise. Whenever there is more than one arbitrator, all decisions and awards of the arbitrators must be by at least a majority.

9. Appointment From Panel

If the trustees have not provided any other method of appointment, after the filing of the request for the appointment of a neutral arbitrator, the AAA will submit simultaneously to each group of employer and union trustees an identical list of names of not less than five persons chosen from the panel, with a brief biographical profile and fee policy of each. Each group of trustees shall have 14 days from the mailing date within which to cross off any names of arbitrators that are unacceptable, number the remaining names in order of preference, and return the list to the AAA. If a list is not returned within the time specified, all persons named theron shall be deemed acceptable. From among the persons who have been approved on both lists and in accordance with the designated order of mutual preference, the AAA shall invite a neutral arbitrator to server.

If there is no agreement upon any of the persons named, if acceptable arbitrators are unable to serve, or if for any other reason the appointment cannot be made from the submitted lists, the AAA shall have the power to make the appointment from among other members of the Panel without the submission of any additional lists.

10. Notice to Arbitrator of Appointment

Notice of the appointment of the neutral arbitrator, whether appointed by the parties or by the AAA, shall be mailed to the arbitrator by the AAA, together with a copy of these Rules. The signed acceptance of the arbitrator shall be filed prior to the opening of the first hearing.

11. Place of Hearing

If mutual agreement cannot be reached as to the place of hearing, the hearings shall be held in the city where the trust fund has its principal office.

12. Impartiality

The neutral arbitrator selected to serve under these rules shall be impartial. A person appointed as neutral arbitrator shall disclose to the AAA any circumstances likely to affect impartiality, including any bias or any financial or personal interest in the result of the arbitration or any past or present relationship with the parties or their counsel. Upon receipt of such information from such arbitrator or other source, the AAA shall communicate such information to the parties, and, if it deems it appropriate to do so, to the arbitrator and others. Thereafter, the AAA shall determine whether the arbitrator should be disqualified and shall inform the parties of its decision, which shall be conclusive.

13. Vacancies

If any arbitrator should resign, die, withdraw, refuse, be disqualified, or be unable to perform the duties of the office, the AAA shall, on proof satisfactory to it, declare the office vacant. Vacancies shall be filled in a manner consistent with the original appointment and the matter shall be reheard unless it has been mutually agreed otherwise.

14. Administrative Conferences

At the request of the parties or at the request of the AAA or the arbitrator, administrative conferences will be held among the Administrator and the parties and/or their counsel and, with the consent of both parties, the arbitrator to discuss matters which will expedite the arbitration including, but not limited to venue, clarification of issues, marking documentary exhibits, stipulations to uncontested facts, resolution of preliminary evidentiary questions, and preparation of prehearing memoranda, if any.

15. Time and Place

Subject to Section 11 of these rules, the neutral arbitrator shall fix the time and place for each hearing. The AAA shall mail to each group of trustees notice thereof at least 14 days in advance, unless such notice is waived or modified by mutual agreement.

16. Stenographer and Interpreter

When a stenographer or interpreter is requested, the requesting party shall make the necessary arrangements for the taking of a stenographic record or for the services of an interpreter. The costs of such services shall be paid as provided in Section 42 of these procedures.

17. Representation by Counsel

Each group of trustees may be represented by counsel or other authorized representative.

18. Attendance at Hearings

All trustees are entitled to attend hearings. It shall be discretionary wit the neutral arbitrator to determine the propriety of the attendance of any other person at any time during the hearings.

19. Oaths

Before proceeding with the first hearing or with the examination of the file, each arbitrator shall take an oath of office. Witnesses shall testify under oath administered by any duly qualified person if required by law or demanded by either party.

20. Adjournments

The arbitrator may grant adjournments upon the request of a party or upon the arbitrator's own initiative and shall do so when all of the parties agree.

21. Order of Proceedings

The neutral arbitrator shall have discretion to determine all matters relating to the hearings, including the order of proceedings.

22. Evidence

The parties may offer such evidence as they desire and shall produce such additional evidence as the arbitrator may deem necessary to understanding and determination of the dispute. The arbitrator may subpoena witnesses or documents upon the arbitrator's own initiative or upon the request of any party. The arbitrator shall be the judge of the relevancy, materiality and competency of the evidence offered, and conformity to legal rules of evidence shall not be necessary. All evidence shall be taken in the presence of all the arbitrators and of all the parties, except where any of the parties is absent by reason of default or has waived the right to be present. Each group of trustees shall be afforded full and equal opportunity for presentation of relevant proofs.

23. Evidence by Affidavit

The arbitrator may receive the evidence of witnesses by affidavit, and give it only such weight as the arbitrator deems appropriate after consideration of any objections made to its admission.

24. Filing of Documents

All documents not filed with the arbitrator at the hearing, but arranged for at the hearing or subsequently by agreement of the parties, shall be filed with the AAA for transmission to the arbitrator. All parties shall be afforded opportunity to examine such documents.

25. Arbitration in the Absence of a Party

The arbitration may proceed in the absence of any party who, after due notice, fails to be present or fails to obtain an adjournment. An award shall not be made solely on the default of a party, but the arbitrator shall require the party who is present to submit such evidence as the arbitrator may require for the making of an award.

26. Closing of Hearings

When the arbitrator is satisfied that neither party has further evidence to offer, the arbitrator shall declare the hearings closed. If briefs are to be filed, the hearings 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 for herein 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 hearings. 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 the closing of the hearings.

27. Reopening of Hearings

The hearings may be reopened on the motion of the arbitrator or upon application of a party at any time before the award is made. If the reopening of the hearing would prevent the making of the award within the specific time agreed upon by the parties in the document out of which the controversy has arisen, the matter may not be reopened, unless the parties agree upon the extension of such time limit. When no specific date is fixed in the document, the arbitrator may reopen the hearings, and the arbitrator shall have thirty days from the closing of the reopened hearings within which to make an award.

28. Hearing on Documents Only

The parties may agree in writing to waive an arbitration hearing. A hearing on documents only shall be conducted pursuant to these procedures, and the administrative filing fee shall apply.

29. Time of Decision

The decision of the neutral arbitrator shall be made promptly and, unless otherwise mutually agreed by each group of trustees, no later than thirty days from the date of closing the hearings.

30. Form of Decision

The decision shall be in writing and shall be signed either by the sole arbitrator or by at least a majority if there be more than one. Unless otherwise mutually agreed, it shall be accompanied by an opinion explaining the basis upon which it was made.

31. Scope of Arbitrator's Authority

The arbitrator's authority to grant any remedy or relief shall be limited to deciding the dispute over which the parties deadlocked.

32. Award Upon Settlement

If the parties settle their dispute during the course of the arbitration, the arbitrator, upon their request, may set forth the terms of the agreed settlement in an award. Such an award is referred to as a consent award.

33. Communication with Arbitrator

There shall be no communication between the parties and the neutral arbitrator other than at the oral hearings or prehearing conferences. Any other oral or written communications from the parties to such arbitrator shall be directed to the AAA for transmittal, unless the parties expressly agree otherwise.

34. Service of Notices

Each party to an arbitration under these rules 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 and for any court action in connection therewith or for the entry of judgment on any award made thereunder may be served upon such party by mail addressed t such party or its attorney at its last known address or by personal service, within or outside the jurisdiction where the arbitration is to be held (whether such party be within or outside the United States of America), provided that reasonable opportunity to be heard with regard thereto has been granted such party.

35. Delivery of Award

Parties shall accept as legal delivery of the award the placing of the award or a true copy thereof in the mail by the AAA, addressed to such party at its last known address or to its attorney, or personal service of the award, or the filing of the award in any manner which may be prescribed by law.

36. Release of Documents for Judicial Proceedings

The AAA shall, upon the written request of a party or the arbitrator, furnish to such person, at that person's expense, certified facsimiles of any papers in the AAA's possession that may be required in judicial proceedings relating to the arbitration.

37. Judicial Proceedings and Exclusion of Liability

(a) Neither the AAA nor any arbitrator in a proceeding under these rules is a necessary party in judicial proceedings relating to the arbitration.

(b) 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 rules.

38. Extensions of Time

By mutual agreement, the parties may modify any period of time established by these rules. The AAA for good cause may extend any  period of time established by these rules, except the time for making the award. The AAA shall notify the parties of any such extension of time and its reason therefor.

39. Waiver of Procedures

Any party who proceeds with the arbitration after knowledge that any provision or requirement of these rules has not been complied with and fails to state objection thereto in writing shall be deemed to have waived the right to interpose such objection.

40. Deposits

The AAA may require the parties to deposit in advance such sums of money as it deems necessary to defray the expense of the arbitration, including the arbitrator's fee, and shall render an accounting to the parties and return any unexpended balance.

41. Arbitrator's Fee

Unless mutually agreed otherwise, a neutral arbitrator shall be compensated at an agreed-upon per diem for each hearing, for the making of the award, and for the preparation of the accompanying opinion. Any arrangements for the compensation of a neutral arbitrator shall be made though the AAA and not directly by him or her. In the absence of agreement between the parties, an appropriate rate will be established by the Association.

42. Expenses

(a) The expenses of witnesses for either side (including the cost of an interpreter) shall be paid by the party producing such witnesses (or interpreter).

(b) The cost of the stenographic record, if any, is made, and all transcripts thereof, shall be prorated equally among all parties ordering copies, unless they otherwise agree, and paid by the responsible parties directly to the reporting agency.

(c) All other expenses of the arbitration, including required traveling and other expenses of the neutral arbitrator and of the AAA representatives, and the expenses of any witnesses and the costs of any proofs produced at the direct request of the neutral arbitrator, shall be borne equally by the parties, unless they have agreed otherwise. Unless the parties have agreed otherwise in writing, the arbitrator shall have no authority to assess fees, costs, expenses and arbitrator compensation against any party, and the parties shall share equally in such fees, costs, expenses and compensation.

43. Interpretation and Application of Rules

The neutral arbitrator shall interpret and apply these rules insofar as they relate to the powers and duties of the arbitrator. All other rules shall be interpreted and applied by the AAA.

44. Administrative Fees

As a not-for-profit organization, the AAA shall prescribe an Administrative Fee Schedule, a Refund Schedule and a Schedule of Other Service Charges to compensate it for the cost of providing administrative services. The schedule in effect, at the time of filing, refunding or service shall be applicable. The administrative fees shall be advanced by the initiating party or parties, subject to final apportionment by the arbitrator in the award. When a matter is withdrawn or settled, the refund shall be made in accordance with the Refund Schedule. The AAA, in the event of extreme hardship on the part of any party, may defer or reduce the administrative fee.

For cases filed on or after January 1, 1988:

Administrative Fee Schedule

A filing fee of $300 will be paid at the time a case is filed. The balance of the administrative fee is based on the amount of each claim and counterclaim as disclosed when the claim or counterclaim is filed. This balance is due and payable 90 days after the AAA's commencement of administration, or prior to the date of the first hearing, whichever occurs first. If a case is settled or withdrawn, the Refund Schedule shall apply. When oral hearings are waived, the Administrative Fee Schedule shall still apply.

Amount of Claim Fee
$1 to $25,000 3% ($300 minimum)
$25,000 to $50,000 $750 plus 2% of excess over $25,000
$50,000 to $100,000 $1,250 plus 1% of excess over $50,000
$100,000 to $200,000 $1,750 plus 1/2% of excess over $100,000
$200,000 to $5,000,000 $2,250 plus 1/4% of excess over $200,000
$5,000,000 to $50,000,000 $14,250 plus 1/10% of excess over $5,000,000

Where the claim or counterclaim exceeds $50 million, there is no additional administrative fee.

When no amount can be stated at the time of filing, the administrative fee is $750, subject to adjustment in accordance with the above schedule as soon as an amount can be disclosed.

In those claims and counterclaims which are not for a monetary amount, an appropriate administrative fee will be determined by the AAA.

If there are more than two parties represented in the arbitration, an additional 10% of the administrative fee will be due for each additional represented party.

Adjournment Fees

Sole Arbitrator Cases

$50 is payable by a party first causing an adjournment of any scheduled hearing.

$100 is payable by a party causing its second or subsequent adjournment of any scheduled hearing.

Three Arbitrator Cases

$75 is payable by a party first causing an adjournment of any scheduled hearing.

$150 is payable by a party causing its second or subsequent adjournment of any scheduled hearing.

Additional Hearing Fees

$75 is payable by each party for each hearing after the first hearing that is either clerked by the AAA or held in a hearing room provided by the AAA.

Refund Schedule

The Refund Schedule is based on the administrative fee due on a claim or counterclaim asserted by a party.

If the AAA is notified that a case has been settled or withdrawn before a list of arbitrators has been sent out, all of the fee in excess of $300 will be refunded.

If the AAA is notified that a case has been settled or withdrawn before the original due date for the return of the first list, two-thirds of the fee in excess of $300 will be refunded.

If the AAA is notified that a case has been settled or withdrawn during or following an administrative conference or at least two business days before the initial date and time set for the first hearing, one-third of the fee in excess of $300 will be refunded.

There will be no refund after a preliminary hearing or mediation conference has been held; where a claim or counterclaim was filed as an undetermined claim and remained so at the time of settlement or withdrawal; or where a consent award was issued by the arbitrators.

1998 American Arbitration Association. All Rights Reserved.

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