Arbitration Over Coffee

Starbucks is in a dispute with Kraft regarding their agreement to distribute Starbucks coffee.  Starbucks believes that Kraft has not stood up to its end of the bargain in its promotion of their product.  As such, the companies are on track to arbitrate the dispute which is purported to be a dispute that could involve over $1 billion. 

Arbitration, in this context, could only be a good move for Kraft.  One can only imagine what a jury might think about Starbucks concerns of low sales in this economy, particularly since the jury pools are more flush with the unemployed these days.


Workplace Investigations

A quick internet search can locate thousands of articles about settlements and verdicts involving employee misconduct.  Among the misconduct are stories of harassment and discrimination.  If you read enough of the details behind the headlines, there are some patterns of what an employer did or did not do that led to the trouble.

Many times, big awards on personnel matters come because the employer did not take some action when first confronted with a complaint that harassment or discrimination was occurring.  Sometimes the allegations “go away,” but often they do only through luck.

Employers are becoming more mindful of how to monitor their workplaces and how to address personnel concerns early, in efforts to minimize liability risks.  One of the ways employers are responding is by conducting workplace investigations, whether performed by a qualified employee or by a third-party investigator.   A workplace investigation can help an employer explain why a problem doesn’t exist in the workplace or to identify what the problem is in the workplace so that it can be addressed.

When a third-party conducts the investigation, the results of the report often are less vulnerable to claims of bias or catering to the “boss’s” interests.   Where the results may be newsworthy, a third-party investigator also may be a better option than an internal investigator because the investigator’s relationship to the matter is short-term and less prone to come at the issue with established opinions of the witnesses, knowledge of (and perhaps loyalty to) political alliances, and a developed interpretation of history, etc. that a current employee may hold. 

Workplace investigations by a third-party come with additional costs.  However, the costs may be a great investment in your workplace.

Foreclosure Mediation

Several states, such as New Jersey and Nevada, and local governments (e.g., Washington, DC)  have instituted mandatory mediation prior to the foreclosure on residential properties.  It’s an interesting move that has helped individuals remain in their homes “a little longer,” but it has come nowhere near its intended purpose.

As seen in Nevada’s recent push to revise its foreclosure mediation program and from anecdotal evidence from New Jersey mediators, the creditors (usually banks) have arrived at these forced mediations generally in bad faith.   That is the rub. 

For mediation to work, the parties must be willing to resolve the dispute, but with some meaningful sacrifice in order to reach a compromise.  For an institutional bank, these mediations are simply procedural nuisances.  That line of thinking should be revisited as the ability for individuals to purchase even the most bargain-basement properties is dwindling and economic recovery remains years out.  

For a business-minded bank, these mediations should be viewed as a real opportunity FOR business.  Since banks have essentially become property management companies, why not:

  • convert the home owners into temporary renters? 
  • condition the transition on holding any personal or business accounts with their bank?
  • require the home owner to seek loans from their bank first (nearly a right of first refusal)?
  • require the home owner to “restart” payments on the mortgage, in its current form, on a date certain three years from now (whatever the mortgage rate was is almost certainly more lucrative than any competitive rate offered now)?

The what ifs of locking in future business seem promising enough to “do good” by a bad debtor, particularly when the option to foreclose remains and decreasing property values hurt the bank’s bottom line, too.

Mediate or Wait, Wait, Wait.

You’ve heard that phrase about a “speedy trial,” right?  You’ve also heard that everyone, including courts, are experiencing budget cuts, yes?   So, what does it mean?

First, it means that many folks are learning that speedy trials are guaranteed only to criminal defendants, not “civil claims” like breach of contract, divorce, etc. 

Secondly, the backlog of cases in courts has gotten so bad that, despite courts pushing civil matters aside, criminal defendants are potentially able to go free without any trial.  It means that civil suits can and will languish in courts for years before a judge gets to them.

Third, it means that ADR – whether arbitration or mediation – should be an obvious choice for resolution of disputes.  From a business perspective, resolving most litigation outside the courts is going to make financial sense and should make financial sense.

Tom Hanks & Arbitration

Perhaps it is not a surprise that Tom Hanks (and his wife, Rita Wilson) is involved in arbitration regarding a construction defect dispute. 

Hanks, by reputation and brand, is a nice guy.  Though he’s not known for being a hard-nosed bully, he also does not have a reputation for being spineless, either.   So, his use – by choice or contract – to engage in arbitration just becomes him.

Both the affluent and those in the public eye have increasingly resorted to alternative dispute resolution options, such as arbitration and mediation.  The reason?  Maybe confidentiality.  Maybe the convenience of not having to work around a judge’s or court’s calendar.  Maybe the potential for lower costs.

Maybe all of these reasons…Hanks certainly didn’t get to where he is for lack of smarts.

$20K Per Month In Child-Support

Child support is generally an ugly aspect of co-parenting.  Quantifying what a parent must pay in some respects is always going to be less than what he or she wants to contribute (or does contribute in actuality). 

The battle about child support is usually about what is actually affordable as a court-ordered amount and the discussions are often fraught with angst that the monies will be used to supplement the other parent’s lifestyle (and to the detriment of the paying parent’s lifestyle).  Enter Mel Gibson….

Mel Gibson, the movie-star who’s become less shiny these days, is in a heated battle with the mother of his youngest child.  The current battle involves the potential court order of $20,000 per month in child support.  The battle does beg a few contradictary questions:

1.  Does it take $20K per month to raise a child?

2.  In contrast to most parents’ wallets, shouldn’t Mel be paying proportionally much more?

What do you think?

Mediation Clauses in Business Contracts

If you own a business or “do business,” give serious consideration to adding a Mediation Clause to your contracts and agreements.  Nothing fancy, but something that provides a step in your dispute or resolution process that helps to avoid unnecessary litigation.

A simple mediation clause for contracts can be structured in myriad ways.  One form clause for consideration is:

“A party to this Agreement shall not commence legal proceedings against another party to this Agreement for breach or any other legal claim associated with or arising out of this agreement before first bringing the alleged breach or problem to the  other party’s attention in writing and seeking mediation.  If the alleged breach or problem is not  resolved to the parties’ satisfaction or if mediation is not scheduled within ten business days of this written notice, the aggrieved party may then pursue litigation.”

Of course, One Mediation also recommends that a list of preferred vendors for such mediation services be added to the clause, with One Mediation listed.

Taking Care of Mom at 80 is Hard Work, Particularly With Sibs

Mediation isn’t just for litigation.  Families are learning that mediation works for them, too.

Often, families had that “one person” who basically served as the mediator.  These days, families are no longer living together in the same town, having a weekly meal together, or close.  But, there remains the need for a person to help drive agreements and ground rules when issues arise, such as Elder Care issues.

Adult children are  finding that caring for Mom or Dad is complex.   Mental declines are scary.  Physical declines are a moving target.  Recognizing, accepting, and addressing those mental and physical changes are fairly difficult for most children to process.  Further, siblings – who all are shareholders in the decisions for parents – rarely process these changes at the same rate or come up with the same conclusion about what is in the parent’s best interests.

Aging is a costly proposition, as well.  In home care has costs, whether the care is from an unpaid relative or a paid professional.  Assisted living and extended care have price tags that rival college, but without the charm.  And, there are social ramifications with these options, as well. 

The situation is complex, and families are beginning to look to mediation as a welcome step in the elder care process.  For adult siblings, dynamics have been set in place for decades.  Grudges resurface.  Disagreements turn into impasse.  A facilitated discussion with a mediator helps clear the way through these pieces of emotional baggage to set a path for the future that is predictable, engages all shareholders, and promotes the parent’s (or parents’)  “best interests.” 

Families facing elder care issues should look at mediation as a necessary step in the care process, particularly when they know “the Talk” will not take place at Thanksgiving, as planned.

Methodists Say: Sexual Predators (Who Are Ministers) Beware!

The Catholic Church perhaps became an example of the negative publicity and damage that can befall a denomination that harbors rather than addresses its leaders who have engaged in sexual misconduct.   While somewhat of an oversimplification, the Catholic Church was accused of knowingly retaining priests (and others) who had sexually molested children and adults.  Worse, it was accused of placing these purported offenders in positions where the problem would and did continue – thereby increasing the number of victims.

The problem played out in the media and across the globe.  It was and continues to be ugly.  Recently, in fact, an Atlanta mega-church has suffered public allegations by multiple members that the head of this church molested them as children, taking advantage of their minority, vulnerability, and his position to do unspeakable things to them.   The threat of allegations is real.  The threat of other sexual predators within religious organizations is real, irrespective of denomination. 

In the United States, had the Catholic Church been a typical, private and non-religious entity, the legal risks associated with harboring a sexual harasser and perpetuating the scope of the problem would have captured at least the CFO’s imagination and created some sense of urgency to take action.   But, the Catholic Church was not Corporate America –  but the wisdom of thinking like a “real” corporation arguably has been learned there and other denominations have taken note.

The United Methodist Church has taken a stand on this issue of ministers engaging in inappropriate and improper sexual relationships with members.  What a difference the media coverage has been in contrast to the Catholic Church’s debacle. 

 The bottom line is that members of the clergy must think like Corporate America, provide training in their workplaces like Corporate America, and take allegations seriously in their workplaces (like most of Corporate America).  So long as humans make up a church, so too will human frailties exist in the church.   Ministers and pastors should take pains to study Human Resources as preparation for running the church’s business, and to take smart actions when allegations arise. 

The first step may be as simple as adding a solid Human Resources company to the “rolodex” that handles workplace investigations, such as One Mediation, and provides training.    An ounce of prevention is worth a pound of cure.