Vol. 3, No. 3, Fall 1996

At its annual meeting in Grand Rapids on September 18, 1996, the ADR Section elected the following officers for 1996-1997:

Chairperson: Laurence D. Connor

Chairperson-Elect: James M. Alexander

Secretary: Michael P. Coakley

Treasurer: Amy J. Glass

Chairperson Connor is a senior litigation member at Dykema Gossett PLLC in Detroit where he specializes in complex business and tort litigation and alternative dispute resolution. He has served as a mediator and arbitrator in numerous private and court sponsored programs, is a member of the panel of Distinguished Neutrals of the CPR Institute for Dispute Resolution, and has authored several articles on alternative dispute resolution.

Chairperson-Elect Alexander is a shareholder in the firm of Foster, Swift, Collins and Smith of Farmington Hills. He is chairman of the Commercial Arbitration Advisory Board for the American Arbitration Association, co-chairperson of the Legislative Committee of the Oakland County Bar Association, and has served as chairman of the Republican Committee of Oakland County from 1988 through 1994. He specializes in governmental relations, commercial litigation and arbitration.

Secretary Coakley is a principal in the Detroit office of Miller, Canfield, Paddock and Stone, P.L.C. where he practices commercial litigation and arbitration. He is an arbitrator for the New York Stock Exchange, Inc., the National Association of Securities Dealers, the American Stock Exchange, Inc., and the Chicago Board Options Exchange.

Treasurer Glass is the president of Michigan Mediation and Arbitration Services located in Kalamazoo. She is a certified mediator for the U.S. District Court for the Western District of Michigan and the Michigan Court of Appeals, and serves on the national commercial and labor employment panels for the American Arbitration Association.

Also elected to the Council were three new members to fill open positions:

Carole Crosby is a partner at Jacob and Weingarten in Troy where she is engaged in general commercial practice with an emphasis on real estate and construction. She is a public arbitrator for the National Association of Securities Dealers as well as the American Arbitration Association, and is a Circuit Court and District Court mediator in Oakland County.

Daniel J. Hoekenga is a senior member of Hoekinga and Farrell, P.C. of Southfield. He has extensive experience in labor and employment law, representing both labor and management employees in the public and private sectors.

Richard L. Hurford is Associate Corporate Counsel at Masco Corporation in Taylor. Prior to joining Masco, he practiced labor and employment relations law as a partner at Dykema Gossett PLLC in Detroit for 15 years.

The Council will hold regular meetings in October, December, January, March, May and July during the coming year. The mid-year Section meeting, featuring an extensive ADR program, will be held April 11 and 12, 1997. Anyone wishing to bring matters before the Council should contact Chairperson Connor at (313) 568-6573 or Secretary Coakley at (313) 496-7531.

Acting pursuant to a written agency-wide policy promulgated in 1995, the Detroit District Office of the Federal Equal Employment Opportunity Commission has announced the adoption of a voluntary facilitative mediation program to resolve charges of employment discrimination. The commission commenced operation of the program on October 1, 1996.

According to Rosalie Tucker, ADR Administrator for the Detroit District, the office will review all charges filed with it and select those it believes may be appropriate for mediation. Mediation will then be offered to both the charging party and the employer. If both parties agree (the process is strictly voluntary), the district office will refer the charge to an independent mediator not associated with the agency who will conduct the mediation away from the EEOC offices.

The mediation process will be confidential. No record will be made of the mediation session, nothing disclosed during mediation can be used if the case is not settled, and the mediator cannot be called by either side to testify during an EEOC investigation or in court. If a case is settled as a result of mediation, the EEOC will dismiss the charge. If the complaint is not settled, it will be sent back to the investigative unit to pursue in its original "place in line" so that no delay will be sustained by the parties having gone through mediation.

The EEOC believes the program will benefit both employers and employees. Charges that are settled by mediation will not have to undergo the lengthy investigative process. According to Tucker, most mediation programs report settlement rates above 80%, and the mediation of employment disputes has been found to substantially reduce the time, cost and aggravation associated with most charges. In the Detroit program, employers will be charged a modest fee Ñ normally less than the cost of responding to an investigation request Ñ to fund the process.

A brochure fully describing the program will be available from the Detroit District Office shortly. Anyone interested in the program should contact Rosalie Tucker, ADR Administrator, at (313) 226-4087; fax (313) 226-6584.

By Alan Kanter, Jonathan T. Walton, Jr. and Laura Shippard Stafford

This past July, the Michigan Supreme Court issued its opinion in Heurtebise v. Reliable Business Computers, Inc., No. 102019 (July 16, 1996). The case began in Wayne County Circuit Court where Heurtebise, a former employee of Reliable, alleged that the termination of her employment constituted sex discrimination in violation of the Elliott-Larsen Civil Rights Act. Prior to the start of her employment, as with all Reliable employees, Heurtebise had been provided with a copy of Reliable's Employee Handbook and was asked to review it and sign the Employee Acknowledgement page, confirming her obligation to learn, and her intent to be bound by Reliable's employment policies. The handbook contained a binding arbitration clause which, in effect, provided that all employment related disputes between an employee and Reliable involving claims of monetary damages would be arbitrated by a three-member arbitration panel under the applicable American Arbitration Association rules.

Reliable filed a motion to dismiss the complaint, or in the alternative, to require that the case be arbitrated in accordance with the handbook provision. The court denied Reliable's motion, ostensibly on the grounds that the arbitration provision violated public policy, and that the provision was, in the judge's view, ambiguous.

Reliable sought interlocutory leave to appeal in the Michigan Court of Appeals. Granting such leave, in Heurtebise v. Reliable Business Computers, Inc., 207Mich App 308, 523 NW2d 904 (1994), the Court of Appeals reversed the circuit court, holding that there was no public policy against arbitrating civil rights claims, and that the arbitration clause was not ambiguous. The Court of Appeals further held that the handbook's "at will" disclaimer language, which included statements that the handbook did not create any individual or personal employment contract, applied only to the duration of employment, and did not affect the enforceability of the handbook. After Heurtebise's motion for rehearing and/or reconsideration in the Court of Appeals was denied, Heurtebise sought leave to appeal in the Michigan Supreme Court, which was granted.

In its decision, reversing the Court of Appeals, the Supreme Court concentrated primarily on the "at will" disclaimer language, together with an introductory provision in which the employer specifically reserved the right to modify employment policies in the future. The Supreme Court concluded that this handbook language evidenced Reliable's intent not to be bound by the handbook. Consequently, the Supreme Court concluded, the handbook did not create a binding and enforceable agreement to arbitrate. On September 16, 1996, the court entered an order denying Reliable's Motion for Rehearing.

The Supreme Court's decision has significant implications relevant to practitioners of both alternative dispute resolution and employment law in Michigan.

In the alternative dispute resolution arena, the most significant unanswered question is whether an otherwise enforceable arbitration agreement or provision can require arbitration of alleged civil rights violations by the employer, or whether public policy will always preclude requiring arbitration of such claims. The majority of the court declined to address this issue. A lengthy minority opinion, written by Justice Cavanagh, who was joined by Justices Levin and Mallett, would have held that with respect to an individual's civil rights claims, Michigan's public policy should not permit enforcement of a prospective waiver of access to a judicial forum and a jury trial. Consequently, if the minority view is ever adopted, prospective waivers of the right to a judicial forum (and a jury trial) even if contained in an otherwise valid arbitration contract or provision, will be held unenforceable. This is directly contrary to the U.S. Supreme Court's ruling in Gilmer v. Interstate-Johnson Lane, 500 US20,111 SCt1647, 114LEd2d26 (1991), and raises significant preemption concerns. Such an outcome may also prevent arbitration of employment-related disputes across the board. An aggrieved employee, desiring to avoid arbitration, need only allege the existence of a possible civil rights violation. Similar questions may arise relative to the arbitrability of other statutory state law claims, particularly where the statute provides for or permits circuit court jurisdiction.

The Supreme Court decision also raises significant unanswered questions as to the continued viability of prior rulings concerning arbitration of employment disputes between employers and employees, and the enforceability of employee handbook provisions in general. Beginning in 1980 with Touissant v. Blue Cross & Blue Shield of Michigan, 408Mich479, 292NW2d880 (1980), Michigan employers were permitted to "avoid the perils of jury trial" by providing for binding arbitration. In 1986, in Renny v. Port Huron Hospital, 427Mich415, 398NW2d327 (1986), the Michigan Supreme Court reaffirmed the enforceability of employer-mandated binding arbitration clauses, provided the dispute resolution procedures selected were fair and afforded the parties adequate protections and safeguards. Michigan appellate courts have also consistently held that the employer's policies could create enforceable rights for both employers and employees. In 1990, the Michigan Court of Appeals in Carlson v. Hutzel Hospital Corp. of Mich., 183 MichApp508, 455 NW2d 335 (1990), lv den 437Mich493 (1991), held that a provision for mandatory alternative dispute resolution in the employer's manual was enforceable, even in the absence of mutual assent by the employee.

Given this prior law, why did the Supreme Court in Heurtebise determine that the mandatory arbitration provision was unenforceable? Was it because of the nature of the claim (i.e., an Elliott-Larsen civil rights claim)? Was it appropriate or reasonable for the Supreme Court to focus on only two phrases in an introductory paragraph contained in a 60-plus page handbook to determine whether or not the employer intended to be bound? Would the court also hold that because of the disclaimer, the employer was not contractually bound to provide non-regulated benefits described in the same handbook to employees? Why, in light of more recent Supreme Court decisions regarding enforceability and the right to change employment policies, did the court fail to address the ramifications of the employee's actual prior knowledge and specific agreement to abide by the employer's rules, procedures and policies, including the mandatory arbitration provision?

In the general employment law area, a number of significant issues have now arisen which are certain to perplex employment attorneys. If an employee handbook contained at-will disclaimer language or reservation of the right to modify policy language, will any handbook provision be deemed enforceable? As the Michigan Supreme Court in Heurtebise held that such provisions clearly indicate an intent on the part of the employer not to be bound by handbook provisions, is there any point or value in requiring employees to review handbooks, to learn and abide by employer policies, and to acknowledge in writing their familiarity with such policies?

Perhaps the most disturbing aspect of the Heurtebise decision was the Michigan Supreme Court's apparent disinclination to adhere to its earlier decisions which have specifically held that an employer must have the freedom to modify policies in order to react to changing market and economic conditions. Dumas v. Auto Club of Michigan, 437Mich521, 473NW2d652 (1991). Should it now be concluded that the employer may no longer clarify or even modify policies relative to its own business, a right specifically recognized by the Supreme Court in In Re Certified Question, 432Mich438, 443NW2d112 (1989)?

After the Heurtebise decision, can employers now assume that an employee's specific acknowledgement, execution, and delivery of a document indicating that the employee will comply with the employer's rules be irrelevant for the purposes of determining whether or not employer handbook provisions are enforceable? In Scholz v. Montgomery Ward & Company, 437Mich83, 468 NW2d845 (1991), the Supreme Court held that the employee's consent agreement to comply with the employer's policies or policy changes was not necessary to enforce those policies. In light of Scholz, and now Heurtebise, is an employer in a stronger position by omitting handbook language communicating the employer's right to change policies in the future?

An issue not dealt with by the majority, but addressed in the minority opinion, was whether or not the Michigan Supreme Court decision will ultimately be determined incorrect by virtue of application of the doctrine of conflict preemption based upon recent United States Supreme Court decisions which appear to require a contrary result under the Federal Arbitration Act.

While many of the issues created by the Heurtebise decision cannot presently be resolved, it may well be that the winds supporting Michigan's long-standing public policy favoring arbitration have begun to shift. The Heurtebise decision may turn out to be only the beginning of a line of decisions which preclude, limit, or condition the applicability of arbitration clauses and agreements. Similarly, the Supreme Court's interpretation of the introductory paragraphs of the employee handbook, as necessarily indicating an intent on the part of the employer not to be bound by any part of the handbook provisions, may herald the coming of a higher standard of review in any contract which purports to limit, condition, or eliminate any statutorily created rights. Only time will tell.

Alan Kanter practices with Shapack, McCullough & Kanter in Southfield, Michigan, where he specializes in cable television law. He also serves as corporate counsel for a large number of privately-held business entities. He is currently an active member of the Labor Law, Computer Law, Arts, Entertainment & Sports, and ADR sections of the State Bar of Michigan. Kanter represented Reliable Business Computers, Inc., throughout the featured litigation.

Walton & Stafford, P.C. specializes in representing businesses in litigation. Jonathan T. Walton, Jr., practices in all areas of commercial and corporate litigation. Laura Sheppard Stafford's practice is concentrated in corporate, commercial, and products liability litigation. Mr. Walton and Ms. Stafford cooperated with Mr. Kanter on the brief to the Michigan Supreme Court on behalf of Reliable Business Computers, Inc.

The ADR Newsletter is published by the ADR Section of the State Bar of Michigan. For additional information, please contact Laurence D. Connor, ADR Section chairperson and a member of the law firm of Dykema Gossett PLLC; he can be reached by phone at 313.568.6573, by fax at 313.568.6658 or by e-mail at lconnor@dykema.com.

The ADR Newsletter

Vol. 4, No. 1, Winter 1997

Section Announces Mid-Year Meeting Plans

The ADR Section will hold its Sixth Annual Mid-Year Meeting on Friday and Saturday, April 11 and 12, 1997 at the Marriott Hotel in Livonia, Michigan. Professor Dwight Golann of Suffolk University, Boston, will return to lead a program on mediation skills-building and advanced topics. The program will feature lectures on the principles of mediation from both the mediator's and client advocate's perspective, as well as interactive exercises involving the participants in mediation simulations. Additionally, Professor Golann will address advanced topics in mediation, such as the use of evaluation and decision analysis to break negotiating stalemates.

Professor Golann is a nationally known mediation trainer and mediator. Under the auspices of the CPR Institute for Dispute Resolution, he led the well-received mediation training program at the Section's Mid-Year meeting in 1995. He has recently published a comprehensive text on mediating legal disputes. (See accompanying article on Page 2.)

The cost for the program is $120 for members, $130 for non-members, and $110 for lawyers in practice less than two years. The program includes a continental breakfast, lunch, and the seminar each day as well as a reception with Professor Golann on Friday evening.

Because of the nature of the program, space is limited. Reservations can be made by completing the registration form on

page 3 of this newsletter. Overnight accommodations should be reserved directly with the Marriott Hotel by calling (313) 462-3100.

For further information, contact Amy J. Glass of Michigan Mediation and Arbitration Services at (616) 342-9046.

The Oakland County Bar Association - Adams Pratt Foundation has announced a series of educational programs and dialogue on ADR which will be open to the public.

On Thursday, February 27 from 7:30 - 9:00 a.m., K.C. Hortop, Senior Staff Counsel at Chrysler Corporation, Frank W. Jackson, Assistant General Counsel at Blue Cross/Blue Shield of Michigan, and Mary A. Bedikian, Regional Vice President of the American Arbitration Association, will lead a discussion on "ADR Programs for Employment Disputes - After Heurtebise."

On Tuesday, March 11 at 4:30 p.m., Chief Judge Richard A. Enslen of the U.S. District Court for the Western District of Michigan will present an address entitled "Mediation in a Federal Court: A Success Story." The address will be followed at 6:30 p.m. by a reception and dinner.

On Thursday, April 10 from 7:30 - 9:00 a.m., Oakland Circuit Judges Sosnick, Breck and Schnelz will join Judith Cunningham, Circuit Court Administrator, to discuss "Triage - ADR Options in Oakland County Circuit Court." Chief Judge Sosnick will speak on the topic of "Towards a Coordinated Approach to Dispute Resolution." Judge Breck will present "Summary Jury Trials: A Neglected Solution." Judge Schnelz will address "Removing ÔThe Adversarial' from Divorce Conflicts" and Judith Cunningham will present "Facilitation and Case Triage."

The final session will be held on Friday, May 9 from 7:30 - 9:00 a.m. and will feature Tom Dyze, General Counsel of Walbridge Aldinger Company, and William Booth of Plunkett Cooney discussing the use of mini trials and dispute review boards in a program entitled "Resolving Construction Disputes - Beyond Arbitration."

All programs will be held at the MSU Management Education Center, 811 W. Square Lake Rd., Troy, Michigan 48098. The telephone number is (810) 879-2456. The cost for all programs is $20 pre-registered, and $25 at the door. The combined cost for the seminar, reception and dinner with Judge Enslen on March 11 is $45 through pre-registration only by March 7.

For more information or to register, contact the Oakland County Bar Association, 1760 S. Telegraph, Ste. 100, Bloomfield Hills, Michigan 48302-0181.

The Courts administering facilitative mediation programs in Michigan during the past year have announced positive results, indicating the likelihood of the programs' continued or expanded use.

The United States District Court for the Western District of Michigan instituted a facilitative mediation program in 1996. A recent analysis of results reflects a 76% settlement rate for cases utilizing the program. Additionally, surveys from participants indicate a strong support for the program, monetary savings to parties, and earlier resolution of cases than had facilitative mediation not been used. The voluntary program is funded through administrative fees paid by the parties and direct payment by the parties to the mediator for services. Mediators are trained and qualified by the Court.

In the Michigan Court of Appeals settlement pilot programs, cases were selected for mandatory mediation by the Court and assigned to trained, voluntary neutrals called "moderators." The results reflected a nearly 40% settlement rate for cases in the program, substantially higher than non-mediated cases. More importantly, many of the cases settled were extensive documentation complex cases (known as "big box"cases) whose disposition substantially reduced the time and cost of processing. The Court estimates approximately 500 cases per year could be settled through mediation. Armed with these statistics, and a better understanding of which cases are appropriate for mediation, the Court is now seeking funding for payment of moderators so that the program can be made permanent.

"Mediating Legal Disputes - Effective Strategies for Lawyers and Mediators"

by Dwight Golann

Little, Brown and Company, 1996

Reviewed by Laurence D. Connor

Professor Dwight Golann1 has produced a timely, comprehensive and eminently useful book on the rapidly growing practice of mediating legal disputes. Written primarily from the mediator's perspective, the work will also be valuable to lawyers representing clients in mediation and others who wish to gain an insight into the process.

"Mediating Legal Disputes" addresses not only the theory and principles of mediation but, more importantly, the "how to" of the practice. Professor Golann's considerable talents as a mediator trainer come through as he lucidly explains a process that many practitioners have thought cannot be grasped without actually doing it. Specialists in particular aspects of the subject contribute chapters on evolving techniques and emerging problem areas.

The first part of the book presents an overview of the subject which should serve as an excellent refresher for experienced neutrals and an understandable and meaningful starting point for beginners. The real strength of the work is in Part II where Professor Golann provides practical, insightful methods for solving the problems encountered in administering the process and reaching final settlement. The analysis is reinforced by practice aids such as forms, checklists and handy summaries of key points.

To confirm that this volume offers the latest word on mediation practice, one has only to read the sections on evaluation in mediation and decision analysis as a method of evaluation, topics both current and controversial. The contributing authors deal with these subjects in a logical and thoughtful manner. Particularly interesting is the proposition that a careful use of decision analysis can reduce the risks associated with evaluation by a mediator while improving the likelihood of reaching a settlement in tough cases.

Professor Golann rounds out his book with a presentation of special problems such as confidentiality, liability and ethics and a detailed treatment of mediation in the specific areas of employment, environmental contamination and product liability disputes.

In the foreword, renowned Harvard Law School Professor Frank E.A. Sander notes Golann's effective treatment of the heart of the book, i.e., analyzing the impediments to settlement and suggesting the means to overcome them. He states, "The potential rewards, therefore, of mastering these techniques are substantial in that they are bound to make the mediator a more effective neutral. This is a goal to which we all should aspire." Sander's observation captures the essence of the book's value.

Mediation, of course, is a moving target as is much of ADR practice. Supplements will surely be necessary to maintain the work's overall effectiveness, and it is hoped that Professor Golann intends to provide them. But since the distinctive value of the treatise lies in its analysis and management of human nature and behavior - presumably immutable principles - its worth is likely to endure as specific techniques (and fads) come and go.

In summary, this is a highly valuable resource on mediation practice for not only aspiring and experienced mediators but also lawyers, clients and judges.

Laurence D. Connor is Chairperson of the ADR Section and a member of Dykema Gossett PLLC.

1Professor Golann will be the featured presenter at the ADR Section Mid-Year Meeting on April 11-12, 1997. See accompanying article on page 1.

The ADR Newsletter is published by the ADR Section of the State Bar of Michigan. For additional information, please contact Laurence D. Connor, ADR Section chairperson and a member of the law firm of Dykema Gossett PLLC; he can be reached by phone at 313.568.6573, by fax at 313.568.6658 or by e-mail at lconnor@dykema.com.

Vol. 4, No. 2, Spring 1997

New Council Members Elected to Fill Vacant Terms

At a recent meeting of the ADR Section Council, George N. Bashara, Jr. and Wendy A. Jansen were elected to fill the vacancies left by the resignations of Robert Webster and Carol Dorfman.

Mr. Bashara is a partner at the firm of Clark Hill, in Detroit, and is a former vice-president and general counsel of Federal Mogul Corporation. He is also a former judge of the Michigan Court of Appeals and the Wayne County Probate Court. He has been an active ADR neutral and advocate for several years.

Ms. Jansen is an attorney with Puzzuoli, Hribar, Iafrate, Majerowicz, Gaber, Caseay & Jansen in Clinton Township. She is currently treasurer of the Macomb County Bar Association and has served as a mediator for the Macomb Circuit Court as well as a divorce mediator. She also serves on the State Bar of Michigan's Character and Fitness Committee, and as a hearing panelist on the Michigan Attorney Discipline Board.

Under the ADR Section's bylaws, both terms will expire at the annual meeting in September, 1997.

Approximately 50 Michigan lawyers and judges attended the Mediation Training and Skills Building Program presented by the ADR Section at its Sixth Annual Mid-Year Meeting on April 11 and 12, 1997 at the Marriott Hotel in Livonia.

Professor Dwight Golann of Suffolk University in Boston led the program with the assistance of section members Mary Bedikian, Harvey Berman, Laurence Connor, Amy Glass, Benjamin Kerner, Patrick Martin and Mark McAlpine. Professor Golann is a nationally recognized teacher and trainer in the field of ADR and mediation. He recently authored Mediating Legal Disputes: Effective Strategies for Lawyers and Mediators (Little Brown & Co. 1996) which won the 1996 CPR Institute for Dispute Resolution book prize for excellence.

The two-day program featured lectures, demonstrations and participation in simulated mediations. Each participant was given an opportunity to conduct sessions as a mediator, as well as play the roles of clients and attorneys at mediation. Topics included opening session techniques, initial and later caucus techniques, dealing with multi-party disputes, use of evaluation in mediation, and methods of overcoming psychological and other obstacles to settlement.

Written evaluations from participants indicated that the program was well received; both the presenter and the program content received high ratings. One criticism was that there was not enough time to fully address all issues, suggesting that additional programs on specific areas of mediation may be warranted. Participants received certificates from the ADR Section attesting to their completion of 16 hours of mediation training.

ADR Section Treasurer and Council Member Amy Glass served as program chairperson of the event. Former ADR Section Chairperson Benjamin Kerner assisted with arrangements.

By Mark J. Glazer

The controversial issue of employer mandated arbitration as the exclusive forum in which to resolve state civil rights claims was explored by the Michigan Supreme Court in Heurtebise v. Reliable Business Computers, Inc., 452 Mich 405 (1996). (For an in-depth discussion and analysis of the case, see ADR Newsletter, Fall 1996). The extensive list of Amici Curiae attests to the importance that civil rights groups, employer organizations, unions, and plaintiff and defense attorneys place on the underlying principles.

The only holding upon which a majority of the Michigan Supreme Court agreed was that the handbook language in this case did not create a valid agreement to arbitrate state civil rights claims. A minority of the court (Justices Cavanagh, Levin, and Mallett) went further, stating that a prospective waiver of the judicial forum for hearing state civil rights claims (in favor of arbitration) would necessarily violate public policy. Justice Cavanagh wrote for the minority:

"[I] would hold that the Michigan Constitution and our long-standing public policy preclude the enforcement of prospective arbitration agreements in employment contracts."

Justice Cavanagh concluded by stating that he favored arbitration, so long as the agreement to arbitrate voluntarily occurredafter the event giving rise to the claim. He said:

"Finally, I would assert that I am not backing away from the public policy favoring alternative means of dispute resolution. For aggrieved individuals seeking to pursue remedies for claims that have already accrued, arbitration may present a quicker and cheaper means of receiving relief, and I fully support the parties' voluntary intent in those cases. I would limit this opinion to the arbitration agreements in employment contracts entered into before any claim for unlawful discrimination has accrued."

Employers' attorneys, no doubt, see the Heurtebise decision as encouraging litigation and running up employer costs. Plaintiffs' attorneys, no doubt, see the case as preserving access to juries for their clients in civil rights matters.

The case involved arbitration in an at-will employment setting, but can the experience of arbitration under a collective bargaining agreement offer some perspective? And, does Heurtebise necessarily represent a significant barrier to the use of arbitration?

From an arbitrator's perspective, there is something to be said for exercising caution in regard to recognizing when a valid agreement to arbitrate exists; at the same time, there is much to be said for recognizing the validity of arbitral resolution of civil rights disputes in those cases wherein the parties have agreed to employ an arbitrator. Arbitration doesn't exist in a vacuum. It exists in the collective bargaining context only by virtue of a valid contract. Moreover, arbitrators have operated for years in relative comfort with the holding of Alexander v. Gardner Denver Company, 415 US 36, 94 SCT 1011, 39 LE2d 147 (1974). [An employee whose discharge was upheld in arbitration was found to have an independently-based right under Title VII to pursue -- administratively and in court -- his race discrimination claim against the company.] In Michigan, likewise, state civil rights claims can be asserted in litigation independently and without being foreclosed by earlier arbitration of contract violation issues under a collective bargaining agreement. Betty v. Brooks and Perkins, 446 Mich 270, 521 NW2d 518 (1994).

Regardless of the ultimate direction of the Michigan Supreme Court on the public policy issue, the experience of parties in traditional labor arbitration would seem to be useful for both plaintiffs' and employers' attorneys. Grievance arbitrators have routinely considered sexual harassment, race discrimination and other civil rights claims under either specific contract language or by reference to civil rights laws. I suspect that many, if not most, of these cases have been finally resolved in arbitration, without need to pursue litigation.

In a 1986 address before the National Academy of Arbitrators, Attorney Deborah Willig considered the arbitration experiencein Title VII cases. (Proceedings of the 39th Annual Meeting, National Academy of Arbitrators, p. 101 et seq.) She noted that there were six potential criticisms of arbitration:

1. Arbitrators wouldn't properly consider statutory rights;

2. Arbitrators would most likely favor the party who could reappoint;

3. Arbitration cases wouldn't be final;

4. Arbitrators would lack sufficient knowledge of the law;

5. There would be a lack of procedural due process;

6. The law lacked sufficient precedents for the arbitrators to consider.

After a review of the cases and various empirical studies, the author explained that these criticisms were without merit. Ms. Willig concluded:
"Our examination of arbitral versus judicial resolution of employment discrimination cases has, in fact, changed my opinion about the propriety of the arbitration process in the resolution of discrimination cases. When we began the research for this speech, I thought that we would conclude that the courtroom was the better forum for resolving these claims, and I must admit that I agreed with this conclusion. The courts, I thought, are best equipped to entertain the legal arguments, hear and weigh the evidence, and vindicate the important civil rights created by statute. However, the literature and our own examination leads me to conclude otherwise.

As I hope we have illustrated, most, if not all, of the criticisms leveled at arbitrators' competence in this area are without substance and are belied by the facts and statistics. Grievants are receiving the protection of the law through the arbitration procedure. The vast majority of awards comply with Title VII and simultaneously effectuate the intent of the parties to have these disputes settled through arbitration. Finality of awards is not really an issue as the statistics indicate that very few cases are relitigated and even fewer are reversed. Arbitrators are considering federal and state anti-discrimination statutes and regulations and applying them accurately. And finally, arbitrators are not afraid and, in fact, may be better equipped than judges to handle the newest issues in this field. In sum, the virtues of the traditional model of arbitration -- the expeditious, inexpensive, and efficient handling of dispute resolution -- can be enjoyed by grievants presenting discrimination claims...."

I would suggest that the most significant issue presented by the arbitration of civil rights cases outside of a union/management context is the acceptability of arbitration to both parties, regardless of whether there is a de novo opportunity to litigate in the courts. In labor arbitration, there is a strong tradition of accepting the award of an arbitrator. If this tradition were to be nurtured outside the union/management context, then we could hope that the awards of arbitrators that have resolved civil rights issues in the non-union context will likewise be accepted, notwithstanding the right to de novo review in the courts.

Ms. Willig in her article noted that 10 percent of the arbitrators were hearing 90 percent of the discrimination cases. This led her to the conclusion that only knowledgeable arbitrators were hearing discrimination cases.

If it could be demonstrated to the parties that knowledgeable, independent arbitrators were available to consider civil rights cases, then arbitration could be a successful means of dispute resolution. Plaintiff and defense attorneys, however, have to be willing to consider arbitration as a means of resolving civil rights cases, whether arbitration occurs after a suit is filed or before.

I suspect that there is a distrust of arbitration among many in the employment bar. This can only be overcome through successful experiences in arbitration, and through professional contact between arbitrators and attorneys. Arbitration in the union/management context has existed for over 60 years. It is going to take time for trust and confidence in the skills of arbitrators to develop in a setting where there is no collective bargaining agreement.

It is not necessary for the courts to require the arbitration of civil rights claims for arbitration to become the principal means of resolving civil rights disputes. If the parties are willing to accept arbitration, they can agree to arbitrate under the auspices of the courts. Further, employment contracts can be developed that will permit the arbitration of civil rights disputes. While these agreements might still permit the possibility of de novo litigation in civil rights cases, it can be anticipated that the experience of traditional labor-management arbitration will recur. Most cases will be resolved at the arbitration stage.

Therefore, a consensus favoring the arbitration of civil rights disputes must be established. The parties must be convinced that a fair system of dispute resolution led by knowledgeable arbitrators exists. This can occur only after the parties have experience with arbitration. The increased use of arbitration either through valid employment contracts or agreements to arbitrate at the litigation stage could provide the necessary basis for a willingness to accept arbitration.

Absent a consensus favoring arbitration, an eventual Michigan Supreme Court decision requiring the arbitration of Michigan employee civil rights claims may lead to consternation among employees and the attorneys that represent them. This is not a climate that is conducive to successful arbitration. With a consensus favoring it, arbitration can be a successful means of resolving civil rights cases, even though there exists a right to de novo review in the courts.

Mark J. Glazer is an attorney in Bloomfield Hills, Michigan. He serves as an arbitrator, umpire and fact finder in labor disputes and grievance matters. Mr. Glazer is past Michigan Regional Chairperson of the National Academy of Arbitrators and is listed on the panels of the American Arbitration Association and the Federal Mediation and Conciliation Service. He is a graduate of the University of Michigan Law School and the Labor Arbitration Development Program of the State Bar of Michigan.

The ADR Newsletter is published by the ADR Section of the State Bar of Michigan. For additional information, please contact Laurence D. Connor, ADR Section c-hairperson and a member of the law firm of Dykema Gossett PLLC; he can be reached by phone at 313.568.6573, by fax at 313.568.6658 or by e-mail at lconnor@dykema.com.

Vol. 4, No. 3, Summer 1997

The Alternative Dispute Resolution Section of the State Bar of Michigan will present a program on negotiation during the State Bar's three-day annual meeting in September. The program will be held Thursday, September 18, 1997 at Cobo Hall in Detroit, at 2:30 p.m. Professor James J. White of the University of Michigan Law School will be the principal speaker and will discuss "The Art of Effective Negotiation: Standard Techniques, Common Errors and Some Ethical Questions."

Direct negotiation remains the most prevalent method of dispute resolution, and it is the foundation of all other ADR processes. All lawyers are faced with the need to negotiate but too often, negotiation becomes a disorganized series of reactions to opposing counsel's actions, rather than a proactive process of thoughtful, conscious choices. Moreover, sensitive ethical questions limit a lawyer's negotiating tactics. These and other issues will be discussed at the September program.

James J. White is the Robert A. Sullivan Professor of Law at the University of Michigan Law School where he teaches a course on negotiation. He co-authored the book The Lawyer as Negotiator, and several articles including "The Pros and Cons of ÔGetting to YES'" and "Machiavelli and the Bar: Ethical Limitations on Lying in Negotiation." He is a member of the editorial boards of West Publishing Company and of the American Law Institute. Professor White received the 1997 Award for Teaching Excellence at Michigan Law School.

The program will also include the popular annual review of developments in ADR by George T. Roumell, Jr., a member of the ADR Section Council and former president of the State Bar of Michigan; and by Mary A. Bedikian, regional vice-president of the American Arbitration Association.

The 62nd Annual Meeting of the State Bar of Michigan will take place September 17-19, 1997 at the Cobo Conference/Exhibition Center in Detroit. The theme of this year's meeting is "Justice for All." More than 40 topics will be discussed during the three-day session.

The State Bar of Michigan will host two half-day seminars on 1998 Judicial Elections on October 8, 1997 in Lansing; and on October 28, 1997 in Detroit. Topics to be covered include: Filing for Candidacy, Campaign Reports, Proper Contributions; Campaign Timing, Management of Campaign Funds, Advertisements & Debates; and Campaign Complaints, Winding-Up Your Law Practice, Divestiture. The seminars are targeted to judges eligible for re-election, attorneys interested in running for judicial office, and members of the media who cover elections. The cost of the seminar is $120. An agenda and registration form can be found in the July, August, and September issues of the State Bar Journal, and will soon be availableon the State Bar's web site:

http://www.michbar.org.

For additional information, contact Mary Egner at (517) 346-6316.

by Laurence D. Connor

In Heurtebise v. Reliable Business Computers, Inc., 452 Mich. 405 (1996), the Michigan Supreme Court refused to enforce a mandatory arbitration provision in an employee handbook because the handbook language did not create a valid agreement to arbitrate employment discrimination claims. A recent Michigan Supreme Court case provides additional insightregarding how the state's highest court views agreements imposed on employees as a condition of employment.

In Herweyer v. Clark Highway Services, Michigan Supreme Court No. 103802, Slip Op, July 8, 1997, the court reviewed a six-month limitation period and savings clause in an employment contract drafted by the employer. The contract provided that the employee plaintiff would not commence any action or suit relating to employment or termination of employment more than six months after termination, and that he waived any statute of limitations to the contrary. The contract also contained the following savings provision: "I agree that if any of the above commitments by me is ever found to be legally unenforceable as written, the particular agreement concerned shall be limited to allow its enforcement as far as legally possible."

The employee lost his job in May, 1990, but waited until December, 1992 to file suit for breach of employment contract, age discrimination, handicap discrimination and retaliatory discharge. On motion for summary disposition, the trial court expressed reservations about the brevity of the six-month limitation. Nevertheless, it concluded that even if the six-month period was unreasonably short, the thirty-one months the plaintiff waited before suing was too long in light of the savings provision, and dismissed the case. The Court of Appeals affirmed, holding that a reasonable time for bringing suit was less than 31 months. The Court of Appeals also rejected plaintiff's argument that allowing employers to shorten the statutory period of limitation for employment actions is contrary to public policy.

The Michigan Supreme Court, however, reversed the Court of Appeals. In a unanimous decision, the justices held that courts should not determine periods of limitation on a case-by-case basis. If a contractual limitation is unreasonably short, then the statute of limitations provided by the legislature should apply.

The Herweyer decision may well impact employment contracts containing mandatory arbitration provisions. Although the court purported to limit the decision to the narrow issue involving court-determined statutes of limitation, the following points raised in the opinion could be significant when the next challenge to an employment dispute resolution provision reaches the Michigan Supreme Court. First, the court signaled a willingness in the future to consider public policy limitations on the right of employers to impose restrictions on employee lawsuits. This suggests the possibility that the court could adopt the minority's strong public policy position in Heurtebise.

Second, the court distinguished employment contracts from other commercial agreements. The opinion notes the difference between agreements involving businesses negotiating a contract on an equal footing and those in an employment setting where the employee has little or no negotiating leverage. The court stated that the latter situation deserves close judicial scrutiny.

Finally, the court found that the employer-drafted savings clause was ambiguous and should, therefore, be construed against the employer. Accordingly, the court would not find that the provision allowed a reasonable period of limitation in excess of six months but less than the statutory limitation.

These findings could be applied to future challenges to binding dispute resolution clauses drafted by the employer. In this decision, along with its decision in Heurtebise, the Supreme Court seems to be sending a clear signal that Michigan courts should scrutinize employment contract provisions that purport to limit employees' access to the judicial system. To be enforceable, such provisions must be clearly written, reasonable, and in strict compliance with Michigan contract law. Even if a provision meets these criteria, however, the court has maintained the option to declare such an agreement void in the future, on the basis of violation of public policy.

Laurence D. Connor, a member of Dykema Gossett PLLC, is chairperson of the ADR Section.

The ADR Newsletter is published by the ADR Section of the State Bar of Michigan. For comments, contributions or letters, please contact Laurence D. Connor at (313) 568-6573, fax (313) 568-6658; or Benjamin A. Kerner at (313) 965-1920, fax (313) 965-1921.

The ADR Newsletter is published by the ADR Section of the State Bar of Michigan. For additional information, please contact Laurence D. Connor, ADR Section chairperson and a member of the law firm of Dykema Gossett PLLC; he can be reached by phone at 313.568.6573, by fax at 313.568.6658 or by e-mail at lconnor@dykema.com.