CFPB Arb Rule Appears Dead

Last night, Vice President Pence broke a 50-50 tie vote in the U.S. Senate, narrowly approving repeal of a rule that blocked financial companies from requiring consumers to resolve disputes with individual arbitration proceedings. The Senate vote followed earlier House approval and now goes to President Trump for his expected signature into law. The action is a defeat to the Consumer Financial Protection Bureau (CFPB), the federal financial industry watchdog group created under President Obama that approved the rule last summer with an effective date of March 19, 2018. It allowed consumer class actions against credit card companies and other financial institutions. The CFPB rule would have required sending a notice or to amend an arbitration agreement if entered into on or after March 19th and offered variable examples of language to use for agreements applying to multiple products or services, if not all were covered by the rule. According to the CFPB, there were two main parts: First, the final rule prohibited covered providers of certain consumer financial products and services from using an agreement with a consumer that provided for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service. Second, the final rule required covered providers involved in an arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the Bureau and also to submit specified court records. The bureau also adopted official interpretations to the proposed regulation. See full story here-- https://usat.ly/2h6FFIz and final rule language here-- http://bit.ly/2yKBRak

Mediation Week 2017

American Bar Association (ABA) Mediation Week is in progress and the theme this year is "Mediation, Civility and the Power of Understanding." As lawyers and mediators, we understand both the challenges and rewards of helping parties in conflict reach an agreement by getting past differences in positions, by understanding each other’s perspectives better, and by finding ways to get their important interests met while staying true to their values and belief systems. Programs held during ABA Mediation Week provide neutrals, advocates and policy makers with inspiration and tools necessary to bridge the gap that often prevents amicable resolution of disputes. Over the last few decades the field of alternative dispute resolution has grown tremendously, helping to clear dockets in the courts. The recognition that not all cases are well suited for the adversarial process and that there are multiple paths to justice is increasingly shared by attorneys, judges, and the public. ABA Mediation Week celebrates of the strides in institutionalizing mediation as one of several appropriate dispute resolution processes. Our firm is contributing by putting on a program this week at the University of Florida College of Law's Institute for Dispute Resolution. My topic is Language of Mediation in which my colleague and I look at destructive language patterns and modes of communication, including cultural metaphors and discourse analysis. Simply put, language has an impact on a subconscious as well as a conscious level. In the setting of conflict resolution, it offers concrete, positive alternatives to potentially destructive speech. With more awareness of the relationships among language, culture and diversity, a mediation participant’s sensitivity to the importance of structural and non-verbal aspects of communication should increase. See more on our UF program here-- http://bit.ly/2gklRkm

Divided Supreme Court Considers Workplace Arbitration

This week, the Supreme Court attempted to determine how far companies can go in insisting that disputes be resolved in individual arbitrations, rather than in court. The Court considered whether to give employers a powerful tool to bar class actions over workplace issues. The decision on this matter could affect some 25 million employment contracts according to the New York Times. A ruling in favor of employers, Justice Breyer said, could cut out “the entire heart of the New Deal” and undo an understanding of labor relations since the administration of FDR. Earlier cases ruled that companies doing business with consumers may require arbitration and forbid class actions in their contracts. Arbitration clauses with class-action waivers are commonplace in contracts for things like smartphones, credit cards, rental cars and nursing homes. Prior arbitration decisions have been closely divided, with conservative members in the majority. The justices now consider whether they should use a different approach for employment contracts. The answer depends on the interaction of two federal laws: the Federal Arbitration Act, which favors arbitration and the National Labor Relations Act, which protects workers’ rights to engage in “concerted activities.” Workers seeking to sue their employers for overtime pay and the like say the second law prohibits arbitration clauses that require class-action waivers. Reportedly, Justice Kennedy seemed ready to side with employers. Justice Gorsuch asked no questions. Justice Ginsburg said arbitration law was concerned with agreements between merchants of relatively equal bargaining power. The employment contracts at issue in the case, she said, have been forced on workers with "no true liberty of contract." In an unusual fashion, many cases were consolidated for a single oral argument and lawyers for the federal government actually appeared on both sides. Some justices suggested that workers could band together in a limited sense by hiring the same lawyer and filing individual arbitration cases. Justice Kagan suggested that was not good enough. See full article here-- http://nyti.ms/2yTgLUa Watch for decisions in: Epic Systems Corporation v. Lewis, No. 16-285, Ernst & Young v. Morris, No. 16-300 and National Labor Relations Board v. Murphy Oil USA, No. 16-307 which will be available this term here-- http://bit.ly/2yuxv7k