IDEAS

Tracking Workplace COVID-19 Litigation Trends, From Discrimination to Class Action Lawsuits

PETER J. WOZNIAK AND MARK W. WALLIN BARNES & THORNBURG LLP

The COVID-19 pandemic has done a considerable amount for workplace litigation. Peter Wozniak, partner with Barnes & Thornburg, and Mark Wallin, of counsel with Barnes & Thornburg, discuss trends they’re seeing in litigation tracking.

Since March 2020, the Barnes & Thornburg LLP Wage and Hour Practice Group has been tracking COVID-19 related workplace litigation. The goal of this tracker is to allow employers to watch the trends as they develop, and (hopefully) avoid some of the pitfalls.

As the pandemic progressed, several notable trends have developed in the allegations. Far and away the largest number of complaints have come from the “Wrongful Termination, Retaliation and Bias” category. Some of these complaints allege that the plaintiff was terminated under the pretext of COVID-19, but that the true reason for the termination is one or more protected characteristics possessed by the plaintiff. Age and disability discrimination are among the most prevalent allegations. For example, in Pizzirulli v. Storer Transportation Service, et al., a 64-year-old charter bus driver in Stanislaus County, California, alleged that his temporary layoff was converted to a permanent layoff because of the COVID-19 pandemic. The plaintiff alleges that only three other employees were permanently laid off, and that these other employees were all about the same age as him.

Another emerging trend is claims arising out of federal leave laws such as the FMLA and the FFCRA. These complaints tend to allege that plaintiffs were terminated while on protected leave or that their jobs were not available when they attempted to return from leave. A prototypical example comes from Summit County, Ohio, in Leppo v. Environmental Design Group, LLC. In this

complaint, the plaintiff alleges that she was terminated while on leave to provide childcare, and that six of seven employees taking FFCRA leave were terminated around the same time, “due to the economic impacts of COVID-19.” A significant number of class and collective action complaints with a COVID-19 component have also been filed. In some of these claims, COVID-19 is merely background, unrelated to the class claims. In others, COVID-19 is material to the class claims, as in Jauregui, et al. v. Cytec Engineered Materials, Inc., et al. out of Orange County, California. This class action filed under the California Labor Code seeks unpaid wages for time employees allegedly spent waiting for temperature checks as part of a COVID-19 screen. Time will tell whether these complaints have merit, and the next step will be to analyze whether the claims survive motion practice. The pandemic clearly has created a trap for the unwary. Mindful employers would do well to review their policies and practices to ensure compliance with state, local, and federal laws and regulations, and to consider seeking counsel. Moreover, caution should be exercised before acting, especially when it comes to actions that could affect large portions of your employee population, in order to avoid class claims (to the extent possible). Follow the Barnes & Thornburg COVID-19 Related Workplace Litigation Tracker for continued updates and analysis. 

This article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer about any specific

legal questions you may have concerning your situation.

Peter Wozniak is a partner with Barnes & Thornburg in their Chicago office. He represents clients across numerous industries, including transportation and logistics, restaurants, retail, manufacturing and temporary staffing. Reach him at peter.wozniak@btlaw.com. Mark Wallin, of counsel with Barnes & Thornburg in Chicago, focuses his practice on defending employers in complex workplace class and collective actions in state and federal court. Wallin also defends employers in class action, multi-plaintiff and single plaintiff discrimination litigation by the EEOC and private plaintiffs. Reach him at mark.wallin@btlaw.com.

Despite COVID, LIBOR Rates Still Set to Expire

STEPHANIE J. SPRENKLE McNEES WALLACE & NURICK

During the unprecedented events of 2020, some may have forgotten about the upcoming phaseout of LIBOR at the end of 2021 – but now is a good time for borrowers to refamiliarize themselves with the potential ramifications of the change.

Do you remember those halcyon days of yore, such as in 2017 when the Financial Conduct Authority (FCA) of the United Kingdom announced that it would no longer support London Interbank Offer Rate (LIBOR) quotes and that LIBOR would phase out at the end of 2021?

It was a disruption in the financial marketplace, and financial institutions were left to determine what alternative reference rates would replace LIBOR. Fast forward to 2020, with the new disruptive force of COVID-19 dominating the headlines and affecting businesses, many borrowers may have forgotten about the phaseout of LIBOR, and to some extent, they may have hoped that it would be delayed until the effects of the pandemic lessened. This hope was only increased by the fact that several financial institutions have continued to underwrite loans with maturity dates after 2021 using LIBOR as the applicable interest rate.

However, in March of 2020, the FCA issued a statement that LIBOR’s termination after 2021 is still planned. In addition, the Alternative Reference Rates Committee (ARRC), which was established by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York to identify alternative reference rates to replace LIBOR, published on its website that it will continue on the path of eliminating LIBOR at the end of 2021. Following these announcements, financial institutions need to continue to review their loan portfolios to assess the impact that the phaseout of LIBOR will have on the portfolios, and just as important, borrowers must focus their attention on what happens when LIBOR ceases to exist and what the impact will be on any borrower’s outstanding indebtedness.

The first step for a borrower to undertake is simple. If you did not start reviewing your outstanding loan documents in 2017, start reviewing them now. Determine whether your outstanding financing is using LIBOR as the interest rate. If not, breathe a sigh of relief and go back to worrying about the effects of COVID-19. However, if LIBOR is the interest rate for the loan, carefully review the documents to determine whether they address what happens if LIBOR ceases to exist. It could be the documents do address this issue, but it is then important to review what the

consequences are. Some financial institutions used standard language that if LIBOR was unavailable, loans would convert to the prime rate as quoted by the Wall Street Journal. As of the week of September 14, 2020, the prime rate was 3.25 percent (for the same week in 2019, it was 5.25 percent). As shown on the ICE Benchmark Administration website, the 30-day LIBOR rate for September 11, 2020, was 1.52 percent. This is a great difference in interest rates, and a change from LIBOR to a prime rate could seriously impact a company’s cash flow, particularly if numerous loans are structured in this manner.

Some lenders did think about what would happen if LIBOR ceased to exist, and language could be in loan documents that states that if LIBOR ceases to exist, then a replacement index will be used. Depending on how the language is drafted, a lender may have a great deal of leeway to determine the replacement index. For example, if the replacement rate language provides that the lender will use a commercially reasonable index that it is also using for similarly situated borrowers, there is some comfort in knowing that the lender will be treating your loans the same as others. However, without naming the specific replacement index, some borrowers will be concerned as to what the financial institution intends to do.

ARRC has so far stated that it is supporting using the Secured Overnight Financing Rate (SOFR) as a replacement index for LIBOR. Unlike LIBOR, which is an average of what financial institutions say they would have to pay to borrow from another financial institution and which borrowings are unsecured, SOFR is based on the cost of overnight cash borrowings secured by U.S. Treasury securities. One of the prime advantages of SOFR, as opposed to LIBOR, according to ARRC, is that the SOFR rates are based on actual transactions, and SOFR is produced in a more direct and transparent manner, whereas LIBOR was based on estimates of rates for future transactions. This

Carefully review your loan documents to determine whether they address what happens if LIBOR ceases to exist.

distinction should alleviate concerns that SOFR will be subject to the same fraud and manipulation that previously occurred in determining LIBOR.

If your loan documents do not identify a replacement index (or provide parameters for determining the replacement index), it might be up to the borrower and financial institution to mutually agree to a replacement rate. This could very well lead to neither party agreeing to a replacement interest rate, which could lead to a default of the loan when it is time to reset the interest rate, or at the very least, force the borrower to search for replacement financing. This is a position that some borrowers may not want to face right now. With the economic impacts of COVID-19 affecting businesses and causing financial institutions to tighten their underwriting conditions, especially in industries hardest hit by the pandemic, seeking replacement financing may not in the best interest of a borrower.

So, if you are unsure what replacement index will be used after reviewing your loan documents, or if you are concerned that you might need to seek replacement financing, the next critical step is to contact the financial institution. Reach out to the lender and start the conversation as to what the loan will look like after 2021. Although many lenders have been focused on the new lending programs that have come into the market because of the pandemic, it is not too early to have the lender shift his or her focus on what is going to occur next year. While major financial institutions have been following ARRC’s proposed timeline to terminate LIBOR, the pandemic has shifted the world’s collective focus and caused many institutions to deal with new problems that are occurring in realtime, as opposed to those that are going to occur in the future.

However, it is up to you as the borrower or borrower’s counsel to help shift the focus back onto your financial transactions. Starting the review of your loan documents now will help you better understand to what extent the replacement of LIBOR will impact your outstanding indebtedness, which will impact the cash flow of your business. Also, if the loan documents do not specifically state what happens when LIBOR ceases to exist, or if you are in a situation where it appears the replacement index may not be SOFR and you think it may be in your company’s best interest to discuss alternative replacement indexes, it is best to start the conversation with your lender now. If you would need to enter amendments to the loan documents, it is better to start those negotiations now than at the end of 2021.

Although there may potentially be some delay to the complete phaseout of LIBOR, due in part to the pandemic’s unpredictable nature, the FCA and the ARRC are committed to the expiration of LIBOR; it will happen sooner rather than later. Therefore, take the time now to start planning for the new financial world order. 

Stephanie J. Sprenkle, of counsel in the McNees real estate practice group, assists purchasers and sellers in the acquisition and disposition of real property and the development of real estate. She represents tenants and landlords with respect to commercial leasing and financial institutions and borrowers regarding real estate. Reach her at ssprenkle@mcneeslaw.com.

What We Can Expect From the Ongoing Metamorphosis of the Legal Ecosystem

Shahzad Bashir, president and CEO of Morae Global Corporation, has seen the legal profession evolve during his three decades in the industry, but the events of 2020 have spurred an unprecedented transformation. Here, he discusses the specific nature of those changes – and which ones are here to stay.

CCBJ: Your company, Morae Global Corporation, is known for enabling digital and legal business transformation for law firms, law departments, and compliance. Morae recently partnered with CCBJ to co-host the Legal Transformation Forum, an interactive virtual event that facilitated discussions about tough issues facing today’s legal professionals. What were you hoping to achieve with this collaboration?

Shahzad Bashir: If we were in my office, you’d see a framed poster with the caption, “Success is a journey, not a destination.” I’ve had that in my office for almost my entire career – beginning at Arthur Andersen, then at Huron Legal, which I co-founded, and now at Morae, which I founded. Part of my mental model is, “How do we make a meaningful impact, not only for our clients but also for our people?” One of my core guiding principles is to tap the power of collaboration.

Morae is a huge believer in collaborating with business partners, technology partners, and thought leaders like CCBJ. A top issue in our industry is that people tend to operate in silos. These silos can be quite pronounced in the legal ecosystem. Our goal is to do as much collaboration as possible to break down silo walls. As a result, Morae has been able to develop strong core legal and compliance competencies. At CCBJ, you have established a leading platform for thought leadership. Our goal was to bring together our respective strengths to help inform the market. And I think we have very successfully begun that journey with the Legal Transformation Forum. The networking, the thought leadership, the edification that we achieved – It was a great start, and if we build upon that, just imagine what else we can do together!

What were the key takeaways that you and your team identified as a result of co-hosting this highly interactive global event?

We can look at it strategically and tactically.

Strategically, one of my personal takeaways from the forum, and something which I have long believed in, was the validation that the legal community is global. It doesn’t matter whether you’re representing a bank in the United States, the United Kingdom or Australia – it is a global community. There are common business challenges and common philosophies around the world, which can and do foster substantive discussion and great opportunities for industry collaboration.

I also observed what I will describe as a greater sense of “change readiness” among both corporate counsel and outside counsel. People often look at our industry and say it is slow-moving or resistant to change. But these days, we can see the industry rapidly changing in front of our very eyes. A great example discussed during the event is the increased adoption of technology and the acceptance of best practices.

Tactically, I found the turnout and level of engagement at the event were wonderful. It was a very nice cross section of the legal industry: law departments, law firms and technology providers. The feedback from speakers and attendees was also excellent. We really enjoyed hosting the forum because of the value it provided for everyone in attendance.

In your opening remarks, you asserted your belief that many of the changes that we’ve seen over the course of 2020 are here to stay. Which changes specifically do you anticipate staying with us, and why?

From what I’ve learned over my years in this business, you’ve always got to look back at what have been the causes of any change. As is no surprise, most of the changes in 2020 have been due to COVID-19. The old saying, “Necessity is the mother of invention,” really seems to hold true here. The pandemic provided that extra nudge that some organizations needed in order to commit to meaningful change. Some of these changes were already percolating before COVID-19. But in March, the industry was forced to make hard choices, starting in Europe and the Asia-Pacific region and then in the Americas. What else was the industry going do as economies went into lockdown? The response – with all the changes now underway – has dispelled the old myth that the legal industry resists change. Let me give you some examples.

One of my friends is a general counsel at a top 10 global company. For a long time, he used to talk about “butts in seats.” This was his way of looking at his workforce. He would look out at the parking spaces to see whose cars were there before 8 a.m. and whose cars were still there after 6:30 p.m. This approach is no longer valid. What we call “work from home” really is remote working from anywhere, at any time. The transition to this model was swift and fluid.

Another example is the widespread use of information collaboration. Outside counsel, enabled by digital transformation, are collaborating more than ever amongst themselves. Similarly, corporate counsel are collaborating more with their internal clients. And we can see outside counsel and corporate counsel also working more closely with each other. At Morae, we have leaned on technology and business processes to facilitate greater levels of collaboration with our clients too.

It should come as no surprise then that there has recently been an accelerated trend in cloud adoption as an important enabler for digital transformation.

Here to stay as well are certain business practices which have changed during the COVID-19 period. Specifically, I don’t see business travel ever going back to the way it was. We have all found that we can work as efficiently and effectively through the use of technology, rather than jumping on a plane. Don’t get me wrong – I’m not saying that business travel will be gone completely. I’m just saying that its role in how we collaborate will emerge as something different. Travel isn’t as necessary as people used to think it was. We can do a lot virtually instead of physically. Contracts are a good example. Technology is changing the whole process of contracting. Consider wet signatures. For the vast majority of commercial transactions, we’ve moved away from wet signatures to electronic ones.

I believe global sourcing is here to stay too. The location of a service provider and a service recipient do not need to be the same. I see the process of global right-sourcing now significantly accelerating from where it was before COVID-19.

In a broader sense, there’s no “normal,” and I really cannot predict when we will truly be in a “new normal.” Industries, markets and geographies are all responding to what they believe is the emerging normal. When we finally do move into whatever the new normal turns out to be, I believe we’ll find the areas I have described are key parts of it. And it will be a combination of the old and new ways of doing things.

But it’s not like there will be one fine morning with a headline in The Wall Street Journal announcing, “The new normal is here.” There are different economic and social indicators – whether it’s the consumer price index, or stocks, or interest rates, or employment numbers. At some point, these will all move in a direction that will allow us to conclude that our economic activities are where they need to be. And to me, that’s what we’ll call the new normal. Driving these changes is largely the adoption and acceptance of currently available technology. If you look at Zoom, for instance, that didn’t suddenly get invented on March 12. It’s been around. What has changed is us. We’ve all started using it. If you look at document sharing, that’s also been around. The cloud has been available to all of us for years. The capability to source globally has been around for a long time, as indeed have the alternatives to travel and wet signatures. These things will stay, and become further ingrained, as economic activities settle into where they need to be.

What advice do you have for people or organizations that are looking to innovate within the legal industry?

My view is that innovation for the sake of innovation doesn’t really stand the test of time. When I consider how we describe Morae’s value proposition to our clients, I often ask my

We are at the cusp of a fundamental transformation in how legal services are created, consumed and even reused by legal and business professionals.

colleagues to really think about and define innovation. For me, innovation should include: (1) Defining the outcome, (2) removing the silos, and (3) integrating technology. Those are the three pieces of advice that I can give with all humility. And if those three are done right– either in combination or singly – they will allow the right kinds of innovation to happen.

What are your hopes for the future of the legal industry?

Let me start by saying that I really must applaud my colleagues in a very broad sense for how they have embraced change. Not just my Morae colleagues, but those throughout the legal industry, including my peers and clients. Oftentimes, as I said earlier, I hear the assertion that the legal industry is too slow to change. That it is resistant to change. Yes, that may have been true a couple of decades ago, and maybe even just a decade ago. But now we’re seeing a wave of changes and transformation unfolding, with more on the way. I really believe that we are at the cusp of a fundamental transformation in how legal services are created, consumed and even reused by legal and business professionals. This will happen, and here’s why.

First, I am seeing structured collaboration – meaning that there are standardized processes around these engagements. I see that what used to be called “alternative legal service providers” are now dropping the “alternative.” Now we are simply legal service providers. That’s an acceptance of the role and value companies like Morae can provide. I see fundamental right-sourcing happening – meaning that work is being sent to the right organization, to the right geography, to the right caliber of people, where the resources are fit for purpose.

Technology is another one – we’re seeing increased use of the right technology in the right manner.

And finally, the breaking down of old perceptions of legal services as a homogeneous bucket that can be scooped out and delivered. I believe the future will have many different flavors of what I would call process-oriented services versus judgment-based services. For example, the drafting, negotiating and signing of a nondisclosure agreement is very much process driven. Contrast that with negotiating a major transaction or conducting a deposition for a litigation – which require considerable use of judgment calls.

I believe that together, structured collaboration, legal service providers, right-sourcing and technology will all allow service providers and service receivers to differentiate process-driven services from judgment-driven services.

This represents a fundamental transformation of the industry, for the better. 

Bashir's Legal Transformation Summit

Shahzad Bashir is the president and CEO of Morae Global Corporation. As CEO, he is responsible for the vision and strategy of Morae, as well as providing leadership in hopes of transforming the legal industry for the sake of Morae's clients. Bashir has three decades of experience in legal and financial consulting services. This experience includes the development of keynote can be viewed here.

business strategies, law department structuring and more. Reach him at shahzad.bashir@moraeglobal.com.

With Court Cases Backlogged and Potential Delays Inevitable Post-COVID, ADR Stands Ready

The Honorable David B. Saxe (Ret.), neutral with NAM (National Arbitration and Mediation), discusses the ways that his experience as a judge and a lawyer inform his ability as a neutral; the advantages of alternative dispute resolution versus litigation; and the role of mediation and arbitration during the pandemic and beyond.

CCBJ: After an illustrious legal career as a litigator, trial judge and then one of the justices of the Appellate Division, First Judicial Department for the Supreme Court of the State of New York, you’ve been involved in all manner of disputes and legal proceedings. How has your background and experience prepared you for a career in alternative dispute resolution (ADR)?

Hon. David B. Saxe (Ret.): As a judge, my career on the bench spanned 36 and a half years, and I saw pretty much every kind of case imaginable, probably more than once. So, I look to that experience first. From agriculture cases to zoning cases – A to Z – I’ve ruled on cases, litigated cases and negotiated cases and settlements. So, I understand where most controversies will end up in court. That informs my ability as a neutral because I can guide the parties and advise them based on my experience about how I think a court decision would go. The parties always want to know, “How is a judge going to look at this case?” And I know how a judge is going to look at a case, because I’ve probably sat on a case and decided a case just like that in the past. All of that experience helps me be a better neutral.

Additionally, I bring to bear the experiences I had as a lawyer. Prior to my time on the bench, I was a partner in a boutique real estate litigation firm, I was involved in consumer protection cases and I worked for a Fortune 500 commercial lending institution. So, I know the practice of law, and I know the kinds of disputes that come out of doing business. And I’ve experienced them, both as a lawyer and a judge. When is the right time to seek out ADR?

Both parties and their counsel really have to be ready, both in a practical and psychological sense, to want to talk to each other on a meaningful level. In other words, if they’re ready to tear each other’s throats apart, that’s not the proper time to put them in a room to try to resolve certain disputes. There has to be a cooling-off period first, where they understand that there are risks inherent in going to trial, and that it’s worth the elimination or at least reduction of risk to resolve or settle their case through ADR. They have to reach that level. Sometimes it happens early; sometimes it only happens on the eve of a trial. It’s really determined on a case by case basis, but you have to have that willingness to talk – and listen.

NAM administers arbitrations and mediations, throughout the United States and internationally, that originate from a pre-dispute contractual clause. With that in mind, what is the benefit of including a pre-dispute arbitration clause in corporate agreements and/or employment agreements and programs?

It’s very important. The short answer is that when parties enter into a contract – let’s say it’s any commercial contract, like a contract for the delivery of goods, or for services, whatever it is – if there’s no clause regarding arbitration or mediation, no ADR clause, well, what happens when there’s a dispute? Maybe the parties try to negotiate the problem themselves. Maybe they’re successful. But oftentimes they’re not successful. When they’re not successful, litigation starts, and that’s very hard. At the beginning of a litigation, there’s a great deal of tension between both sides, annoyance, maybe even anger. It’s very difficult at that stage to get the parties together to say, “Well, you know something? Let’s mediate this case.”

It’s far better to have that clause in your contract of sale or services, whatever the case may be, beforehand, so that if a dispute comes about, both parties know that they’re going to be involved with an ADR administrator like NAM, in mediating that dispute, or maybe even arbitrating that dispute. It’s a tremendous savings of time and money as well.

NAM has been utilizing videoconferencing for more than 25 years, and now, during the pandemic, they’ve been able to convert many of the in-person arbitration hearings and mediation conferences to the virtual platform. As the courts continue to deal with effects of COVID-19, how can virtual arbitration and mediation be of value to practicing attorneys?

Videoconferencing is a game changer. There’s no question about it. And COVID-19 has certainly accelerated that change. NAM has been involved in videoconferencing for over two decades, and they are very technologically proficient in that regard. The reason why it’s important, and will remain important, is pretty simple: it saves time and money. I don’t think lawyers are going to go back to the old way of arbitrating or mediating a case, because clients are going to push them and say, “Why go back, when we have developed a proven way of videoconferencing ADR?”

Before I was affiliated with NAM, I was the mediator for various disputes where the parties were coming from different parts of the country to see me in my law office in New York. They had to be put up in hotels in Manhattan, and a client was paying for a team’s meals, travel, hotel arrangements. Now, they can remain in their law offices, the clients can stay in their headquarters, and we can conduct the mediation through videoconferencing. And it’s fine and it works. So, I think videoconferencing is here to stay and going to become the norm. Attorneys are going to like it, and clients are going to like it.

Is there any one type of case or claim that we may see more of as we recover from the pandemic?

I think you’re going to see an uptick in the number of complicated marital dissolution cases throughout the country, especially in major urban areas. And those cases will involve issues of financial distribution, or equitable distribution. Complex matters that really require a judge – someone who is not only sensitive to the issues that are going on in the marriage, but is also really knowledgeable about partnership issues, tax issues and things of that nature. The reason I say that is, I think COVID-19 has caused people and families to be placed into a closer relationship than they might otherwise be. So, people are kind of hunkered down in their homes, and husbands and wives and families are spending a lot more time together than they might have otherwise, and I think that is exacerbating some of the tensions. I think that tension is going to burst when the pandemic starts to subside.

And when the pandemic finally does abate, once we have a decent vaccine and people start getting back into the world, I think you’re going to see a great influx of cases. I’m not only talking about complex matrimonial cases, but also complex commercial litigation and real estate litigation. Generally, lawyers and their clients have been adopting a bit of a wait and see attitude occasioned by the pandemic, and when people feel more comfortable, I think there will be a rush to resolve disputes. And I don’t think the court system is prepared to handle it. I think these cases are going to swamp the court systems, not only in my bailiwick, New York City, but throughout the country. And that’s why I think the concept of med-arb presents an interesting possibility. It provides a neutral an opportunity to try their hand at mediating a case, while also saying to the parties, “You know what? If there are things you can’t agree on, the way to finish this off is to arbitrate it.”

Is ADR ready to handle the influx of cases that I suspect, there will be? Well, I think NAM is prepared. We have a tremendous roster of neutrals, including neutrals who were former judges in the state court system, like myself.

You’re considered one of the most prolific and frequently cited judges in the nation. Based on your many years of experience on the appellate level, what place would you say an appeals process has in private ADR?

This is a subject I have a great interest in, and it’s one I have written about for the New York Law Journal – an article proposing an appellate platform in arbitration. As a matter of fact, that article was an award winner in a national publication contest, so it was nice to know that members of the bar thought highly about the topic and the article. But getting to the actual substance, I’ve sometimes been surprised by the value of the arbitration award. And while there has to be a winner and a loser, the award is not always just or fair – especially to the losing party – and unfortunately, the affected party really can’t do anything about it. And that’s because of the finality of arbitration.

There are limited grounds, yes, available under statutes for challenging an arbitration award, but they’re very limited. Very, very limited. If I had to put it in a nutshell, you basically have to show that the arbitrator was virtually unethical. It’s an almost impossible standard. So, it seems to me that if you could build in, and this would be in the precontractual agreement, a limited and focused appellate arbitration procedure, it would satisfy a lot of people. I think that it would encourage more litigants to consider arbitration, because they know that if they’re faced with a questionable award, they’ll at least have the opportunity for a do-over. I think that would be very important. I think it would increase the number of arbitrations because the finality of arbitration can sometimes be a deterrent.

NAM has specific appellate rules that parties can agree to and incorporate into a contract between the parties who sign on to arbitration.

If you had to give one piece of advice to a lawyer getting ready to mediate or arbitrate before you, what would it be?

I know how a judge is going to look at a case, because I’ve probably decided one like that in the past.

I’ve encountered many lawyers over the years and quite frankly, some are just not good listeners. When others are talking, they’re thinking about something else – usually they’re thinking about a response. And that segues into another characteristic I’ve noticed about attorneys, which is that many don’t have a lot of patience. So, I would try to encourage the lawyer who is representing a party at mediation to be very diligent and aware of their listening quotient. To participate in active listening, where you’re just not letting the words go in and out, but you’re really attempting to listen and maybe even reformulate what’s been said. It shows the party that’s speaking, that you remember what was presented and are reflecting on what was just said.

This is a very important quality, and it ties into the lack of patience that many lawyers have. They want to jump to a solution, and they get upset when the parties at a mediation begin to meander a bit. You’ve got to give people a chance to consider their options, and then bring them back slowly, while listening to their concerns. In doing so, attorneys should not only listen carefully to what their client has to say but also pay close attention to the mediator’s advice. Keeping the dialogue fluid between parties is often the key to a successful resolution. If the attorney fails to do so, their client could become disenchanted with the process and possibly abandon the mediation altogether. Again, I can’t stress enough that the ability to listen is the one of the most important ingredients to a successful mediation.

If I had to put a name to it, it’s emotional intelligence. The qualities of active listening and having the patience to let people tell their story, that’s a sign of emotional intelligence. It encourages a closer relationship between the parties to the mediation, and with the mediator. It’s likely to help produce a resolution. If it’s not there, it’s going to be much more difficult to bring both parties together.

With 2020 almost behind us, what trends do you foresee nationally for ADR, and in particular, for complex commercial matters in 2021 and beyond?

The first thing that comes to mind, because it takes me back to a prior question, and ties into this one, is videoconferencing. As I mentioned earlier, virtual ADR is a game changer. And with the influx of complex commercial litigation coming into the court system, I don’t think that the courts are ready to handle the overflow of cases. The only solution will be to jump to ADR. Or they may actually go directly to ADR – after the lawyers and the parties begin to see that it’s impossible for the court system to handle the increased caseload.

The way ADR can handle it, and the way NAM can handle it, in particular, is to provide a technologically proficient alternative for the parties. I think videoconferencing is going to be very appealing to more and more lawyers and clients. And as it becomes even more sophisticated and mainstream, I think attorneys are going to come to see it essentially as the default position. In-person will become the secondary way. That’s the change I foresee happening, because it’s economical.

Another concept I foresee and encourage is the med-arb alternative. Mediation is terrific, but arbitration locks the door, so to speak. So, combining mediation with arbitration is a terrific way to reduce the areas of conflict that exist between parties. I personally don’t think that this approach has been sufficiently developed in the ADR field, but I think NAM is prepared and has been prepared to offer med-arb. But it ought to be suggested more often, because it will eliminate cases. The parties have to be encouraged to trust the process and know that the neutral will be thoroughly prepared and try to settle the case on consensual terms. But if it can’t be settled, then the parties will go before the experienced mediator, who’s now wearing the arbitrator’s hat, to finally resolve the case.

What I also would like to see in the future is an appeal process within ADR. I mentioned it earlier, but what I had in mind was that after an arbitration award is given, the loser – that is the unhappy side – has a very limited number of options they can do to challenge the award. So, there is a process called confirmation. The winner jumps into court and seeks to confirm the award so that they can enter a judgment. The loser might go to court to seek an order to disaffirm the award, but as I previously mentioned, the grounds for challenging an award are very limited. So, I’ve been encouraging the creation of an appellate process in arbitration that is a limited and focused arbitration procedure, but is a simple Hon. David B. Saxe (Ret.) is a and economical way. I neutral with NAM (National Arbitration and Mediation). Prior think an appellate process to joining NAM, he served as an would bring into the world associate justice, New York State Appellate Division, First Department, of ADR, and especially into for almost 20 years, and he is a highly the world of arbitration, honored and respected member of New York’s legal community. Reach a great many more cases him at dsaxe@morrisoncohen.com. than you have now. 