16 minute read
Legal
Contract Dispute Resolution Provisions Are Not One-Size-Fits-All
Go beyond boilerplate and get the right dispute resolution clause for business contracts
by Andrea Marconi
As businesses focus on growth in the post-COVID future, this is a good time to take stock of legal affairs. It is important for companies to review their legal health and contracts from time to time to ensure that all appropriate legal protections are in place and properly documented. When contracts are updated or new ones drafted, however, the focus is often centered on key terms involving payment and scope of work. Although these terms are vital, it is a mistake to ignore “boilerplate” terms as unimportant or “standard.” Dispute resolution clauses are critical and one size does not fit all. Having the right contract language can save significant cost and headaches later.
A dispute resolution clause is a written understanding between parties about what will happen if a disagreement arises and outlines steps for resolving issues before they escalate. Including dispute resolution clauses in contracts helps prevent parties from immediately running to the courthouse to resolve disagreements, which is an expensive and often lengthy process. Too often, however, parties insert a standard dispute resolution clause simply requiring arbitration and think that is sufficient. Arbitration, however, is not always the best option, and there are other options to consider before or in place of arbitration.
Parties must first decide the forum to resolve disputes. Contracts with a multi-tiered approach are becoming popular. These provide a mechanism to resolve disputes informally prior to filing arbitration or litigation. For example, the parties can first require informal negotiations between business representatives (with or without lawyers) after formal written notice of a dispute is provided. This often helps resolve disputes more quickly and cost-effectively and allows the parties to craft appropriate business resolutions before becoming entrenched in conflicting legal positions. Also, for longer-term contracts, requiring upfront informal negotiations helps parties quickly mend and maintain future working relationships.
Either in lieu of informal negotiations or as a second step if negotiations fail, parties can require mediation prior to further action. In mediation, a neutral third party helps the parties facilitate negotiations, generally during a half- or full-day meeting. A skilled mediator frequently helps parties resolve disputes and reach decisions that are mutually beneficial to both whereas the decision by a judge or arbitrator favors one party over the other. Parties can also hire a mediator with expertise in a particular industry, if needed.
If a dispute cannot be otherwise resolved, the parties may require arbitration instead of litigation. Whether arbitration is preferred to litigation depends on several factors, including the type of dispute.
For instance, in simple contract disputes, arbitration may be favored as it can be faster, more efficient and more flexible than litigation. Also, if the dispute involves technical or specialized expertise, the parties can retain arbitrators with knowledge in the desired field rather than a judge unfamiliar with the issues. Arbitrations are also confidential, which may be important depending on the dispute and whether avoiding public attention is desired.
Unless the parties otherwise agree, however, arbitration decisions cannot be appealed like court decisions. Thus, parties risk being stuck with a negative decision and no recourse. Arbitration is often more fact-driven, so cases with primarily legal issues (e.g., interpreting contract language) may be better for judges. Although arbitrators can make early legal rulings, many seem to favor deciding cases at the factual hearing after weighing all the evidence and reach a decision that “splits the baby” in some regard. Courts are also better suited for emergency relief, such as restraining orders and injunctions. It is also generally more expensive to file an arbitration demand because the national arbitration associations impose significant filing fees (often thousands of dollars vs. hundreds to file a lawsuit). The parties must also pay the arbitrator’s hourly fees. Thus, despite common misconceptions, arbitration is not always better, faster or cheaper. Businesses should carefully consider the nature of likely disputes under contracts and the appropriate dispute resolution mechanism for them.
Parties can also draft contract language that may discourage litigation and increase risks for filing frivolous claims. Such provisions include requiring lawsuits to be filed in a business’s home jurisdiction, waiver of jury trials, damages limitations and requiring the losing party to pay the prevailing party’s attorneys’ fees.
A well-drafted dispute resolution clause can save businesses significant resources when legal disputes arise, and allows for a more collaborative approach to resolve disputes so that parties can get back to doing business. An effective and experienced attorney is critical to ensure businesses have dispute resolution clauses that meet their needs.
Attorney Andrea Marconi serves as vice chair of Business Litigation at Fennemore. Her areas of practice include business litigation, healthcare and real estate. fennemorelaw.com
BASHAS’ COMMUNITY SUPPORT CARD
As an added way to fundraise for their organization, more than 1,400 nonprofits, schools and churches utilized the grocer’s Community Support Card program last year. Each participating nonprofit has a specially designated set of grocery gift cards that are distributed to supporters. When supporters reload their gift cards, 6% of the reloaded amount is donated back to the organization. In 2020, Bashas’ Family of Stores gave back more than $72,000 to these organizations through this program. bashas.com/ourcommunity/communitysupport-card
Tyler Butler (“Tyler Butler | Giving in Style”), founder and CEO of 11Eleven Consulting, is a corporate social responsibility practitioner and expert leader in the corporate citizenship space. She has served on numerous national and local boards and is often cited as a subject matter expert by Forbes, Entrepreneur, U.S. News & World Report and more. 11elevenconsulting.com givinginstyle.net
Bashas’ Purpose Drives Social Change
by Tyler Butler
Bashas’ Family of Stores was founded in 1932 by two brothers. And to this day, Bashas’ is still family owned. Now on its third generation of leadership and with more than 100 stores across Arizona under multiple brand names, Bashas’ has been an integral and long-standing component to Arizona’s growth.
From the very beginning, Bashas’ has been committed to giving back and uplifting Arizonans. In fact, giving back to the community is a founding principle of the company, dating back to the matriarchs of the Basha family. Their core belief was that in order to have a successful, thriving business, you must support those around you to create a better community for all.
Bashas’ focus is on supporting local nonprofits that are doing work in the communities it serves. Education, hunger relief, health and human services, veteran services, community enrichment, and disaster relief are critical areas of concentration. Bashas’ strives to support as many organizations as it can annually, using a variety of different fundraising and outreach programs that have been developed over the years.
Often ahead of its competition where social impact efforts are concerned, Bashas’ was the first grocer in Arizona to provide special shopping hours for seniors, recognizing early on that this population would be more vulnerable to COVID-19. This type of forward-thinking action has led the grocer to other groundbreaking initiatives. From its in-kind donation program supporting emergency response teams and nonprofits to its emergency meal programs that have aided the Navajo Nation and St. Mary’s Food Bank, Bashas’ is always thinking ahead about the communities it operates in.
Sustainability has also been an important ongoing initiative to the operations of Bashas’. Through partnerships with local organizations to divert food waste and feed hungry families, Bashas’ Family of Stores’ Grocery Rescue program diverted more than 1.24 million pounds of food from landfills to more than 75 nonprofit agencies in 2020. Representatives from local food banks, churches and schools regularly pick up produce, bakery, deli and dairy items so that hungry families in need can consume the perishable items before their expiration date.
“We have been recycling since the ’70s,” says Edward “Trey” Basha, president and CEO of Bashas’ Family of Stores. “We always strive to reduce our company’s footprint through a number of sustainability and recycling efforts. We’re always looking for ways to improve, through technology, operations and new ideas.”
This proclivity toward innovation is also apparent in Bashas’ signature Charity of the Month program. “We want to do our part to share what resources we can to help those who especially need it,” says Basha. Through Bashas’ Charity of the Month program, selected nonprofits are featured throughout Bashas’ stores, which accept donations from customer at their registers. One hundred percent of the donations they collect go directly to the featured nonprofit.
Bashas’ not only raises valuable funds through this purposedriven marketing effort, but it also encourages the nonprofits to share the campaign messaging with their constituents. In 2020 alone, Bashas’ Charity of the Month program raised more than $2.2 million for Arizona nonprofits. “While many businesses decided to focus their fundraising support solely on pandemic relief, we remained steadfast in our commitments to our Charity of the Month program in addition to pandemic relief support,” says Basha. “We knew local nonprofits were continuing to experience strong fundraising challenges and were counting on us.”
Basha credits the increase in Charity of the Month donations to a technology upgrade that invited customers to donate through PIN pads at checkout, rather than relying solely on cashiers asking each customer individually. “The holidays were an especially challenging time for so many families, and the pandemic only exacerbated that,” says Wells Fargo Lead Region President Don Pearson. “At the same time, the resiliency and generosity of the human spirit has become the true ‘heartbeat’ of our community. It inspired us to team up with Bashas’, Feeding America and Arizona food banks to make the holidays a bit brighter.”
Among the nearly two dozen organizations benefitting from the grocer’s 2020 Charity of the Month campaigns were American Heart Association, A New Leaf, Arizona Humane Society, Banner Children’s Hospital, Southwest Autism Research and Resource Center and The Salvation Army.
“Last year was a challenging one for so many individuals and families,” says Basha. “Seeing the incredible generosity of our customers — and Arizonans as a whole — is a silver lining.” Since the company’s founding in 1932, Bashas’ Family of Stores has given back more than $100 million to charities across Arizona. The company has plans to continue its fundraising efforts and continue to live by the words of its founders: “When we prosper, Arizona prospers.”
SAFETY PROTOCOLS FOR BUSINES Workplace Quick Tips to Cool Hot Heads in the Office
by Doc Elliot
Face it, the times we are in are rife with conflict. If you work in an office — any office — you are well aware of office politics. People don’t get along well; Human Resources always has a challenge up their sleeves and yadda yadda yadda. What happens when the headlines are bubbling over with tense internal conflict?
Serious social and political issues divide households and the workplace, and sensitively addressing these issues in today’s climate requires sensitivity, skill and, often, professional intervention. Since we all stress so much upon the “winwin” situation in developing proactive strategies to improve interpersonal communication and lessen the propensity for personnel blow-ups at work, here is a roundup of the top five essential tips for quickly cooling heads in the face of escalating conflict at work.
After all, we have to work at the same place, day in and day out. There’s no point in keeping an argument alive if you have to see the same person the next day. Right?
Take it as an occupational hazard. However, as long as everyone is working under the same roof and toward a common goal of keeping the workplace peace, things should go smoothly. For this exercise, we referenced several common scenarios at the offices, but these tips can be applied to defuse disagreements pretty much anywhere — to easily resolve any conflict at the workplace, at home, or other social situation where unexpected tension flares up. 5. Assume the role of peacekeeper. Those in a position to resolve a conflict at the workplace should listen to both sides. Some employees play the victim card, but it’s important to listen to everyone — and remain unbiased. Even if there’s a personal preference for one employee over the other, it’s important to remain neutral. Doing so will help in identifying the exact reasons that led to the inflamed situation in the first place. 4. Try to establish a communication bridge. It’s important to get both parties to talk. We know that workplace conflicts often lead to terribly draining passive-aggressive cold wars that can deeply fracture workplace culture and lead to unhappy employees and unproductivity, which is why it’s so important to identify, address and resolve even the smallest micro-aggressions when they happen. To do that, everyone has to get involved and opened up about the conflict. Of course, it will start with pointing fingers, but there will be a resolution when both employees or parties have conveyed their concerns and everyone feels equally listened to and heard. 3. There’s always a common ground. People should consider: What’s the point of arguing or having a conflict at the workplace when they know they will have to deal with the same person the next day? Look at the bigger picture and know that there is always a common ground. Find it.
2. There is no harm in compromising. Compromising takes a lot of courage. Often, people are not so submissive because of their alter ego. For the sake of common grounds and working together, however, it’s more productive to give in a little. Those in a leadership position can set the example by taking the first step toward compromise, themselves, with grace and flexibility. It will inspire their colleagues to harness the same emotional mindset. As a result, the company will miraculously evolve into a group of people working together as a team. 1. The realization factor. In the end, the most important tip for de-escalating conflicts at work is the realization factor. After all, we are human beings; we are made of complex emotions that either balance or unbalance our work profile. This is exactly why different schools of management proposed the idea of having a Human Resources department at companies.
In the maelstrom of productivity, we often forget the very central role of a Human Resources manager is to work with people. The job of the Human Resources department is not just about monitoring employee performance, managing their pay scales and holidays. The most important aspect of human resources is to manage “humans” as a resource. We are all valuable, and we need help from time to time to hone our abilities to work in a company. The HR team is a company’s varsity team, coaches and support staff. Business leaders should support their HR team and ensure they know the importance of their role. It’s leadership’s role to communicate the culture and expectations for the company from the top down, and HR has a unique responsibility and opportunity to help effectively cultivate whatever that value system is.
A nationally renowned Federal Crisis Negotiation Specialist, Doc Elliot is founder and president of Phoenix Training Group. Since 1976, Phoenix Training Group has been the nation’s leader in workplace violence prevention training, customizing effective anti-violence training programs for corporations across all industries. phoenixtraininggroup.com
Bruce Weber is founder and president/CEO at Weber Group. Weber brings more than 20 years of experience to the for-profit and nonprofit community, working with startup, growth and mature organizations. His focus is in strengthening organizations through strategic planning, organizational development, leadership and board development. He is a BoardSource Certified Governance trainer and a founding partner of the Nonprofit Lifecycles Institute. webergroupaz.com
Embrace the Unknown
The first article in a series on Change: The Provider of Opportunity
by Bruce Weber
In 1959, “The Twilight Zone,” a TV program, debuted in the U.S. The show was built around creating an experience surrounding the unknown. The show’s actual description was “It is the middle ground between light and shadow, between science and superstition, and it lies between the pit of man’s fears and the summit of his knowledge. This is the dimension of imagination. It is an area which we call the ‘Twilight Zone.’”
The “pit” of our fears and the summit of our knowledge is something that continues to resonate today in the business world. We are so often faced with deep uncertainty about our future that we are sometimes driven into doing nothing. This impasse makes it difficult for us to recognize our inaction, but, rather than running from it, we should learn to embrace the uncertain. While it is human nature to be fearful of what we don’t know, it is sometimes helpful to take a deep breath, step back, and allow the circumstances to sink in.
I had the chance to visit Omaha Beach in Normandy, France, a few years ago. As I listened to the guide recount the story of what the military encountered when coming ashore, I could not imagine the horror of the unknown as the soldiers approached the beachhead. Despite the calamity, chaos and loss of life, there were still those who examined the situation, accepted what was happening, and allowed their creativity to examine what one could do to survive. So, how do we begin the journey to accept the unknown and move forward?
First and foremost, we must accept that there will always be unknowns in our future. It would be great if there were a road map to success that we could all follow and arrive at our predicted destination, but that’s not likely. The sooner we accept encountering the unexpected as a part of the journey, the sooner we can move ahead.
Second, we must treat the unknown as an opportunity to question. Leaders should question who their company is, the “why” they exist, and how not knowing everything offers an unbiased freedom to explore. Business leaders should communicate this thinking to their staff and encourage them to relinquish their fears into exploration. Yes, there are basic core needs like keeping everyone employed, ensuring profitability and keeping customers happy, but in uncertain times, those remain front and center and an integral part of the exploration.
Finally, as the leader of your organization, according to Jon Gordon, author of The Power of Positive Leadership, “it’s not just about what you can do, but what you can inspire, encourage, and empower others to do.” Those who are leaders should embody confidence to use this time of the unknown to think, create and explore. Ten years from now, there will be people who have achieved extraordinary success in every field of endeavor. While we don’t know who they will be, one thing is sure — they won’t be people who have played it safe and stuck to “business as usual.” Rather, they will be people who have continued to stretch themselves, to forge new ground despite the unknown and unpredictability it invites, and to risk failure in the process.
I brought home as a small souvenir a stone from Omaha beach, and it sits on my desk. Every day it serves as a reminder of the brave soldiers who battled the unknown on that stormy day. They had little choice but to consider the possibilities that lay ahead, not knowing for certain the future. There are so many things we can’t predict, so we must embrace the unknown — and once our path becomes clear, so does the horizon.
