Variations on Arbitration Class 1

Administrative Give quiz Collect critiques Final exam, May 12, 9:00 AM Return journals at end Return negotiation exercise at end

Review Contracts of adhesion – rules not jointly made Employment arbitration Issues related to due process

Negotiation Exercise What were the interests? Of the fishermen Of the kids and parents BATNA What does this mean? Alternatives for fishermen Alternatives for kids and parents

Today I. Compatibility of Arbitration with negotiation II. Assessing the effectiveness of arbitration III. Final Offer Arbitration IV. Concerns/Issues with Final Offer Arbitration V. Repeated Offer Selection VI. Cost-Formula Arbitration

I. Compatibility of arbitration with negotiation How is making arbitration the last step in negotiation different from making “walking away” the last step? Walking away creates a lost benefit for both sides and thus creates a “contract zone” If parties believe arbitrator will compromise?

II. Assessing the Effectiveness of Arbitration Criteria for evaluating an arbitration procedure Incentives the procedure provides for voluntarily negotiating agreements Information the procedure induces the parties to provide for the third party Kinds of outcomes, both negotiated and imposed, the procedure produces

III. Final Offer Arbitration What is it? How does it work? What would be the impact of letting parties engage in FOA separately on each issue instead of forcing them to do it on the whole package?

IV. Concerns/Issues with Final Offer Arbitration Goals of FOA in terms of the criteria Encourage disputants to settle on their own Provides arbitrator genuine offers to evaluate Outcomes based on disputants’ preferences Problems with FOA One party rewarded for failure to agree Settlement based on preferences of only one of the disputants The “Zinger” problem Arbitrators undermine the process

V. Repeated Offer Selection How does it work? How might it improve FOA? How might it make FOA problems worse? How would it have to be used so as to be effective? Rarely request second offers What information should the parties be given as to defects in their original offers? Why?

VI. Cost-Formula Arbitration How does it work? How might this improve on conventional arbitration in terms of the criteria? How might this improve on FOA in terms of the criteria? What are the problems?

Next Time Non-arbitration approaches to dispute resolution Particularly the statutory strike