Adjunct Professor George H. Friedman wrote a post for Arbitration Resolution Services Inc. about how the leadership of different presidents has influenced arbitration over the years.
A year ago, I published an update to my 2016 blog post, “The Presidents and Arbitration: from Washington to Obama – and Beyond,” renaming it “The Presidents and Arbitration: from Washington to Trump.” The material about President Trump and arbitration was in large part predictive. No longer. The past year demonstrates that the President is indeed a big fan of arbitration. The material that follows about the past presidents is mostly repeated from my 2016 blog post; the President Trump section is new.
There’s a wonderful book, The Presidents Club, covering the unique and sometimes surprising relationships among the fraternity (sorry, Carly and Hillary, no sorority yet) of current and former presidents. For example, who knew that Bill Clinton and the Bushes are very close, with “W” often referring to Bill as his “brother of another mother”? Or that Richard Nixon sought advice from Herbert Hoover over whether to contest his razor-thin loss to JFK in 1960? Or that Jimmy Carter elicits a common reaction – not entirely flattering – from the former presidents? These rarely told stories are of course fascinating, but this blog post covers a different kind of relationship: that of the presidents and arbitration. As we approach Presidents Day, I offer this primer on the little-known and often surprising relationships between our presidents and this form of alternative dispute resolution.
George Washington: think arbitration is new?
People have for years referred to arbitration as a bold new way of resolving disputes. I demonstrated in an early 2016 blog post that arbitration goes way back. For now, let’s prove the point by looking at our first[1] president’s Last Will and Testament. That’s right, George Washington’s Will from July 1799 calls for arbitration to resolve disputes among his heirs:
I hope and trust that no disputes will arise concerning [my Will]; but if, contrary to expectation, the case should be otherwise from the want of legal expression, or the unusual technical terms, or because too much or too little has been said on any of the devises to be consonant with the law, my will and direction expressly is, that all disputes (if unhappily any should arise) shall be decided by three impartial and intelligent men, known for their probity and good understanding; — two to be chosen by the disputants — each having the choice of one — and the third by those two — which three men thus chosen, shall unfettered by Law, or legal constructions, declare their sense of the Testator’s intention … and shall be binding as if issued by the U.S. Supreme Court.
Ulysses S. Grant, the Civil War and arbitration
Ever hear of the Treaty of Washington of 1871? Neither had I. It seems that after the Civil War the U.S. asserted claims against the British, whose shipbuilders had supplied warships to the Confederacy. Things got serious. According to History Central, “at one point, a claim was made that Britain was responsible for half the cost of the war, and that the U.S. would consider Canada proper payment. This shocked the British and they realized they had better come to some agreement soon.” At the urging of President Grant, the Treaty included an arbitration clause to resolve the claims. The matter was submitted to arbitration in Geneva before a five-person arbitration tribunal. Arbitrators were designated by the heads of state of Britain, the United States, Brazil, Italy, and Switzerland. How did it turn out? Although in the end they got to keep Canada, Britain had to pay the U.S. $15,500,000 – over $305 million today – and say they were sorry.
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Teddy Roosevelt: Tippecanoe and ADR, too
A believer not only in arbitration, but mediation, too, the first President Roosevelt seemingly coined the phrase “alternative dispute resolution.” While the Hero of San Juan Hill has a reputation for rarely shying away from a fight, TR was actually a firm believer in peaceful conflict resolution. For example, in 1902 he settled via arbitration a financial dispute with Mexico[3] over the Pious Fund of the Californias (don’t ask, but here’s the award). Also, he received the Nobel Peace Prize for successfully mediating the Treaty of Portsmouth, ending the 1904-5 Russo-Japanese war.[4] In fact, the official Nobel Prize Website refers to TR by a nickname you’ve probably never before heard: “Imperialist and Peace Arbitrator.”
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FDR: another President Roosevelt, another arbitration advocate
During World War II, it was essential that labor peace be maintained to ensure production of war-related materiel. What did FDR do? He reinstated the National War Labor Board to serve as final arbiter of labor disputes. In exchange for giving up their right to strike, the unions gained an impartial arbitration process to resolve their disputes with management. The Board had the Presidents Club written all over it. The original Board was a World War I creation of President Woodrow Wilson. Its first director was none other than former President William Howard Taft.
Barack Obama: I first thought he might be fond of arbitration – but he wasn’t
When he was first elected, I thought President Obama might have a fondness for arbitration. Why? As a young attorney with Davis, Miner, Barnhill & Galland, in Chicago, President Obama in 1994 argued successfully to enforce an NASD arbitration award in the Seventh Circuit in Baravati v. Josephthal, Lyon & Ross, Inc., 28 F.3d 704 (7th Cir. 1994). Alas, the former President did not support arbitration. This is perhaps because the Democrats largely oppose mandatory arbitration, introducing anti-arbitration bills every session of Congress. This lack of support from the former president was demonstrated every so often. For example, as described in more detail below, Mr. Obama signed the Fair Pay and Safe Workplaces Executive Order 13673 in July 2014 barring companies with federal contracts valued at over $1 million from mandating arbitration of Title VII or sexual harassment or assault claims.[10]
The New Stuff: Donald Trump – A President who likes and uses arbitration!
As I’ve blogged before, President Trump believes in arbitration and uses the process. In 2012, he won $5 million in a dispute with a former Miss USA contestant who defamed the pageant, which he owned. President Trump in 2015 filed an arbitration claim against NBC after the network cancelled a contract to televise the Miss USA and Miss Universe pageants. He also won an Internet domain name arbitration, back in 2011. And I read in the Indisputably blog that even Mr. Trump’s agreement with campaign volunteers had a predispute arbitration agreement (“PDAA”) giving the campaign the unilateral right to require arbitration of disputes.
Without doubt, President Trump by his actions in 2017 demonstrated that he is pro-arbitration. You can read chapter and verse in my December blog post, A Final Report Card on My 2017 Arbitration Predictions: “Pretty, Pretty, Pretty, Pretty Good! but here are just some examples:
The Trump Administration Department of Justice has been switching sides in some court cases, taking pro-arbitration positions against those taken by federal agencies. For example, the Acting Solicitor General last June filed an Amicus Brief siding with the employers and against the National Labor Relations Board[11] in Epic Systems Corp. v. Lewis, 137 S. Ct. 809 (2017), three cases pending at the Supreme Court involving whether the Federal Arbitration Act prevails over the National Labor Relations Act when it comes to enforcing class action waivers in employment arbitration agreements. The case was heard October 2nd, with the DOJ arguing against its own federal agency.[12]
Last year, President Trump nominated, and the Senate confirmed Supreme Court Justice Neil Gorsuch.[13] As I blogged a year ago, based on the few cases I found, Judge Gorsuch of the Tenth Circuit appears to have been pro-arbitration. Although he asked no questions at oral argument, the first real test of Justice Gorsuch’s arbitration views will be in Epic Systems.
