Adjunct Professor George Friedman wrote a blog post about the relationship between our nation’s founders and arbitration.
During the period after the Revolutionary War and prior to Washington’s inauguration, Samuel Adams urged that every treaty entered into by the new country contain an international arbitration clause.[3]
Ben Franklin’s biography states “He was also much consulted by private persons about their affairs when any difficulty occurred, and frequently chosen an arbitrator between contending parties.”
I couldn’t find John Hancock’s views on arbitration, but his namesake life insurance company uses an arbitration clause in its policies.
John Jay didn’t sign the Declaration of Independence, but he was our first Secretary of State and first Chief Justice of the Supreme Court. A biography states: “He proposed that America and Britain establish a joint commission to arbitrate disputes that remained after the war – a proposal which, though not adopted, influenced the government’s use of arbitration and diplomacy in settling later international problems.” However, this eventually resulted in the Jay’s Treaty[4] of 1794, which indeed called for arbitration.
Who was the Treaty’s primary architect? Non-signer and first Secretary of the Treasury Alexander Hamilton, who in describing this aspect of the Treaty said: “Is there any good objection to the mode of arbitration? It seems impossible that any one more fair or convenient could have been devised, and it is recommended by its analogy to what is common among individuals.”[5]
Nothing is known about the arbitration views of signer Benjamin Harrison, but his great-grandson and future President of the same name was a big fan of arbitration as a means of resolving international disputes. His September 3, 1890, Message to Congress Transmitting a Report Relating to International Arbitration said: “The ratification of the treaties contemplated by these reports will constitute one of the happiest and most hopeful incidents in the history of the Western Hemisphere.”[6]
Attorney Thomas Jefferson in 1771 represented a litigant in Bolling v. Bolling, a dispute over a Will. Apparently, the case was so complex that the parties submitted it to arbitration.
Similar to Benjamin Harrison, little is known about the arbitration views of signer Robert Treat Paine, but love of arbitration must have been in the bloodline because his namesake great-grandson was a big fan of international arbitration. Robert Treat Paine the younger was President of the American Peace Society, and the Robert Treat Paine Arbitration Conference was named after him.
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And our New President?A year ago, I said the ADR views of our next president were hard to predict. That’s no longer the case: President Trump is pro-arbitration! Why do I say that? As I’ve blogged before, President Trump believes in arbitration and used the process often as a businessman. For example, 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 2010. 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.
Since becoming President, Mr. Trump has demonstrated unwavering support for arbitration:
In March, he signed into law a bill nullifying an Obama-era Executive Order and regulation barring companies with federal contracts valued at over $1 million from mandating arbitration of Title VII or sexual harassment or assault claims. Exercising its authority under the Congressional Review Act (“CRA”),[8] the House of Representatives on February 2nd passed House Joint Resolution 37, to invalidate the Fair Pay & Safe Workplaces rule issued on August 25, 2016. It was then passed by the Senate on March 6, and signed by President Trump on March 27th, along with several other nullifications. The rule is now rescinded and a like regulation in “substantially the same form” cannot be promulgated thereafter unless specifically authorized by Congress. Moreover, disapproval under the CRA is retroactive; subsection (d) provides: “Any rule that takes effect and later is made of no force or effect by enactment of a joint resolution … shall be treated as though such rule had never taken effect.”
On June 2nd, the Centers for Medicare and Medicaid Services eliminated its regulation banning predispute arbitration agreements in nursing home admission agreements, and has dropped its appeal of a District Court preliminary injunction banning implementation of the original rule. The amended regulation was published in the Federal Register on June 5th. A CMS Factsheet leads with news that the prohibition on PDAAs is out, and then states the proposed regulation adds several requirements for PDAA use, all focused on clear notice and fairness.
The Department of Education published a Notice on June 16 announcing that it was postponing indefinitely the planned July 1 effective date of another Obama-era regulation, that would have banned mandatory predispute arbitration agreements and class action waivers in college enrollment agreements for schools receiving federal financial aid for student borrowers.
Also, the Trump Administration Department of Justice has been switching sides in some court cases, taking positions against those taken by federal agencies. In PHH Corporation v. Consumer Financial Protection Bureau, 839 F.3d 1 (D.C. Cir. 2016), the DOJ’s Amicus Brief filed last March ahead of the en banc oral argument held May 24th took a position against the anti-arbitration Consumer Financial Protection Bureau (“CFPB”). Also, the Acting Solicitor General on June 15th filed an Amicus Brief siding with the employers and against the National Labor Relations Board (“NLRB”) 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 is set for oral argument next Term and, like the CFPB, the NLRB will now have to represent itself,[9] reminding me of a scene[10] from “Blazing Saddles.”
And, last but by no means least, President Trump nominated and the Senate confirmed the pro-arbitration Justice Neil Gorsuch