Employment Arbitration Agreement is Enforceable after Employee Termination if Claims arise out of the Underlying Contract
Guest contributor: John Allgood
Two recent Court of Appeals cases deal with challenges to enforcement of agreements to arbitrate issues arising from previous employment contracts. In the first, the employee of a securities firm, a financial adviser, had previously been employed by a broker under a written employment agreement. The employee retired from the brokerage firm in 2007 but then continued to provide services to former clients under a different organization and fee structure. The brokerage firm mailed letters to the former employee’s clients urging them to remain clients of the brokerage firm. The letter stated in part: “[A]lthough you have developed a relationship with Jon v. Davidson, please ask yourself if it is in Your best interest to transfer your account.”
The employee filed a complaint seeking damages for the intentional tort of defamation by the broker based on the letter. The brokerage firm answered and moved to compel arbitration under the written employment contract with the former employee that included the following arbitration provision:
You agree that any controversy or dispute arising between you and [A.G.] Edwards in respect to this agreement or your employment by [A.G.] Edwards shall be submitted for arbitration before the New York Stock Exchanged, Inc., or the National Association of Securities Dealers, Inc.
The employee opposed the motion contending the dispute arose post-termination and did not fall within the scope of the arbitration provision and also challenging the enforcement of the arbitration agreement based on OCGA § 9-9-2(c)(9) which required that an employee separately initial an arbitration clause and further challenging the motion to arbitrate based on the fact the claim arose in tort as a personal injury and therefore was excluded from arbitration under OCGA § 9-9-2(c)(10).
The trial court granted the motion to compel arbitration and the employee appealed. Davidson v. A.G. Edwards & Sons Inc., A13A1115 (9/19/2013, 9/30/2013).
On review the Court of Appeals confirmed the trial court’s decision requiring arbitration. Citing the principles of FAA preemption, and prior supporting state court decisions finding preemption of OCGA § 9-9-2(c)(9) the court disposed of the OCGA signature requirement. See Langfitt v. Jackson, 284 Ga. App. 628,635 (3) (644 SE2d 460) (2007).
On the claim of exemption of “personal bodily injury claims” under OCGA § 9-9-2(c)(10), the Court noted that while this challenge had not been presented before, the law on preemption eliminates state laws that conflict with the provisions of the FAA that undermine the enforcement of private arbitration agreements. The Court concluded “ we find no reason why there should not be preemption in this regard as well.” See Results Oriented v. Crawford, 245 Ga. App. 432, 436 (1)(a) (2000). [See also the discussion in fn 3 related to the construction of § 9-9-2 (c) (10).]
The Court next considered the challenge to the enforcement of the arbitration clause based on post-employment (future) tort claims which the employee urged was not enforceable under the FAA because his claim was based on an intentional tort and further that defamation does not involve interstate commerce.
The Court again noted this argument was one of first impression but looked to existing precedent in a similar decision from the 10th Circuit.
In Brown v. Coleman Co., 220 F3d 1184 (III) … the court held that controlling question should be whether the alleged tort of defamation “touch[ed] the underlying contract…Or…did it involve significant aspects of the employment relationship….
Finding the language of the employee’s arbitration agreement with Edwards virtually identical to the language of the arbitration agreement in Brown, the Court sustained the ruling of the trial judge granting the motion to compel arbitration.
Accordingly, because the alleged defamation touched Davidson’s employment contract, the trial court did not err in granting A.G. Edwards’ motion to compel arbitration after his employment terminated. [emphasis mine]
The Court noted that the employee’s clients were not limited to Georgia Residents but did not reach the interstate commerce challenge referring back to the earlier discussion of the Brown decision and related cases.
In a similar case decided also in September, the Court of Appeals again granted a motion to compel arbitration under a written arbitration agreement of a defamation claim brought against an employer by a terminated employee. See Wedemeyer v. Gulfstream Aerospace Corp., A13A0836 (9/27/2013)
In that case the employee had agreed to the employer’s written arbitration agreement which provided specifically for arbitration of claims by “former employees” on disputes “regarding or arising from the employment relationship.”
The employee had been terminated for causing damage to an aircraft that he was operating while employed by the company. Again the employee challenged the enforcement of the arbitration provision because the actions where not “covered” by the arbitration agreement. The court disagreed:
Contrary to Wedemeyer’s contention, the Arbitration Agreement is not limited to disputes involving only applicants or current Gulfstream employees. Notably, the contract language at issue here unambiguously provides that the Arbitration Agreement applies to all employees who were employed by Gulfstream while the Arbitration Agreement or any version was in effect… it is clear that the Arbitration Agreement applies to disputes involving former Gulfstream employees.
The court noted that as a gatekeeper trial courts must determined whether claims are actually covered by the arbitration agreement before submitting the disputes to the arbitrator but that the trail court will not and should not consider whether the claim is tenable or not or otherwise pass on the merits of the dispute. See OCGA § 9-9-4(d). Any doubts about enforcement of arbitration agreements, the Court noted, are, under the FAA, to be resolved in favor of enforcement of the arbitration agreement. In Georgia this standard for the trial court to consider is not burdensome.
[u]nder Georgia law… almost any causal connection or relationship. Indeed, nothing more than a slight causal connection is required to show that a [claim] arose out of a specified [relationship] set forth in a contract.
In granting Gulfstream’s motion to compel arbitration, the trial court conducted a thorough review of the parties’ argument, properly fulfilled its gatekeeping role and properly resolved any doubts concerning the scope of arbitrable issues…[T]he trial court properly granted Gulfstream’s motion to compel arbitration because there [is] a causal connection between Wedemeyer’s claims and his employment with Gulfstream.
NOTE TO GEORGIA ARBITRATORS: In employment contracts containing a broad arbitration agreement covering claims arising out of or related to the employment relationship, then arbitration is appropriate for claims that arise after an employee has been terminated where there is a causal connection to the underlying contract and even where as here there are tort claims asserted, like defamation, but based on the action of the parties while in the relationship of employer and employee. Certain statutory provisions of the GAC requiring separate signatures or excluding future tort claims have been preempted by the FAA under rulings by the Georgia Courts.
Clayton State Mediation Team went on an October run that would make Reggie Jackson jealous. The Lakers began their run with an impressive showing at the Brenau University Eleventh Annual Mock Mediation Invitational Tournament. At Brenau, the team won first place Advocate/Client Team, second place Client/Advocate Team and Mediation Team, and third place Mediation team. Shannon Moultrie took home first place for best mediator while Matthew Blake finished right behind her in second.
The success continued as Clayton State travelled to Georgia State University’s 2013 Peacemaking Tournament. Moultrie and Blake continued to collect the hardware as both members took home the First Place Advocacy Team Award. Furthermore, Moultrie also added to her collection with a Second Place Mediator Award.
Most recently, at the 2013 International Intercollegiate Mediation Tournament at Drake University Law School, the Lakers won first place Mediation Team Award and sixth place Advocate/Client Team Awards. Again, Shannon Moultrie found success as she and Bertha Amosu won Second Place Individual Advocate/Client Award. Latangila Hodges-Bellamy joined previous award winner, Matthew Blake, with the eighth place Individual/Client Award. And lastly, Tamara Johnson took the individual Fifteenth Place Individual Mediator Award.
It’s probably safe to say that the Supreme Court of Georgia hears its fair share of constitutional challenges each year. But as 2013 nears its end and we wrap up our digest of the year’s ADR case law, one seemingly run-of-the-mill constitutional challenge caught our eye. Turner Cnty. v. City of Ashburn, 2013 WL 5508558 (Ga. 2013), involved a challenge to a provision of the Local Option Sales Tax Act that governs the negotiation process between counties, municipalities, and other qualified parties when agreeing on the allocation of tax proceeds in relation to renewal of a given Local Option Sales Tax.
The original statute included an ADR process as the last step in the negotiation process – a process which the Court previously upheld as constitutional. But in 2010, subsection (d)(4) of the Act was amended to add an additional step – optional judicial resolution – in the event the ADR process provided for in subsection (d)(3) reached an impasse. The Turner Court held that because the allocation of tax proceeds is an exclusively legislative power, the amendment to the Act providing for optional judicial resolution was a violation of the separation of powers, and thus unconstitutional.
This holding, while unremarkable, contained some discussion which might prove surprising to ADR watchers. In dicta, the Court seemed to suggest that if the process in subsection (d)(4) was more akin to arbitration than judicial resolution – and even perhaps if it were simply called arbitration – then it might pass constitutional muster. But that was not the case here, as the Court made clear:
“[s]ubsection (d)(4) does not refer to this process as arbitration. Subsection (d)(3), however, does require nonbinding arbitration if the parties are unable to reach an agreement on the renegotiation of the distribution of tax proceeds within 60 days of the commencement of renegotiation proceedings, demonstrating a recognition that the final decision must be one jointly reached by the parties even if reached pursuant to alternative dispute resolution techniques. We reject the notion that this process should be deemed binding arbitration and that, as such, the process passes constitutional muster.” (emphasis mine)
In other words, the language here seems to suggest that the crucial distinction in the constitutional analysis is almost purely nominal: the Court identifies the legislative power infringed upon as “the allocation and distribution of tax proceeds,” which, in order to be carried out pursuant to the separation of powers, should be “left to the discretion of those [political] entities and is not a matter for judicial determination.” But the Court goes on to imply that if that process were called “binding arbitration,” then it would pass constitutional muster — even though in principle, the idea of having a neutral third party, whether it be a judge or an arbitrator, impose a binding resolution on a dispute that has already been deemed purely political would seem either way to have the same violative infringement on the legislative powers.
However you read the language, this is an interesting case about the ways in which ADR processes function within the broader legal and political framework, and particularly, it showcases the advantages of ADR by exposing the impotence of judicial resolution in certain contexts, as here. Perhaps 2014 will see another amendment to the LOST Act in which a binding ADR process will prevail.
 OCGA § 48–8–80 et seq.
Over a year ago, we wrote a post lauding Richland County, South Carolina’s “Youth Arbitration Program,” a dark horse for the advancement of both American juvenile justice and the field of ADR. Happily, this year we can report that Georgia’s Juvenile Justice Reform Law (“JJRL”), which takes effect January 1, 2014, will take a similar step by formally incorporating mediation into the Georgia juvenile code.
HB 242, the bill that became JJRL, was based on three primary recommendations from the Special Council on Criminal Justice Reform for Georgians (“the council”), one of which was to reduce youth recidivism rates. ADR processes such as mediation have proven particularly effective at accomplishing this goal. (This was part of what made the Richland County ADR program so remarkable: it had reduced youth recidivism to 11 percent; by contrast, Georgia’s youth recidivism rate currently stands as high as 65 percent, which is fairly typical of state averages generally.)
The success of these ADR programs in the juvenile justice system is in part due to the fact that the majority of youth offenders commit only low-level crimes, but ultimately lack access to the rehabilitative services they need to learn, heal, and move forward. Mediation, then, offers a restorative approach that both demonstrates constructive problem-solving, and provides a therapeutic outlet for offenders and victims alike. Importantly, JJRL also requires the Georgia Department of Juvenile Justice to provide youth offenders with a continuum of services, including evidence-based programs aimed at reinforcing reduced recidivism.
As always in mediation, the parties under JJRL are not required to reach an agreement. But the same was true of the Richland County program, which, as of 2012, had seen 90 percent of its then-1,300 youth referrals successfully complete the program. And ultimately, these figures are more than just statistics: they represent positive changes in the lives of children, families, and communities. We hope that JJRL can help facilitate the same positive changes in Georgia. (After all, if South Carolina can do it, surely so can we!)
 O.C.G.A. §§ 15-11-20 through 25.
 The Pew Charitable Trusts Issue Brief, “Georgia’s 2013 Juvenile Justice Reform: New Policies to Reduce Secure Confinement, Costs, and Recidivism,” July 2013.
 The Pew Charitable Trusts Issue Brief, “Georgia’s 2013 Juvenile Justice Reform: New Policies to Reduce Secure Confinement, Costs, and Recidivism,” July 2013.
 There is no official national average of youth recidivism because each states defines recidivism differently; rather, youth recidivism rates are compiled by state. According to The Sentencing Project, a sampling of state recidivism rates includes: Alaska at 66%; Hawaii at 57.3%; Michigan at 37%; North Carolina at 56.6%.
 The Pew Charitable Trusts Issue Brief, “Georgia’s 2013 Juvenile Justice Reform: New Policies to Reduce Secure Confinement, Costs, and Recidivism,” July 2013.
Emory University School of Law is hosting the ABA Law Student Division Regional Negotiation Competition on November 2-3, 2013 at Emory. To make this event successful, Emory is asking members of the Atlanta and Georgia Bar to serve as judges for competition.
Emory is still in need of volunteer judges for both rounds on Saturday, November 2, 2013. The first round of the competition is Saturday, November 2, 2013 from around 8:30 a.m. to 12:30 p.m. The second round is the same day after a lunch break from around 2-6 p.m.
Breakfast and lunch will be provided to all judges and competitors, as well as snacks and refreshments throughout each shift. Also, a reception for the competitors and judges will be held at the end of the day Saturday to announce the teams going to the final round.
If you wish to participate in the competition or have any questions, please contact Jess Zeletes at firstname.lastname@example.org or (952)288-5002 by October 31. Please indicate which round you prefer to attend, but you are free to sign up for more than one.
We recently wrote a post, based on John Allgood’s piece, lamenting the Georgia Court of Appeals’ anti-arbitration holding in Miller v. GGNSC Atlanta, LLC, 746 S.E.2d 680 (Ga. Ct. App. 2013). But this week, Professor Allgood is back to point out that arbitration subsequently won a small victory in that same court. Here is our condensed version of his analysis:
In Penso Holdings Inc. v. Cleveland, A13A0957 (Ga. Ct. App. 2013), the Court held that the Georgia Debt Adjustment Act (the “Act”) did not preclude arbitration of the parties’ dispute, where plaintiffs, as a class, argued that their claims were based on the Act rather than on a breach of contract claim, and thus were not subject to the arbitration provision. Though the trial agreed with plaintiffs, the Georgia Court of Appeals reversed, and enforced the defendant’s Motion to Compel Arbitration.
On appeal, plaintiffs cited Attaway v. Tom’s Auto Sales and Hornsby v. Phillips for the proposition that contractual defenses would not be allowed to defeat actions provided for in consumer protection statutes. But the Court of Appeals distinguished these cases, noting that they contemplated specific statutory schemes – namely, the Fair Business Practices Act and the Georgia Sale of Business Opportunities Act – both of which expressly provided for an independent action that could not be limited by contract. The Court then rejected the idea that an arbitration provision was a “contractual defense” as contemplated by Attaway and Hornsby.
Noting that the arbitration provision in the Agreement at issue mandated arbitration for disputes “related to” to the Agreement, the Court applied the rule that the wording in a contract is to be given its usual and common meaning. Ultimately, it concluded that:
In accordance with the definition of “related” and pursuant to the allegations of the complaint, Cleveland’s claim that Penso violated Georgia statutes regulating the business of debt adjusting was connected to the debt settlement agreement. And Cleveland’s attempts to void the arbitration clause are unavailing, as the agreement contained a severability clause providing that “If any of the above provisions are held to be invalid or unenforceable, the remaining provision will not be affected” (emphasis added).
Note to Georgia Arbitrators: statutory provisions can expressly prevent the parties from contracting for arbitration. Under the FAA, the Supreme Court has made it clear that enforcement of an agreement to arbitrate disputes is part of the federal policy to encourage arbitration and will be followed by federal courts unless there has been a clear and express prohibition by Congress in the body of a statute that prohibits arbitration. This Georgia Court of Appeals decision makes plain that in Georgia courts, a similar standard will be applied where enforcement challenges are not based on clear statutory language preventing the parties from entering into arbitration as a legitimate means of dispute resolution. It also makes clear that the process of arbitration is not a “contractual defense” as suggested by the plaintiffs in this case, but rather is a process for the resolution of the dispute.
In 2010, the Supreme Court held in Stolt-Nielsen that “imposing class arbitration on parties who have not agreed to authorize class arbitration is inconsistent with the Federal Arbitration Act.” It seemed clear that the Stolt-Nielsen court held that class action arbitration could never be assumed where the contract was silent on the issue. Three years later, in Oxford Health Plans LLC v. John Ivan Sutter, the court was faced with the same issue but decided that the arbitrator’s interpretation of the contract was binding regardless of whether the parties specifically mentioned class action arbitration in the contract. Admittedly, Sutter initially seems like the court is granting a victory for the “little guy” by giving arbitrators this “un-checked” power to grant class action arbitration, but this victory will most certainly be short-lived.
The Sutter court held that when parties ask for an arbitrator to interpret the contract, the arbitrator’s findings will be binding as long as the arbitrator is acting within his interpretive role. Furthermore, the Court, quoting Enterprise Wheel, states, “It is the arbitrator’s construction [of the contract] which was bargained for; and so far as the arbitrator’s decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his.” Sutter goes on to state, “The arbitrator’s construction holds, however good, bad, or ugly.”
Going forward, it appears that the only question for the Court to decide is whether the arbitrator interpreted the contractual agreement while the Court ignores the accuracy of that interpretation. Less than three months ago, the Eleventh Circuit in Southern Communication Services, Inc. v. Thomas applied the Sutter holding and acknowledged that the court will not overturn an arbitrator’s conclusion that an option for class action arbitration exists if the arbitrator came to that conclusion through interpreting the contract. On its face, it seems that the “little guy” has stuck it to “the man” with this Supreme Court’s decision by giving those seeking class action an opportunity to be heard, but the long-term effect of Sutter will be detrimental to those hoping to engage in these types of class actions. Currently, with regards to the Thomas case, Southern Communications has petitioned for a writ of certiorari regarding the arbitrator’s ability to find class action arbitration within the reading of a contract that is silent on the issue. Southern states in its petition, “By precluding judicial review of a decision simply because non-determinative contractual analysis happens to have been included by the arbitrator, the Eleventh Circuit has thus narrowed the scope of judicial review well beyond the parameters established by this Court.”
Because the Sutter court has now turned a blind-eye to the “correctness” of the arbitrator’s contractual interpretation, companies and parties who wish to avoid class action arbitration will now explicitly do so within the contract itself. According to some, it is only a matter of time before the Sutter decision is deemed irrelevant as those parties who wish to avoid class action arbitration will now do so by explicitly stating so within the contract itself.
Brenau University, in Gainesville, GA, held its 11th annual Brenau University Mock Mediation Tournament earlier this month. Ten teams from six colleges and universities from North Carolina and Georgia participated in the three round event with the top award going to Clayton State University and the top individual award going to Dylan John of Georgia Southern University. The tournament also featured training on transformative mediation from Mary Lou Frank, Ph.D. to get participants ready for the new conference mediation round.
From here, many of the competitors will be traveling to Drake University Law School in Des Moines, Iowa to participate in the National Intercollegiate Mediation Tournament on October 31 through November 02. With an emphasis placed on education and fellowship, this undergraduate national tournament, sponsored by the InterNational Academy of Dispute Resolution, intends “to give students a real life experience as mediator and as an attorney and client.”
During the partial federal government shutdown, the Federal Mediation and Conciliation Service (“FMCS”), like many federal agencies, made news for being a victim of the Congressional deadlock. For the FMCS, an independent government agency tasked primarily with resolving labor disputes between unions and government, the shutdown meant postponing ongoing mediation sessions across the country and furloughing all but “a handful of people.” But the story of an FMCS employee whose leave was not prompted by the recent shutdown, and the FMCS’s excessive spending in a period of apparent austerity, has managed to fly mostly under the radar – until recently.
Berkina Porter was the director of administrative services at the FMCS until she was placed on leave in February 2012. The action was apparently taken in response to Porter’s repeated objections to the agency’s dubious spending practices. A look at just a few of the alleged abuses of funds – corroborated by hundreds of pages of documents and an independent Inspector General – will make your head spin.
To begin with, “about two dozen of the agency’s approximately 240 employees had purchase cards, [but] none had the required authorizations or training on how to use them.” One of those purchase cards, belonging to an agency customer service specialist named Marcus Lawson, was using company funds to make monthly payments on a $29,400 three-year Lincoln MKS lease. (Of the lease payments, Lawson later stated that “that was the nature of the way things were going on at the time.”) This despite the fact that the median annual salary of an FMCS employee is $120,000. During an annual conference, the agency was paying a group of private mediation instructors $1,500 a day – $163 an hour – to train mediators; part of that amount was hourly compensation for time spent traveling, against Federal Acquisition Regulations. Contracts with inflated labor values were allegedly being given to mediators based on personal relationships.
The list goes on: in a two-year period, the agency bought at least 38 LCD projectors costing up to $9,500 each, as well as over $30,000 worth of picture frames. About $9,000 annually was being spent on bottled water. $29.95 a month was being paid to get the Golf Channel in the agency’s own DirecTV subscription. Charges showed up at grocery stores near employees’ homes on the weekends. And despite there being no record of invoices or even a contract with a certain company called The Papers Edge, FMCS had paid that company almost $21,000 for “phone system installation and other services” in 2009, and a total of $85,000 over a two-year period. That company had been incorporated in Pennsylvania in February 2008 by a then-top official of the FMCS.
In response to pressure from Porter, some time around late 2010 FMCS director George Cohen agreed to allow David Berry, the Inspector General for the National Labor Relations Board, to review the agency’s purchase card program. In February 2012, Berry confirmed in a letter to Cohen that agency purchase cards had been used “to circumvent FMCS procurement process and other internal controls,” but ultimately, did not recommend disciplinary action. After the allegations became public, the agency released a statement saying that the records in question only surfaced because of a “disgruntled FMCS employee.” Cohen vaguely stated that the agency had taken “immediate actions” to comply with federal regulations.
FMCS is well known to folks in the ADR world, but this negative press is a poor introduction of a relatively unknown federal agency to the general public. For over 65 years, FMCS has helped pioneer mediation and supported the ADR movement. Now that the federal government has reopened, the FMCS will be able to resume its important work, and hopefully, these revelations will not undermine the mission of this agency.
 Katherine Gregg, “With federal mediators furloughed, R.I. pension talks on hold” (Oct. 15, 2013) (available at http://www.providencejournal.com/breaking-news/content/20131015-with-federal-mediators-furloughed-r.i.-pension-talks-on-hold.ece )
 Sean Reilly, “Whistle-blower on leave; culprits off ‘scot-free,’” Federal Times (June 23, 2013) (available at http://www.federaltimes.com/article/20130623/PERSONNEL03/306230007/Whistle-blower-leave-culprits-off-scot-free-)
 Luke Rosiak, “Part 1: Bureaucrats at tiny federal agency FMCS buy legions of luxuries with purchase cards,” Washington Examiner (Oct. 1, 2013) (available at http://washingtonexaminer.com/bureaucrats-at-tiny-federal-agency-fmcs-buy-legions-of-luxuries-with-purchase-cards/article/2536649)
 Luke Rosiak, “Part 4: Federal officials cede power to contractors who write themselves sweetheart deals,” Washington Examiner (Oct. 4, 2013) (available at http://washingtonexaminer.com/federal-officials-cede-power-to-contractors-who-write-themselves-sweetheart-deals/article/2536808)
 Rosiak, Part 4.
 Rosiak, Part 1
 Luke Rosiak, “Part 2: Reckless spending goes straight to the top at FMCS,” Washington Examiner (Oct. 2, 2013) (available at http://washingtonexaminer.com/reckless-spending-goes-straight-to-the-top-at-fmcs/article/2536695)
 Rosiak, Part 2
 Luke Rosiak, “Part Three: FMCS executives forced whistleblower to retract fraud complaint,” Washington Examiner (Oct. 3, 2013) (available at http://washingtonexaminer.com/fmcs-executives-forced-whistleblower-to-retract-fraud-complaint/article/2536768)
 Rosiak, Part 3.
Forget a daunting start to the week; for Alex Rodriguez, baseball’s most recently-embattled superstar, this particular Monday is a daunting start to the rest of his life. The New York Yankees shortstop is currently facing a 211-game suspension (which, according to one sports writer, would “effectively [end] his career”) imposed by Major League Baseball after Rodriguez, along with twelve other players, were implicated in the Biogenesis banned-substance scandal. But Rodriguez has been playing out the current season pending an arbitration hearing, scheduled to begin today. And, according, to several news outlets, A-Rod has been looking forward to this day ever since his punishment was handed down on August 5.
The proceeding, which will likely last several days, is technically informal and allows Rodriguez to be represented by both the Players Association as well as his own private legal team. The hearing will be presided over by seasoned attorney, mediator, and arbitrator Frederic Horowitz, who will essentially take on the roles of both judge and jury: determining the credibility of witnesses, deciding what evidence to admit, and making the final decision in the case. There are three possible outcomes: (1) Horowitz upholds the suspension; (2) he overturns the suspension; or (3) he reduces the number of games Rodriguez is suspended for.
Not unlike his fellow pro athlete Lance Armstrong before him, Rodriguez has maintained defiant confidence that the truth will come out, and when it does, it will prove him innocent. But unlike Armstrong – who initially rose to the challenge of submitting to arbitration, only to throw in the towel at the last minute and admit his guilt – Rodriguez is, perhaps tellingly, following through with the hearing with unwavering aplomb.
But what Rodriguez must be prepared for is the fact that he is now playing a unique game: in arbitration, the process is not predictably regulated, as in litigation; nor is the outcome mutually beneficial, as in mediation. That distinctive combination of negatives can prove disagreeable to big-name, big-ego types who may have a distorted sense of accountability.
Given this, one might wonder how and why Rodriguez ended up in arbitration in the first place.
Agreements to arbitrate labor disputes, such as this one, are a common creature of employment contracts, typically arising from a collective bargaining agreement (“CBA”) between the labor union (here, the Major League Baseball Players Association, or “MLBPA”) and the management (here, the MLB). So the short answer is, if Rodriguez wanted to appeal MLB’s disciplinary action, he had no choice but to submit the claim to arbitration. And that is precisely what he did.
Rodriguez’s tenacity may or may not say something about the evidence against him. Given that all twelve of the other players connected to Biogenesis by the same scandal accepted their suspensions without appeal, it is tempting to conclude that A-Rod, the lone objector, has some seriously righteous evidence up his sleeve. He has indeed vehemently denied ever having been treated by Biogenesis or its founder, Anthony Bosch. On the other hand, we know that MLB will have Bosch testify against Rodriguez at the hearing, and that MLB will introduce copies of electronic communications between Rodriguez and Bosch. So then, it may be that Rodriguez’s tenacity is indicative not of righteousness, but of self-righteousness; a reflection of a stubborn misunderstanding of the trial-like zero-sum-game nature of arbitration.
But keep in mind that the CBA only requires Rodriguez to submit his appeal to arbitration before taking any other legal action; it does not prevent him from suing MLB after the conclusion of the arbitration proceeding, if indeed Rodriguez is unhappy with the outcome. A-Rod’s claims, legally independent from the arbitral decision and award, would likely be for injunctive relief as well as compensatory and punitive money damages. However, other analysts argue that Rodriguez will not sue, because the case would simply be dismissed due to the CBA’s negotiated grievance procedure.
The bottom line is, we could be hearing a lot more from ol’ A-Rod in the future, regardless of how Horowitz’s imminent decision comes out. All things considered, it seems likely that this arbitration hearing will determine the fate of this baseball superstar’s future in the Hall of Fame. Stay tuned.
 Mark Feinsand, “Yankees Slugger Alex Rodriguez’s Arbitration Hearing Begins Monday as he Appeals 211-game Ban,” Sept. 28, 2013, http://www.nydailynews.com/sports/baseball/yankees/a-rod-excited-arbitration-hearing-monday-article-1.1470615
 E.g., Id. (“I’m excited,” Rodriguez said Saturday as he spoke with reporters in front of his locker at Minute Maid Park. “This has been a burden; a big burden. Let’s get it on.”)
 Tim Brown, “Alex Rodriguez, 12 Other Players Suspended by MLB for Biogenesis Ties,” Aug. 5, 2013, http://sports.yahoo.com/news/alex-rodriguez–12-other-players-suspended-by-mlb-for-biogenesis-ties-190349300.html
 Steven Marcus, “A Look at the Alex Rodriguez Arbitration Hearing,” Sept. 28, 2013 http://www.newsday.com/sports/baseball/yankees/a-look-at-the-alex-rodriguez-arbitration-hearing-1.6160195
 See “2012-2016 Basic Agreement”, available at http://mlb.mlb.com/pa/info/cba.jsp (although the terms of the MLB-MLBPA CBA make it clear that “[t]he decision of the Arbitration Panel shall constitute full, final and complete disposition of the Grievance appealed to it,” Art. XI, § B, p. 44, that same CBA also provides that “[a]ny procedures or remedies available to the Parties for the resolution of disputes arising under said agreements that were available as of their respective execution dates shall continue to be available and not be altered or abridged in any way as a result of this Basic Agreement,” Art. XI, § A(1)(a)(iii), p. 39, thereby preserving the parties’ right to sue in a court of law, pending adherence to the contractual procedures first).
 E.g., Michael McCann, “Analyzing the legal fallout from Alex Rodriguez’s 211-game suspension,” Aug. 5, 2013, available at http://sportsillustrated.cnn.com/mlb/news/20130805/a-rod-suspension-legal-fallout/
 See Eugene Freedman, “A-Rod, the JDA and the CBA,” Aug. 4, 2013, available at http://www.hardballtimes.com/main/blog_article/arod-the-jda-and-the-cba/