Arbitration: The Public's Right to Know
This column will focus on the privatization of dispute resolution in arbitration. Congress enacted The Federal Arbitration Act that required arbitration in all matters involving interstate commerce where there was an arbitration agreement many years ago. In the 1980's the United States Supreme Court upheld that legislation. Since that time there has been extensive privatization of a very large amount dispute resolution. With rare exception Court proceedings are public proceedings, but arbitration is not. Juvenile Court proceedings are a recognized exception, but, in most other cases a judge must carefully examine and articulate policies for privatizing dispute resolution. The public has a very legitimate interest in dispute resolution for many policy reasons. For instance, in criminal cases, the defendants are entitled to a speedy and public trial. There is little to be said for resolving disputes in which the public has a very legitimate interest behind closed doors.
Most legislative bodies have adopted "sunshine laws" so that the business of almost all governmental bodies are open to the public. This recognizes that it is not a good idea for matters of public interest to be debated and decided behind closed doors. It is very important for the public to have access to information regarding the resolution of significant disputes. The resolution of a dispute, when decided by a court, results in a precedent. The reasons for deciding a case a certain way in one instance will provide good reasons for deciding it the same way if similar circumstances arise again. Precedent has been an extremely important element in the preservation of a consistent body of law in the Anglo-American system. Stare decisis assures consistency. Public trials and the reporting of the results enable the general public to formulate a decision making process in order to comply with the law. Christopher Columbus Langdale instituted the case method of Law Study at Harvard University in 1871. That method quickly spread to law schools all across the nation.
Harvard Professor Oliver Wendell Holmes, Jr. who would later become Chief Justice of the United States Supreme Court, stated that "law is what a court does." If all important commercial disputes continue to be resolved behind closed doors; what will commercial law be fifty years from now? What will employment law be fifty years from now? In arbitration, the results of the dispute resolution are not usually available for public scrutiny. Law Schools cannot examine the process by which arbitration decisions are reached. The similarity of the words arbitration and arbitrary is frightening. The decisions of arbitrators are not reported and cannot be systematically collected. Law Schools cannot instruct students on the meaning of arbitration results. Lawyers do not have access to the results of arbitration, to analyze for future use in advising clients.
The First Amendment to the United States Constitution has been construed to require public access to this type of critical information. We seldom hear, however, of news media filing First Amendment lawsuits in order to gain access to arbitration proceedings. The State of Delaware undertook to have its court proceedings involving commercial disputes resolved by Chancery Judges who would conduct proceedings similar to
arbitration. They would deny access to the public. The Supreme Court of the United States that had decided that it was permissible for Corporate America to write contracts requiring the persons with whom they do business to arbitrate their disputes decided that Delaware could not use such proceedings. This appears to be totally inconsistent and appears to overlook the policy problems concerning the privatization of commercial disputes in arbitration.
Corporate America-the large corporations-have now constructed elaborate "dispute resolution" procedures to deal with their employees and their customers. The dispute resolution is more cumbersome than court proceedings. Disputes are resolved behind closed doors. Even if a large corporation grossly mistreats one or more of its employees, that dispute is not likely to gain the public eye and public attention that it deserves. There is no appeal from the results of arbitration. Therefore, there are no appellate decisions that are available to the public.
Arbitration deprives the public of critical information. It conceals from the public important aspects of dispute resolution in matters of extreme importance to the on-going affairs of this nation. It is not just a matter of depriving individuals of their day in court-it is a matter of depriving the public of critical information concerning how disputes are resolved. It represents abdication of responsibility by the Judicial Branch of government.