ADR Works
Mar 22, 2011 Updates
In these days of state budget cuts, the court systems around the state have put civil cases on the back burner to accommodate the criminal dockets. That means additional delays in civil cases getting put on trial calendars, and getting reached for trial. For plaintiffs with legitimate civil suits, that means that justice delayed is also justice denied. In the early 1990s, a new concept in civil litigation took root in Georgia. Alternative Dispute Resolution (ADR) was mandated and implemented in court systems around the state.
ADR allows civil court cases to be resolved without trials in the courts or with juries. Instead, the case resolved by ADR can be settled either through mediation, or through arbitration. I will describe both processes to you, as I have mediated hundreds of cases, and I have tried cases before arbitrators as well. Arbitration is similar to a non-jury trial in the court system, or a hearing before an administrative law judge. The parties or their counsel select an arbitrator to hear evidence in the case, and to make a written arbitration award after the evidence is heard. The rules of evidence normally apply in arbitration proceedings, and witnesses are called, and evidence is presented in a way similar to a court hearing.
After the arbitrator hears the evidence, an award is entered that could be dispositive of the case, and completely resolves the parties’ dispute. This process is known as binding arbitration. Once a binding arbitration award is filed with the clerk of the court in this state, it becomes as binding as a civil judgment.
Mediation is a somewhat different ADR process. The parties select a mediator, who then schedules a mediation. The parties appear with their counsel before the mediator, and the attorneys outline their client’s position in a way similar to an opening statement in a civil trial or hearing. The parties then break off into separate rooms for a caucus session, and the mediator meets with the parties separately to solicit settlement offers from each side. As the plaintiff makes a settlement offer, the defendant then makes a counter offer, until the parties reach a settlement, or reach an impasse. The process actually becomes similar to old fashioned horse trading during the mediation, as numbers get swapped back and forth in the form of offers and counteroffers to settle, until a settlement is reached. You must remember that no matter what type of emotional dispute the parties have in a case, most cases can be resolved through the payment of a sum of money. Once a figure is agreed upon, the parties then reach a settlement of the plaintiff’s claim. The settlement, if achieved, is nothing less than a compromise. The plaintiff is going down from his earlier settlement demand, and the defendant is paying more than he or she wanted to pay the plaintiff originally to settle the case.
Interesting enough, a fair settlement after mediation therefore becomes the product of a compromise, but it also is the product of offers that were made and generated as part of a fair and systematic process. If the parties reach an impasse, the mediator terminates the mediation, and reports that fact to the court, and the case is normally tried in the traditional later on.
If the parties reach a settlement of the case after the mediation, the mediator drafts a written settlement agreement, and the parties sign it. The attorneys then prepare a formal agreement for the parties to sign later that is filed with the court, but the case is actually settled and resolved at the mediation.
I have participated as an attorney in hundreds of mediations, and over ninety five percent of the cases that I have mediated have settled. I have participated in this process for the past twenty years, and I believe it truly works. It is an excellent way to conclude a civil case in a cost effective manner. There are several attorneys in the Middle Georgia area that work as skilled and trained mediators. If you have a civil case that you want to file and promptly get resolved, you should give mediation a chance. Many court systems in Georgia order mediation within so many days of the lawsuit being filed, so mediation is now a mandatory part of our legal system. In cases involving more than just the payment of a sum of money, mediation offers a means for the parties to fashion a settlement that is tailored to fit the parties’ needs. Your settlement revolves around your demands, which are fashioned to fit your particular situation. If the parties reach a settlement through a fair negotiation and bargaining process, that settlement is easier to implement than a jury verdict that may dissatisfy both parties in a case.
In short, ADR is a great and cost effective way to resolve a case without the time consuming and expensive route of a civil trial by jury.
Steven Harrell has practiced law in Perry, Georgia since 1989.
He is the author of The Unionist, A Novel of the Civil War and The Rifle Captain, A Novel of World War I. You may view his weekly column at stevenharrell.com. You may email him at sharrell@comsouth.net.
Responding to Pirate Attacks
Mar 4, 2011 Updates
Last month, pirates operating off the coast of Somalia hijacked a 58 foot yacht, the Quest, which was owned by American Scott Adam of Marina del Rey, California. A U.S. warship responded to the hijacking, and began to shadow the pirates after they took four Americans hostage. One of the pirates fired a rocket propelled grenade at the U.S. warship, and gunfire then broke out on the yacht. When U.S. Navy SEALS reached the Quest, they found that all four Americans on board had been murdered by the pirates. The SEALS then engaged the pirates in a gun battle, and killed two of them. The remaining 15 pirates were captured, and have been transported to the USS Enterprise off the coast of East Africa. These pirates will later be transported to the U.S., where they will be charged and tried with the offenses of murder and piracy on the high seas.
News sources indicate that gangs in East Africa are now turning to piracy, because the fishermen that began piracy operations in the area have made millions of dollars ransoming Western hostages they captured in pirate raids aboard merchant ships.
Criminal gangs have begun the practice of torturing hostages, beating them, and using them as human shields. Several weeks ago, a U.S. District Court sentenced a Somali pirate to 33 years in prison for hijacking the merchant ship Maersk Alabama in 2009. That hijacking ended when U.S. Navy SEAL teams killed two pirates that were holding the ship’s captain hostage.
The International Maritime Bureau in London reports that piracy incidents on the high seas increased 40 percent in 2009 from the year 2008. The number of attacks off the coast of Somalia doubled in 2009 from 111 to 217. Pirate attacks in the Gulf of Aden have caused commercial vessels to detour around the area, and the U.S., the European Union, China, Russia, and other nations have sent warships into the area to protect their commercial shipping vessels. Pirates are now hijacking ships and using them as mother vessels or offshore bases in the Indian Ocean. The International Maritime Bureau has recorded 33 attacks in the Indian Ocean since October of 2010.
The Obama Administration should adopt a policy and a strategy designed to change the pirate situation off the Horn of Africa. Pirate ships should be identified and sunk on sight by our submarines, warships, and naval aircraft. A shoot to kill order and rule of engagement should be issued to our Armed Forces whenever they contact any pirates on the high seas. Once a submarine or warship or fighter jet identifies a pirate vessel operating in international waters, the vessel should be treated as an enemy vessel and immediately sunk. The Western nations should publish and distribute leaflets in countries that harbor pirates, and the leaflets should advise that pirate vessels will be sunk on sight.
An even more aggressive approach should be made once pirate ports and strongholds are identified on shore. Once aircraft and satellite imagery reveals the existence of a pirate sanctuary, the harbor, river, or port should be heavily mined to prevent the pirates from operating there.
Would this type of strategy cause hardship in the fishing ports where these pirates operate? Absolutely. That is the point. Western nations should make the business of piracy become so cost prohibitive to pirate tribes and nations that they will have little choice other than to give it up. If legitimate fishermen are starved out of business because pirates operate in their waters, that is the cost of allowing pirates to operate in their home waters. Until a more aggressive strategy is adopted by the U.S. and other Western powers, these pirates will continue to operate off the Horn of Africa. They are continuing to operate because their piracy has become lucrative and profitable. While this is ongoing, world wide shipping and insurance costs and fuel costs will increase because of the activities of several dozen thugs operating in areas like Somalia. We can at the present only react to pirates after they have made their moves on commercial shipping, and that does not solve the problem of piracy. Until a more thoughtful and aggressive approach is employed, the problem will only escalate.
Steven Harrell has practiced law in Perry, Georgia since 1989.
He is the author of The Unionist, A Novel of the Civil War and The Rifle Captain, A Novel of World War I. Both are available at Amazon.com, and Barnes&Noble.com. You may email him at sharrell@comsouth.net.
Employment Territory Agreements
Mar 4, 2011 Updates
Let’s say you work for a medical supply company, selling specialty medical supplies to certain physicians in a Middle Georgia territory. You have a written employment contract. The contract limits or prevents you from soliciting business from the company’s customers should your employment terminate there.
Suppose the employer decides to terminate you after you have built up a customer base, and you decide to go into business for yourself, and form an independent company, and work the same customer accounts for the same customers you were working for with the old company. Can you do this? What happens if the old employer that has just terminated you files suit against you to seek an injunction to stop you from soliciting their old accounts? Who wins? Well, it depends.
The first issue to be addressed is whether such agreements are enforceable if the employer fires the employee, as opposed to the employee resigning his employment. Because the operative word here is “terminate,” it does not matter that the employee has been fired, laid off, or resigns. These contracts apply to all situations once the employee separates employment from the employer.
Georgia courts have traditionally applied close scrutiny to employment contracts containing restrictive covenants, and have upheld them only when the covenant is strictly limited in time, territorial effect, and activities prohibited. Beckman vs. Cox Broadcasting Corp., 250 Ga. 127 (1982).
Traditionally, Georgia courts divide restrictive covenants into two categories for purposes of review: covenants that are part of employment contracts, and covenants that are part of the contracts for the sale of a business. Employment contracts receive strict scrutiny by the courts, and are not blue penciled. That is, if a court is called to review the validity of the restrictive covenants in an employment agreement, the court will either uphold the entire contract, or the court will strike it down totally.
In order to have the restrictive covenant upheld in court later, the restricted activity must be reasonably related to the business interests the employer seeks to protect. Moore v. Preferred Research, 191 Ga. App. 26 (1989). Upon terminating employment, an employee has the right to take with him all the knowledge he obtained from the former employer so long as no property of the employer is taken. Under Georgia law, customers are not trade secrets. Textile Rubber & Co. v. Shook, 243 Ga. 587 (1979).
In order for the restrictive covenant to be enforceable against the employee, the contract must be drawn in such a way as to allow the employee to determine with some degree of certainty the extent of his prohibition at the time he executes the employment contract. Britt vs. Davis, 239 Ga. 747 (1977). In our example, if the employee was selling medical supplies in a seven county area in Georgia, the restrictive covenant, to be enforceable, should prohibit the employee from selling medical supplies for a competing company for a reasonable period of time in the same seven county area, after the employment terminates.
If the employment restrictions are found to be overbroad and unreasonable, they will not be enforced, as their enforcement by the courts would be contrary to the Georgia Constitution. McNease v. National Motor Club, 238 Ga. 53 (1976).
Another issue that frequently is raised in these types of contracts is a choice of law issue. Many contracts purport to state that they will be governed by the law of a foreign state. Because this type of contract, containing covenants against competition and disclosure, does affect the interests of this state in the flow of information needed to support business competition, the validity of such agreements is determined by the public policy of this state. Wolff v. Protégé Systems, Inc., 234 Ga. App. 251 (1998). Georgia courts will consistently apply Georgia law to these types of agreements, and the rules that allow these agreements to be enforced or rejected is the common of law of the State of Georgia.
It does not matter if the contract states it will apply the law of a foreign state. If the contract is to be enforced against a former employee that worked a Georgia territory, the Georgia rules of law shall be applied.
So to summarize from our example, the territorial agreement must prohibit a stated activity, and must conform its prohibition to a specific area for a reasonable period of time. If the agreement as drawn were to state that the employee would be barred from selling that company’s type of medical supplies in a seven county area of Middle Georgia for two years after separation of employment, the contract would probably be enforced against the former employee. If the agreement does not prohibit a specific activity over a stated area for a reasonable period of time, it will not be enforced against the former employee. Employees that work these types of jobs with written employment contracts should have these contracts reviewed by an attorney before they leave their jobs and decide to compete against their former employers.
It would be most unfortunate to leave a work situation, and to invest in a new business, only to get hauled into court and slapped with an injunction by a former employer.
Steven Harrell has practiced law in Perry, Georgia since 1989.
He is the author of The Unionist, A Novel of the Civil War and The Rifle Captain, A Novel of World War I. Both are available at Amazon.com, and Barnes&Noble.com. You may email him at sharrell@comsouth.net.
