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Sunday, December 20, 2009

Article Of Interest: No Strict Rules Of Evidence In Labor And Employment Arbitration, By Professor Michael Z. Green

I have written several previous posts on this blog about cases in which the Federal Rules of Evidence or state counterparts do not apply (see, e.g., herehereherehere, and here). What I have found in most of these cases, though, is that the judge will still look to the principles underlying the rules of evidence in making evidentiary rulings. For instance, in disability adjudications, many Administrative Law Judges make an inquiry similar to the Rule 702 inquiry in determining whether to admit vocational expert testimony (although there is a split on the issue). In a Board of Veterans' Appeals case from earlier this year, a court looked to Federal Rule of Evidence 803(7) for persuasive guidance on an evidentiary issue. And, under the residuum rule, many administrative judges will end up applying the hearsay rules to determine the propriety of administrative proceedings.

Before reading the recent terrific article, No Strict Rules of Evidence in Labor and Employment Arbitration, 15 Tex. Wesleyan L. Rev. 533 (2009), by Texas Wesleyan University School of Law Professor Michael Z. Green, I would have expected that the same held true in labor and employment arbitration proceedings. As the article makes clear, however, this has not been the case, and arbitrators need to change their ways.

In the introduction to the article, Professor Green lays out the the thesis for the article and what led him to write it. According to Professor Green,

As an evidence law professor and a labor and employment arbitrator, I have examined the complexity in applying the rules of evidence in an arbitration setting. My experience and research revealed a clear need to identify the appropriate considerations when applying the rules of evidence in arbitration proceedings. Both advocates and arbitrators can benefit from this clarity.

Professor Green then opens Part II of the article by noting that the issue of "[w]hether an arbitrator applies the rules of evidence usually depends on whether the parties have contractually agreed to do so." Of course, this begs the question of whether the rules of evidence should apply at arbitration proceedings, and Professor Green contends that "when arbitration occurs, as with bench trials, the need for strict compliance with the rules of evidence is obviated by the fact that there is no jury to be shielded from certain types of evidence." 

In fact, in Part II of the article, Professor Green contends that if arbitrators were to place too much emphasis on formal rules of evidence, it would take

away from some of the key reasons that parties agree to pursue resolution of their disputes through arbitration including informality, shorter time, and less costs. If the rules of evidence had to be strictly applied, this would make the arbitration process much more formalistic and it would add to the time and expense of completing the process which detracts from the purported benefits of arbitration.

As an example, Professor Green notes that

it has been argued that because of the therapeutic value of arbitration as a form of workplace dispute resolution, employees should be allowed to have some voice by telling their story even if it involves some aspects of information that would be excluded under the rules of evidence.

At the same time, Professor Green argues that 

this therapeutic value should also be balanced with the arbitrator's obligation to provide a fair and efficient hearing to all parties. The arbitrator should not allow all forms of evidence merely for its therapeutic value when this action could be perceived as acting with partiality to one side or to the arbitrator who benefits by receiving more compensation by extending the time for the hearing.

In Part IV of the article, however, Professor Green indicates that arbitrators are not engaging in this balancing. Rather, when an advocate objects to the admission of evidence during an administrative proceeding, the typical arbitrator response is to overrule the objection and merely say, "I'll take it for what it's worth." According to Professor Green, such rulings causes advocates to "lose confidence in the fairness or the arbitration process" and are "counterproductive to the goals of certainty along with the relatively inexpensive costs and speed in choosing arbitration to resolve the dispute." Professor Green thus posits that

arbitrators must say more than "I'll take it for what it is worth." Instead, arbitrators should tell the parties what he or she feels about the quality of the evidence based upon the arguments presented. An arbitrator could say the following in response to a hearsay objection: "Under the circumstances, this evidence will be admitted. However, based upon the arguments presented, this evidence will have little weight given its unreliability as hearsay that appears to have no appropriate exception."

Professor Green then concludes that

By admitting and considering the evidence for its limited value and communicating that to the parties, the arbitrator does not unnecessarily exclude evidence based upon rote application of the rules of evidence. The arbitrator also recognizes the underlying principles of various rules of evidence and informs the parties of how those principles may guide the arbitrator in assessing the evidence presented during the hearing. In adopting this approach, strict compliance with the rules of evidence would not be a component of arbitration. But, arbitrators could certainly apply the principles underlying the rules of evidence and respond to thorough evidentiary objections made by the parties' advocates by giving guidance as to how those principles will shape the arbitrator's consideration of the evidence in issue at the hearing. Then the benefits of informality, less costs, and certainty can still be adequately achieved in arbitration while recognizing that lack of judicial review, a focus on juror considerations, and the need for flexibility demands that literal application of the rules of evidence should not occur in labor and employment arbitration.

I highly recommend the article to those interested in this area of the law, and I especially hope that arbitrators read it and alter the way that they handle evidentiary issues. I sent an e-mail to Professor Green asking about what led him to write the article, and he responded,

I had joined a panel for one of the private ADR service providers a couple of years ago as a labor arbitrator and the service provider held a training session where they brought in advocates who represent both employers and unions.  One of their pet peeves involved concerns about arbitrators not responding to their legitimate evidentiary objections and merely saying, "I'll take it for what it is worth."  That was what led me to want to write the article. 

-CM

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