2006/Vol. 5 No.1 - Hamline Law - Hamline University

2006] ARBITRATION: THE BASICS 11
arbitrator and the parties can design any useful arbitral process which
works for them to deal with the conflict. 38 It is not uncommon for cases
to be arbitrated within a few months from the origin of the conflict, not
years. 39 “Economical” because the prevailing belief is that overall
arbitration costs are usually less than traditional litigation costs. 40
Arbitration, at least in theory, is “without the delays and exorbitant costs
of litigation.” 41 “Fair” because notice and a hearing by a neutral decision
maker, chosen by the parties, satisfies due process. 42 Arbitration
provides a fair process which results in a just decision. This “fairness”
concept is sometimes referred to as “industrial due process.” 43 It is a
process that the parties feel they are due in order to resolve their dispute
because the parties had a hand in shaping the arbitral clause, delineating
which of their disputes would be submitted to arbitration. It is a process
that demonstrates party autonomy in that the parties agree between and
(last visited Oct. 25, 2005) [hereinafter AAA Rules].
38. ELKOURI & ELKOURI, supra note 35, at 293-94.
39. Scott S. Morrison, Consider Binding Arbitration to Resolve Your Next
Dispute, 40-MAY RES GESTAE 18, 20 (May1997).
40. See American Arbitration Association, supra note 11, at 7.
41. Thomas J. Stipanowich, Rethinking American Arbitration, 63 IND. L.J. 425,
433-38 (1988). But see Frank E. Massengale & Karen Kaler Whitfield, Arbitration:
Be Careful What You Wish For, 44 LA. B.J. 120, 121 (Aug. 1996) (citing Advanced
Micro Devices, Inc. v. Intel Corp., 885 P.2d 994, 1012 (Cal. 1994) (confirming
arbitration award)). Advanced Micro Devices, Inc. represents an extreme example
in which arbitration was not the efficient procedure it is hailed to be. Id. In this
case, “counsel originally estimated that the entire arbitration process should take six
to eight weeks to complete; however, four and one-half years later, after 355 days of
hearings and 42,000 pages of transcript, the arbitrator entered an award.” Id.
42. Shafii v. British Airways, 872 F. Supp. 1178, 1181 (E.D.N.Y. 1995); see
also American Arbitration Association, Consumer Due Process Protocol, Principle
1, available at http://www.adr.org/sp.asp?id=22019 (last visited Oct. 25, 2005).
43. See Stroehmann Bakeries, Inc. v. Local 776, Int’l Brotherhood of
Teamsters, 969 F.2d 1436, 1445 (3d Cir. 1992) (holding that an employer did not
violate industrial due process when it discharged an employee accused of sexual
harassment, when the employer investigated the charges and when the employee
had a chance to respond to the charges, had notice that his conduct could result in
discharge, was informed of the source of the charge, and was informed that he was
entitled to representation); Teamsters, Local Union 657 v. Stanley Structures, Inc.,
735 F.2d 903, 906 (5th Cir. 1984) (holding that the employer “had notice of the
grievances against it and an opportunity to be heard. It thus received industrial due
process”); see also Sprewell v. Golden State Warriors, 266 F.3d 979, 990 (9th Cir.
2001) (holding that the arbitration award “demonstrates that the NBA’s
investigation ‘complied with industrial due process’ and that Sprewell received a
full and fair hearing”).