A-Rod, MLB and Games of Chicken

New York Yankees third baseman Alex Rodriguez is no stranger to controversy.  A-Rod, although never positive on a drug test, has admitted to past steroid use and is now being investigated by Major League Baseball for obtaining performance enhancing drugs from Biogenesis.  Milwaukee outfielder Ryan Braun already accepted a 65 game suspension, presumably from his dealings with Biogenesis and its owner Anthony Bosch, and according to reports, several other players will accept 50 or so game suspensions later today or tomorrow.

A-Rod’s case makes for a good study on case analysis and settlement.  Reports indicate that MLB wants to make an example of A-Rod  by giving him a lifetime ban because he allegedly lied to MLB investigators.  A lifetime ban from the game would invalidate his current highest-in-baseball contract with $90 million remaining after this season.  A-Rod always has a right of appeal to an arbitrator or Baseball Commissioner Bud Selig depending on which rule MLB issues the suspension (though the latter is less likely given that MLB issued the suspension in the fist place).  The punishment, absent a deal, is reported to be handed down tomorrow.

So what is each side looking at?  A-Rod has a few choices:

  • Let MLB issue whatever sort of suspension it chooses then appeal.  The appeal could go either way or simply be reduced and an arbitrated ruling is not appealable in Court (with limited exceptions).  So if it is a lifetime ban, A-Rod risks never playing again and losing millions in salary.
  • Cut a deal with MLB, negotiations for which are apparently underway.  Reports say the negotiated deal would be a suspension for the balance of this season and all of next season.  This would cost him about $36 million in salary (his salary declines in the later years of the contract).  He would then try to make a comeback after nearly 2 years off — adding in his injury time — and at the age of 39 when most players are in decline.  But he would still collect the remaining money on his contract, or at least try to.  A-Rod would have some certainty.
  • He could take an injury retirement today before any punishment is handed down.  Presumably, MLB cannot suspend a retired player or invalidate such a contract after the fact.  If they tried, he could appeal or sue.  Reports indicate that A-Rod’s rehab from two hip surgeries have left him a shell of a player.  The Yankees would allegedly be happy that his controversy is gone and most of the balance of the contract would be covered by insurance — and they lose a diminished player earning a high salary.  A-Rod would miss out on a chance for greater glory in the all-time home run standings where he is currently in 5th place, along with millions in potential performance bonuses under his contract.

MLB also has a few choices as well:

  • Issue the lifetime ban and let the appeals process play out.  That could take a long time and it is not clear whether A-Rod could play during the appeal. If baseball loses the appeal, its ability to suspend players without any positive drug test is severely hampered.  On the other hand, if so many players are willing to accept 50 game bans without a positive test, Anthony Bosch’s credibility and Biogenesis’ records (the proofs against the players) must be very good.
  • Cut a deal.  This is probably the best outcome for baseball since it guarantees certainty and meets the interests in suspending all these players (namely game integrity and its perception).

In a mediation, these would be the types of things discussed privately with both sides and we would work towards a deal that works for everyone.  Ultimately the decision is up to A-Rod and MLB, as it is in their direct negotiations.  Most people are risk adverse — they don’t like taking risks.  And most people like certainty.  It will be interesting to see how this plays out.

If you’re in a dispute and can not work things out, mediation is a good way to try and gain a resolution.  Contact me to find out more.

Divorce or Hit Man?

Divorce, for most people, is not an easy process.  Mediation does make the process easier.

However, a woman in Michigan (and a former NJ resident) decided that hiring a hit man to murder her husband was an easier way to resolve the issues she had with her husband.  According to an article in nj.com and video released by the Muskegon County Prosecutors Office, Julia Charlene Merfeld, 21, said to an undercover police officer: ” when I first decided to do this … it’s not that we weren’t getting along.  But … terrible as it sounds, it was easier than divorcing him.  You know, I didn’t have to worry about the judgment of my family, I didn’t have to worry about breaking his heart, all that stuff like this. It’s, like, how I got a clean getaway.”

She pleaded guilty to solicitation to murder on June 27. However, her husband and intended victim asked that she get no jail time at all.

Instead, Chief Muskegon County Circuit Judge William C. Marietti committed to cap her minimum sentence at six years. The maximum can be anything up to life in prison, depending on Marietti’s decision at Merfeld’s sentencing July 30.

I guess we can now use the tag line:  Divorce mediation — a better way to stay out of jail!

If you are interested in staying out of jail and mediating your divorce, please contact me.

Conservation of Energy in Conversation

Seth Godin has some sage advice today….

Conservation of energy in conversation

If you escalate (cut off in traffic, angry at the gate agent, frustrated at your boss), you’ve just added (negative) energy to a conversation.

If you escalate (high-pitched enthusiasm, a hug, encouraging words), you’ve just added (positive) energy to a conversation.

Once the energy is added, it has to go somewhere. Often, the person you’re engaging with throws it right back, or even increases it. A talented, mature person might take your negative energy and de-escalate it, or even swallow it and permit the conversation to calm down or end. But don’t count on it.

Sure, you can ‘win’ a conversation by overwhelming your opponent with energy they can’t handle. But of course, they’re not your opponent and you don’t really win. Being aware of the energy you add or take from interactions is a sophisticated technique that radically changes the outcomes of the conversations that fill your day. Add the good stuff, absorb the bad stuff and focus on the outcomes, not the bravado.

The Value of a Good Mediator

A question (or sometimes criticism) I often hear about mediation is that the parties could just negotiate the solution out by themselves.  In some cases, this is true.  However, in the majority of cases which reach impasse, a mediator can be very helpful.

Let’s take the recent settlement in the National Hockey League (NHL) player lockout.  While I won’t present all the issue at stake, as background the owners locked out the players union when their last contract expired.  The sides had been talking for about 5 months with little progress and a lot of animosity built up.  The season was on the verge of complete cancellation.

Enter super sports mediator Scot L. Beckenbaugh, deputy director for the Federal Mediation and Conciliation Service (FMCS).  Beckenbaugh had already helped with resolving other recent sport related labor impasses (National Football League referees and National Basketball Association players).  Both sides in the NHL dispute credit Beckenbaugh’s persistence in leading them to a settlement.  Beckenbaugh essentially kept caucusing (shuttle diplomacy) with the sides until they were able to sit across from each other and finalize a deal (or at least the framework).

Here’s the most insightful quote about how the mediator helped the process from Winninpeg Jets defenseman Ron Hainsey (emphasis mine):

“Scot was great for a number of reasons. When it got to points where you didn’t know what to do next – or you had an idea but you didn’t know if it might upset the other side – you could go to him and talk to him about it and there was a way to work your ideas through a third party who was able to really help the process.

If you need assistance with a dispute, please contact me.

SEC Approves FINRA’s Proposal for All Public Arbitration Panels

I’ve written previously about the Financial Regulatory Authority (FINRA) proposals for allowing consumer complainants in arbitrations to use all public arbitration panels.  Non-public (or industry) panel members are those who work within the financial services industry.  Claims for over $100,000 are heard by a panel of three arbitrators.  Studies have shown a perception among complainants that the FINRA arbitration process, often mandated by brokerage agreements, is biased against consumers at least in part by the participation of industry panelists.  Thanks to an approval from the Securities and Exchange Commission (SEC), claimants can now opt for a full public panel.

The recently enacted Dodd-Frank Act mandated that the SEC study the fairness of the “mandatory” securities industry arbitration process.  Whether this change will move the opinion of the SEC is open to debate.

New York Finally Embraces Irreconcilable Differences

New York state was the last state in the United States not to offer its citizens a no fault cause of action for divorce.  In August 2010, Governor David Paterson signed into law a bill which adds irreconcilable differences as a cause of action.  Property division, alimony, parenting and child support will need to be resolved before one party can swear under oath that the marriage has been irretrievably broken for 6 months.

FINRA to Propose Making All-public Arbitration Panels Permanent

Over two years ago, I wrote about a pilot program FINRA established to test all-public arbitration panels.  FINRA, the financial industry’s regulatory arm, will be submitting to the Securities and Exchange Commission a rule change proposal next month to make this option for claimants permanent.

The current pilot program involves 14 firms that agreed voluntarily to a set number of investor cases that did not involve individual brokers. The proposed rule would apply to all investor disputes against any firm and any individual broker. It would not apply to arbitration disputes involving only industry parties.

Roughly 60% of participants opted for the all-public panels.

Unattractive? Ugly? Maybe you should settle your lawsuit…

A recently published study by Cornell University indicated that “ugly” or unattractive people who are defendants in criminal trials are 22% more likely to be found guilty and are given longer sentences on average (22 months longer) than attractive people.  The scientists conducting the study tried to look at why this occurs.  Study co-author Justin Gunnell said:

Information processing can proceed through two pathways, a rational one and an experiential one. The former is characterized by an emphasis on analysis, fact and logical argument, whereas the latter is characterized by emotional and personal experience.  Our hypothesis was that if we identify the two groups, then the experiential people are more likely to focus on extralegal factors, which shouldn’t have any bearing on the legal process.  Attractiveness was the variable we used.

The study confirmed what it referred to as an “unattractive harshness effect.”  Jurors who processed information in more of an “experiential” manner were the ones who gave longer sentences and were more likely to convict.

Psychologists and sociologists have long known of the advantages which more attractive people have:  they are more likely to be hired and are generally paid more than less attractive people.  Hollywood is practically defined by attractiveness.

Most lawyers will say that the outcome of many trials hinges on how well the jurors or judge “like” the litigants, lawyers and witnesses who appear in front of them.  The trier of fact gives credibility or believes who they think is more attractive.

As I’ve indicated many times, settling a lawsuit or divorce matter is almost always in the best interests of all parties due to the unknowns of trial.  Part of the unknown results from human biases, some of which were detailed in this study.  We all like to think of a trial as “justice” but the reality sometimes is that it is a popularity or beauty contest.

If you would like to consider mediation to resolve your lawsuit or divorce, please feel free to contact me to discuss your situation further.

See a Real Mediation in Action

Most of my regular readers know I almost never have “war stories” of my mediations on this blog.  The primary reason why is confidentiality.  When my clients enter a mediation, they have an absolute expectation that what is said in the mediation room stays in the mediation room.  They do not expect their dirty laundry to be aired over the internet, even if carefully camouflaged by changing or omitting the names of the parties.  This level of confidentiality also makes it harder to market mediation.  How can I easily explain mediation by example?  There are plenty of law and court based television shows, but almost no mediation shows.

The Maryland Mediation and Conflict Resolution Office (MACRO) does an excellent job of marketing mediation.  To this end, they have produced an excellent video on different types of mediation.  The mediations feature actual disputants who have waived their confidentiality privilege and touch on different areas of mediation (commercial/business cases, divorce, family, community and peer [students in school]).  The common misconception about mediation is everything sitting around a campfire singing Kumbaya and wondering why we can’t all get along.  While most mediations are civil, the reality, as you can see in the video, is that mediations often involve difficult discussions, difficult decisions and facing the issues directly with your adversary.  The results of the process are usually a better relationship — even if it means ending it on better terms.

The video is in .wmv format and can be viewed by clicking here.

Please contact me to find out is mediation is right to resolve your divorce, family and elder issues or commercial dispute.

An Apology or Slap in the Face?

I have written before about the power and effectiveness of a sincere apology to help resolve a dispute. Now from West Virginia, a completely different way to resolve a dispute: a slap.

Stewart Altmeyer, a prosecutor in Kanawha County, was suspended without pay for one month for agreeing to drop a larceny charge in exchange for allowing the alleged victim to slap the defendant.

In a mediation, I (or most of my colleagues) do not allow violence to be the outcome of any mediation.