Hotel & Motel Management - November 3, 2008 - (Page 10)

10 Legally Speaking IN THE details Arbitration has pros, cons Looser rules than court Binding decision Two recent case studies By Karen Morris H&MM Columnist H&MM November 3, 2008 | HotelMotel.com www.HotelMotel.com/digital_edition To litigate or arbitrate—that is the question or most people, a root canal is preferable to a day in court. A viable alternative is arbitration, popular in franchise arrangements, employment contracts and collective bargaining agreements. Arbitration is a dispute resolution method in which a third party—an arbitrator—is chosen jointly by the disputants to F hear the evidence and decide the case in private. No spectators; no fears of damaging publicity. Courts are bound by laws of evidence—technical rules that determine what types of testimony are and are not admissible at trial, with the goal of weeding out unreliable evidence. Arbitration is much looser, dispensing most of the detailed rules in fa- vor of a less complicated process traversable without a law degree. One other big difference between courts and arbitration is post-decision proceedings. A judge’s decision can be appealed repeatedly. In arbitration the decision of the arbitrator is typically binding, meaning no appeal. Win, lose or draw, both sides move on with their life. ©2008 Hilton Hotels Corporation Who says you can’t choose your family? Nine distinct brands. And not a mother-in-law in sight. Not that we don’t love in-laws, but we understand. We understand that choosing where to invest isn’t just about investing your money, it’s about investing in a relationship. And when you invest in the Hilton Family of Hotels, you’re investing in more than a property. You’re investing in a philosophy, a promise to be hospitable® When you . invest in one of our nine distinct brands, you’re backed by more than a powerful network of support, you’re backed by a family. So no matter which brand you choose to develop, the Hilton Family will always be there for you. For franchise opportunities, visit hiltonfranchise.com or call 1-800-286-0645. In addition to franchising, we also offer Hilton Management Services, providing strength in numbers and a family tied to performance. For inquiries, please visit hiltonmanagementservices.com. So what’s the downside? Arbitrators are not bound by law, so the outcome may be unpredictable, yet it is binding. With court, if a judge errs on applying the law, an appeal will correct the problem. This safeguard is virtually nonexistent in arbitration, eliminated in favor of ﬁnality, lower expenses and faster resolution. The moral here is to pick your arbitrator carefully. Practically the only grounds for a court to overturn an arbitration award are bias on the part of the arbitrator or fraud committed by one of the parties. Two recent cases demonstrate these principles. The director of ﬁnance at the Radisson Hotel Waikiki was terminated for alleged sexual harassment. He began a lawsuit against the inn for discrimination. The letter of agreement he signed when he was hired included a mandatory arbitration clause. As a result, the employee’s sole remedy was arbitration; the case in court was dismissed. A written agreement between Choice Hotels International and a potential operator of a Quality Inn contained a clause requiring arbitration for “any controversy or claim arising out of or relating to this agreement.” The contract required the company to renovate a building before it could be operated as a Quality Inn, but the improvements were not made on time. Choice began an arbitration proceeding to terminate the contract and recover its lost revenue. The arbitrator decided in favor of Choice, but the would-be franchisee objected and sought a court ruling negating the arbitrator’s decision. Finding neither bias nor fraud, the court refused to hear the case, appropriately deferring to the arbitrator’s decision. Like most things in life, arbitration has pros and cons. Consider its merits and decide whether it is for you. hmm@questex.com Karen Morris is a lawyer, municipal judge and Distinguished Professor at Monroe Community College in Rochester, N.Y., where she teaches hospitality law. Contact her at kmorris222@yahoo.com. CIRCLE NO. 128 http://www.HotelMotel.com http://www.HotelMotel.com/digital_edition http://www.hiltonfranchise.com http://www.hiltonmanagementservices.com http://www.hiltonfranchise.com

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - November 3, 2008

Hotel & Motel Management - November 3, 2008 Contents The Rate Debate Accor Defines Motel 6 Prototype Rollout Holiday Inn Eyes Upscale, Timeshare Perspective Economy Sets Tone at The Lodging Conference Mellow Vibe Meets Bold Design at HD Boutique Expo IH/M&RS to Focus on Going Green Legally Speaking Sales Clinic On Finance Travel Trends Cornell Insights Franchise Law HotelWorld Update Trends & Stats Energy Star Update Energy Star Update An Industry Connected People on The Move Annual GM Survey Point-of-Sale Systems IH/M&RS Product Preview Outdoor Lighting Refrigeration Marketplace Ad/Editorial Index Classifieds Checking Out

Hotel & Motel Management - November 3, 2008

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