Resources: Ch. 3 and Ch. 4 of Legal Environment of Business: Online Commerce, Business Ethics, and Global Issues; law libraries and databases from the internet. Scenario: Solar Co. Inc., a solar panel manufacturing and installation company, has recently encountered a series of scandals and bad publicity relating to defective solar panels, poor workmanship, and employee allegations of harassment by executives within the company. One claim resulted in a two-year trial which Solar Co. lost; all other claims were settled out of court. Solar Co. enters into a contract with XYZ Media to prepare a 6-month national advertising and public relations campaign to help restore its tarnished reputation at a cost of $600,000. XYZ Media launches the campaign, and it is successful for the first two months until XYZ’s computer servers are hacked and all client information is lost because XYZ failed to have adequate backup systems in place. In addition, social media account information and passwords were compromised, resulting in derogatory and inappropriate posts being made on all of XYZ’s social media accounts for several hours. Because XYZ was managing Solar Co.’s social media presence at the time, Solar Co.’s social media accounts were also taken over by the hackers for a brief time and filled with damaging posts. XYZ issues a public apology; however, Solar Co. wishes to terminate the contract with XYZ and receive a refund of the $200,000 it paid for the first two months of the campaign due to the damages caused by the computer hack. XYZ refuses to cancel the contract or issue a refund, insisting that it can successfully continue the campaign and re-create all of the material that was lost. Solar Co. refuses to pay any further amounts due under the contract and has already begun seeking a new media relations firm to re-launch the campaign. Part I Write a 525- to 700-word recommendation to Solar Co.’s CEO advising whether Solar Co. should: file a lawsuit and proceed to trial try to reach a settlement with XYZ Media, or use a method of alternative dispute resolution (ADR) Your analysis should specifically discuss each of the nine factors provided in the “Contemporary Environment Cost-Benefit Analysis of a Lawsuit” feature found in Ch. 4, “Judicial, Alternative, and E-Dispute Resolution.” Provide a clear explanation and reasoning for your recommendation based on the facts of the scenario. Would your recommendation be different if you were advising XYZ Media’s CEO? If so, how? Part II Solar Co. intends to use arbitration agreements with all clients, subcontractors and employees in the future. Write a 350- to 525-word memo to Solar Co.’s CEO explaining the arbitration procedure and the enforceability of arbitration provisions under the Federal Arbitration Act. Include a recommendation as to whether arbitration agreements should be used in the future to reduce Solar Co.’s legal risk and why. Parts I & II should be submitted as one document. Click the Assignment Files tab to submit your assignment. Cite scholarly references. One scholarly reference must be from the University Library. Format your paper consistent with APA guidelines.

 

Conflict Management

Name:

Institution Affiliation:

Date:

 

Part 1

A Legal opinion to Solar Co.  on whether to File a Civil Suit or to Seek an Alternative Dispute Resolution

Litigation is a tool for protecting and enforcing individual rights. However, before Solar Co. considers it as the way to protect its legal rights, costs of doing so should first be assessed. Leave alone the economic and financial consequences, litigation is expensive and inefficient as a dispute resolution tool.

Solar Co.  should go for alternative dispute resolution as solution to its legal disputes with XYZ Media. Alternative dispute resolution is a mechanism of resolving disputes other than through the Courts. The forms of alternative dispute resolution are mediation, negotiation, arbitration and conciliation (Lipsky, 2015). Alternative dispute resolution can be contrasted with litigation. It is cheap, fast, efficient and relational as compared with litigation. It is also confidential and not subject to public attention. This is important since Solar Co. is already facing negative publicity challenges.

ADR will offer the company the much-needed privacy in the dispute with the relevant media company. Litigation attracts a lot of negative media outbursts and considering that the Solar Co. is suffering from the same publicity, it should not go for any resolution mechanism that further injures its reputation. Positive publicity boosts customer confidence but negative one destroys customer base. Conflict management goes to the heart of tolerance. There is need to manage or prevent conflicts to avoid the adverse effects that it causes (Lipsky, 2015). The negative effects of conflict include stress, anxiety, and tensions. It cannot be overemphasized that communication has a significant role to play in conflict resolution. It has been noted that negative and poor communication in many times leads to disagreements and inevitable conflicts. Communication forms a critical part of alternative dispute resolution system.

Solving dispute through a civil suit is an expensive venture for Solar Co. This is in terms of costs of litigation and time wasted. Litigation takes a lot of time as compared to ADR. Moreover, it consumes a lot of money in terms of legal fees. Since Solar Co. has already used substantial amount of money particularly $200,000 in trying to counter negative publicity, it should now focus on minimizing costs of operation by solving disputes amicably as they arise and not through tedious and expensive civil suits (Nonet, 2017). Legal costs and litigation generally is in essence unsustainable in the long run. The company should consider arbitration as dispute resolution in the circumstance and as an alternative to high costs of litigation, publicity and destruction of relations.

When Acting for XYZ Media

I would similarly advise them to go for ADR (Nonet, P., Selznick, P., & Kagan, 2017) as a dispute resolution strategy. Litigation is expensive in many ways as discussed above. In case they go for litigation and they lose the lawsuit to Solar Co., which is more likely than not, they will incur heavy costs including costs of the litigation. Arbitration or negotiation can serve them well and safely. A good dispute resolution system for example Alternative Dispute Resolution should aim at preventing disputes. When dispute prevention fails, such disputes should be resolved timely, amicably, cost effectively and in a relational way. Litigation destroys relations as it is adversarial in nature and not relational as with arbitration and other forms of alternative dispute resolution.

 

Part 2

 

From: AZC Attorneys at Law

To: The CEO Solar Co.

Subject: Arbitration Procedure and its Enforce-ability under the Federal Rules

Date: 23/12/2018

Dear Sir,

Generally, arbitration starts when parties submit to solve their conflicts through arbitration. This essentially ousts the jurisdiction of the courts on the same parties and subject matter. Arbitration disputes are brought before a neutral third party for resolution. The neutral third party is called the arbitrator. He or she hears the evidence and arguments made by the disputants and makes an independent judgment. The decision of an arbitrator is final and cannot be challenged in a court of law.

Arbitration should be concerned and focused on the creation of harmonious working relations. Conflict resolution protocols should be enacted as strategies of conflict resolution. Organizations’ leadership to resolve potential disputes should also be relied on. Team leadership should negotiate and resolve emerging disputes in a relational way. Professionalism should be promoted as it can act to reduce conflicts in the workplace. Alternative dispute resolution including arbitration, negation, and conciliation should be encouraged and adopted. This is because it is simple, efficient, speedy, relational and time conscious as compared to litigation. Conflict avoidance should never be tolerated as it can occasion behaviors which are harmful and detrimental to the organizations’ goals. The best way to manage dispute in the work place is to prevent it, and when conflict arises, it should be solved amicably and in a speedy way.

Enforceability of Arbitration

Arbitration judgments are final and conclusive as per the federal rules. However, there are exceptions to this rule. An arbitration judgment can be challenged in a court of law if it was obtained by fraud, incorrect interpretation of the law, public policy, lack of independence and breach of principles of natural justice.

Recommendations

I recommend Arbitration to be used to solve disputes in Solar Co. However, it should be undertaken within the confines discussed below

Prevention Procedures

It is normally said that prevention is better than cure. The same applies even in the area of conflict management. Conflict prevention is the best form of dispute management. Conflicts in an organization brings a lot of negative challenges. Conflicts destroy employee and employer relations and employee-employee relations. They also demoralize employees if not well managed (Arbitration, 2017). Conflict resolution is an expensive venture in terms of time and money. Therefore, if disputes can be prevented from arising, the better it is. Communication is essential tool that can be used to prevent disputes from arising in an organization. Most disputes arise due to poor communication in the workplace. Effective communication motivates workers and it also enhances collaboration between different parties. Employees should always communicate any grievance that they have against the management or other employees before it turns into a conflict.

Interest Based Procedures in Alternative Dispute Resolution

Parties to a dispute should approach disputes on the basis of interests, power and rights. The should determine the grounds to which they will use to resolve their disputes. This basis should determine an effective way to resolve the disputes while preserving the various interests and relations of the parties (Lipsky, 2015). This should help determine who is right or wrong. Interests lay the foundations of the concerns that are at the heart of the dispute. They reveal the desires, concerns and fears that lay a foundation for people’s disputes. On the other hand, human needs are either non physical or physical elements necessary for human survival. Reconciling the interests of the disputants and thereby enacting solutions to the said problems.

Build in Loop-backs to negotiation

It should be done when it is clear who is going to win. Out of court settlement is a common feature of loop back procedure. It helps save crucial time and other resources. This type of procedure helps to solve dispute amicably and efficiently.

Provide low-cost rights and power backups

Voting, protests and arbitration are common elements of low-cost procedures. They offer better alternatives to rights and power battles. However, they are expensive in terms of costs than negotiation. They are less expensive as contrasted to military force.

Low-to-High Cost Sequence

Dispute resolution is a process and not an event. It follows specific steps. Disputes should generally be resolved at the lowest level. Ury, Brett, and Goldberg argues that by arranging a conflict from a low to high cost reduces its escalation. It also saves costs involved.

Provide the necessary motivation, skills, and resources

Motivation is an essential element to alternative dispute resolution. People should be motivated to go for alternative dispute resolution to solve their disputes. This is because human beings are creature of habit. This is the challenge to broad-based systemic change.

 

Reference

Lipsky, D. B. (2015). The future of conflict management systems. Conflict Resolution Quarterly, 33(S1), S27-S34.

Arbitration, C. M. P. A. (2017). Permanent Court of Arbitration. Permanent Court of Arbitration.

Nonet, P., Selznick, P., & Kagan, R. A. (2017). Law and society in transition: Toward responsive law. Routledge.