Alternative Dispute Resolution

Why is it that we, as Americans, defer so quickly to lawsuits when we have a dispute instead of trying to resolve our differences privately on our own? Today, litigation happens so frequently in the United States that it has almost become a way of life. It has certainly become a part of our culture and has created quite a demand for attorneys. But is this a good thing for our society and for business?

No business goes into a relationship expecting a legal dispute.  But neither does a skydiver jump out of an airplane expecting his parachute to fail. However, in both cases, the wise person will prepare for the worst in case it actually happens. Just like the wise skydiver carries a spare parachute, the wise business owner will include a provision in his contracts that outlines how the parties will resolve disputes, should they occur.

As an attorney, I would say that generally litigation is not a good solution for resolving disputes and should be considered a last resort. It’s expensive, time consuming, and it often can be argued that no one wins but the lawyers. For this reason, I recommend that disputes be resolved outside the courtroom as much as possible. This usually involves what is called “alternative dispute resolution” or “ADR.” Typically, ADR refers to either “mediation” or “arbitration.”

Mediation is a non-binding method that involves a mediator who brings both parties together to discuss ways to resolve their concerns. The idea is that a mediator who does not have a vested interest in the outcome can see things more clearly and with less bias, and as a result can recommend solutions that the disputing parties are unable to see. Mediation is far less expensive and time consuming than litigation and it can sometimes even salvage the relationship.

Arbitration is a more formal method of ADR that involves an arbitrator who hears both sides of the argument and then makes a decision as to how the dispute is to be resolved. The arbitrator’s decision is binding on both parties, similar to the ruling of a court in litigation, but is far less expensive and time consuming.

Both of these methods of ADR can be an effective alternative to litigation that benefits both parties, and it would be wise for businesses to consider including mediation or arbitration in their contracts as their method of dispute resolution.

Wade Hardie, JD, MBA
MINES Corporate Counsel

Company Drug Policies and Medical Marijuana

A hot topic in the news recently that has confused many people has been the issue of medical marijuana.  In the United States, federal law prohibits the consumption and distribution of marijuana, but many state laws (i.e. Colorado, California) say that distribution and consumption can be legal if it’s for medical purposes and if certain stipulations are followed.  For states that have legalized the use of medical marijuana, it raises two very important questions; is it legal to consume marijuana and can employers prohibit their employees from consuming it even if it’s for medical purposes?

Legal or Not?
There are two primary types of statutory laws in the United States, state and federal, both of which are enforceable.  A person who violates one but not the other can still be criminally prosecuted.  So given that fact, what happens if a person consumes marijuana legally under state law, but by doing so, violates federal law?  The answer is that he can still be prosecuted under federal law.  The caveat is that for the time being, the federal government is choosing not to prosecute legitimate medical marijuana users who reside in states that have legalized its use.  So although a medical marijuana user is violating federal law, he won’t likely be prosecuted if he resides in a state that has legalized its consumption.

Company Drug Policies
But what if an employer prohibits its employees from using all illegal drugs and that employer resides in a state that has legalized the use of medical marijuana?  Can that employer prohibit its employees from consuming medical marijuana?  The answer is…it depends.

Medical marijuana is still an illegal drug, even in states that have legalized its use because marijuana consumed for medical purposes still violates federal law.  Therefore, in all fifty states in the U.S., any company policy that prohibits the use of all illegal drugs will technically include marijuana regardless of whether it resides in a state that has legalized the use of medical marijuana.  However, whether or not an employer can prohibit its employees from using medical marijuana in a state that has legalized it depends on that state’s law.  For example, Colorado does not have any laws that prevent employers from terminating employees because they use medical marijuana.  But Arizona recently passed legislation that says an employer is not allowed to discriminate or terminate employees because they use medical marijuana (see http://www.natlawreview.com/article/arizona-employers-must-be-ready-new-medical-marijuana-use-law).

The bottom line is this is an evolving area of the law and there are still many unknowns and grey areas.  What is clear is that consumption of medical marijuana in the U.S. still violates federal law and employers may or may not have the ability to ban it’s consumption by their employees depending on their state law.  If you are an employer who resides in a state that allows the use of medical marijuana, it would be advisable to talk to an attorney before implementing any company policies that completely ban the use of marijuana to make sure you’re in compliance with your state law.

Wade Hardie, JD, MBA
MINES Corporate Counsel

Always Read the Fine Print!

I recently received a phone call from my cousin who had been in a car accident while driving a rental car. He was concerned because, although the accident was the other driver’s fault, the rental car company was requiring him to pay for the repairs.  One of the first questions he asked me was whether he had to pay for the damage.  My answer to him was “it depends on the contract you signed.” As it turned out, the rental contract contained a provision requiring the renter to ultimately be responsible for any damage to the car while it was in his possession.  So although the other driver (and his insurance company) would be required to pay for the damage, my cousin was responsible for ensuring the damage was repaired regardless of whether the other driver ended up paying or not.

With few exceptions, the laws in the United States are set up to support the rights of individuals to conduct business with one another and to negotiate the terms freely. These terms are typically spelled out in a written contract that is signed. Contracts are an objective way of articulating the understanding, expectations, and commitments of all parties involved in a transaction. For that reason, when a dispute between two parties goes to litigation, the court will generally focus on what is contained within the four corners of the contract. In other words, the terms of the contract determine the rules by which the parties are supposed to play, even if one of the parties chose to sign the agreement without reading it in its entirety. And if you think about it, that only makes sense.  If it were any other way, how could anyone depend on a written contract?

For these reasons, always, always, always read the fine print completely before you sign any contract, even if you think you know what it says. This is one lesson you don’t want to learn the hard way.

Wade Hardie, JD, MBA
MINES Corporate Counsel