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You believe that your franchisor has intentionally, with little or no justification, inflicted serious economic harm on you and other franchisees.

A group of franchisees has formed The Fight Association, and wants to hire the biggest baddest franchisee trial lawyer to punish the franchisor. The Fight Association's trial lawyer fires a couple of strongly worded missives to the franchisor, with the message: Capitulate or be Sued.

Some other franchise owners, horrified by the damage to the relationships, to the brand, and their ability to resell their own units, want some form of negotiation, discussion or mediation with the franchisor. Even in face of the clear economic damage inflicted by those working at the franchisor's corporation.

Should you fight or negotiate?

1. Fight your franchisor only when they have shown themselves to be an unreliable negotiating partner.

2. It is smart to start bargaining from outcomes that neither party can from either the litigation or arbitration process

3. The franchisee community as a whole needs to commit resources to continual training in interest based communication. If interest based negotiation is going succeed over the long haul, you need to commit funds to training.

Background- Managing Mental Traps

Robert Mnookin is the Director of Harvard's Program on Negotiation, and so it unsurprising that he frames the advice in his book as a way of managing two types of mental or intuitive traps, one set of traps which promotes fighting and the other which promotes cooperation.

(This is conceptually similar to one of the original themes from the Harvard Program on Negotiation: negotiation is the rational management of the inherent tension between claiming value and creating value, explored more throughly in The Manager as Negotiator, Lax and Sebenius.)

Mnookin identifies (6) mental traps in Chapter 1 of the book, and then goes on to evaluate (7) major confrontations in which one or both sides could reasonably see the other as the devil; someone who had intentionally inflicted serious harm with little or no justification. (Of particular interest to the franchise community is the chapter 8, "Disharmony in the Symphony".)

Here are Mnookin's traps, which shape the perceptions of the conflict

1. Tribalism involving an appeal to group identity, creating an in-group. It is us against them. Universalism is at the opposite end of the scale, the tendency to overlook important differences in culture, history and group identity. "Why it is just business, after all."

2. Demonization is the tendency to see the other party's action completely defined by being rotten or bad to the core. Contextual rationality is the impulse to find reasonable explanations for individual bad behavior.

3. Dehumanization is way of putting the other party outside normal moral concerns, treating them as a mere object. The other end of this spectrum is one of Redemption: everyone deserves a second chance.

4. Self-righteousness is the tendency to frame the problem in which you are blameless, but the other fellow is entirely to blame for this problem. The other extreme is to see parties always being Equally at Fault for a conflict.

5. Zero-sum trap in which my interests necessarily are in opposition to yours. At the other end is the view that there is always an Win/Win which makes both parties equally well off.

6. The Fight/Flight response, which for the franchisee community would be litigate or sell. At the other end of spectrum, we have Policy of Accommodation.

Finally, there is the call to battle in which the trial lawyer has to call out the franchisee troops for a battle with the franchisor in using the language of war, and the techniques of demonization, tribalism. and others.

The (3) Lessons: When to fight, How to Negotiate, and How to Follow Through.

(1) When to Fight - Only Fight as a Group with an Unreliable Business Partner.

In Chapter 5, Mnookin, relying upon recently declassified reports, examines Churchill's decision not to negotiate with Hitler. He does a remarkably good job of situating us in a world in which Hitler's manifest evil is not yet apparent and Churchill's War Cabinet is unmoved by Churchill's emotional appeals.

It is not known yet that Dunkirk will be a resounding success, that England will win the Battle of Britain, nor that Hitler will uncharacteristically hesitate for many months about deciding to cross the English channel.

A Britain that had insufficient resources to win a war on their own, seemingly without powerful allies, had to seriously consider whether a separate peace might be worth entering into.

Churchill was convinced that Germany was aiming at enslaving England, but his War Cabinet was more persuaded that Germany's goal was only more territory in Eastern Europe.

Since both England and Germany shared a hatred of Communism, it made sense to the War Cabinet that Germany would have to turn east and face down Russia.

What was critical, according to Mnookin, was that Churchill eventually framed the problem this way: if the negotiation was to fail, and this was likely given Hitler's total unsuitability as a bargaining partner, then British morale would be so undermined that they could not credibly commit a fight to the finish. The failed attempt at negotiations with Hitler would end in surrender.

This strikes me as correct. If the party you want to negotiate with has shown themselves to be utterly capricious, unable to be counted upon, then the very attempt at negotiation, should it fail, will undermine the group's commitment to prolonged litigation.

Fortunately, I don't believe that many franchise systems -although there are a few- have franchisors who have absolutely no credibility as a bargaining partner.

My own view, is that systemic challenges are not well suited to litigation, but the franchisor who owns little or no units will have always have trouble convincing the franchisee community to adopt systemic changes, when there has been a local history or either mistrust or bad decisions.

It will be hard for the franchisee community in these cases not to see the franchisor as acting intentionally to harm their own economic interests and misplaced litigation is the likely result.

(2) How to Negotiate out of Shadow of the Law

In 1983, after a bitter commercial fight, IBM and Fujitsu concluded an agreement over the extent to which Fujitsu could use, copy, or otherwise reverse engineer IBM's operating system. One year later, the agreement was in shambles - with each side reasonably convinced that the other had acted intentionally to inflict serious economic harm on the other with out justification. Devils!

For the next 10 years, Mnookin would play an important role both as arbitrator and mediator in both settling and assisting the parties to settle their dispute.

At one point, Mnookin and the other mediator, Jack Jones, had to convince each party of viability of IBM giving Fujitsu the right to inspect, in a very secure environment, IBM's source code. This was needed if Fujitsu was going to be able produce a compatible IBM OS, without infringing or copying on IBM's source code.

IBM could have rejected this deal by saying "Are you crazy, Fujitsu is a major competitor! The 1983 agreement doesn't give them the right to inspect our source code and they will never get that in arbitration. Screw them."

Fujitsu might have also rejected the deal because the restrictions placed on them by the secure environment were highly disruptive to their own programming practices.

But what both parties, even though intense rivals, came to see was that starting from a point which was not available through either litigation or arbitration produced an agreement superior to what any party could get through litigation or arbitration.

This is important advice: don't start bargaining from only those outcomes possible from litigation or arbitration. Both the franchisor and franchisee community need to focus on what would be the best outcome for all of them, and identify what steps need to be taken to get there - especially in the face of previous intractable conflict.

(3) Follow Through and Interest Based Negotiation Training

The last lesson is very important for the franchise community. In 1997, Mnookin was contacted after a bitter strike by San Francisco orchestra.

The orchestra's bargaining committee was itself bitterly divided, barely on speaking terms. Management's representative was seen as a destructive bully, intent on getting his own way.

"Moreover, the musician's relationships with one another were badly strained. They were traumatized. They had no authority structure, no strong leadership in collective bargaining."

Mnookin was able, in the short term, to introduce both sides to interest based negotiation, which involves both active listening and the management of creating value versus claiming value techniques. Both parties took part in the standard Harvard negotiation program, with some excellent short term results.

The parties spent, in 1998, six days in total to come to a new contract. However, they had spent almost 14 month in communication and in joint sessions prior to the bargaining at the table. "For complex negotiations, with critical conflicts behind the table, this is an appropriate ratio." says Mnookin.

However, 6 years later the symphony negotiating committee shunned additional training in interest based techniques, despite having new members who did not have these skills.

It's new attorney was suspicious of interest based negotiation and had argued in public that collective bargaining was essentially adversarial in nature and that the best deals could only be made when everyone was facing collective disaster.

Interestingly, the former management representative, Pastreich summarizes the value of interest based negotiation best:

"The greatest value of adversarial negotiation might be the opportunity it gives musicians to express anger and frustration accumulated during 3 years of doing a job that, by its very nature, allows them relatively little control over their working lives, while the greatest value of interest based bargaining might be the opportunity it gives musicians to work with managers and board members at solving problems in an atmosphere of teamwork and cooperation."

The parties did not make the necessary long term commitment to interest based negotiation, so reverted to the ordinary form of collective bargaining - a process which favours the ill prepared, but obstinate negotiator.


Franchise relations are not going to change overnight, but many franchisee associations, franchisors, and counsel can learn a great deal from Mnookin's book on negotiation.

Finally, the thoughtful exercises Mnookin prescribes in managing the (6) traps are worth reviewing to see which could be employed in your franchise system.

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The Fourth Circuit issued a bold new arbitration decision last week, sending a putative class of shuttle drivers to arbitration while expanding its application of SCOTUS' Concepcion decision beyond cases involving federal preemption of state arbitration law.  Muriithi v. Shuttle Express, Inc., __ F.3d __, 2013 WL 1287859 (4thCir. 2013).

Muriithi was a driver for an airport shuttle service who signed a franchise agreement containing an arbitration clause.  The franchise agreement required arbitration of "any controversy arising out of this Agreement," required that arbitration proceed "on an individual basis only," and required each party to bear half the "fees and costs of the arbitrator." 

Muriithi later brought employment claims as a representative of a putative class of drivers, arguing they should have been treated as employees entitled to minimum wage and overtime pay instead of labeled as franchisees.

Shuttle Express moved to compel arbitration.  The district court denied the motion, finding the arbitration clause was unconscionable, because plaintiffs could not effectively vindicate their statutory rights due to the class action waiver and fee-splitting provision (and a one year statute of limitation).

The Fourth Circuit reversed the district court, and ordered it to compel arbitration of the drivers' claims.  The Fourth Circuit could have accomplished that in a fairly simple fashion - by finding that Muriithi did not meet his burden to prove the costs of arbitration would be prohibitive (under the same line of decisions at issue in the AmEx case currently pending before SCOTUS) because he did not present evidence about relevant arbitration fees or the value of his employment claims.  [It could not have hurt that Shuttle Express volunteered during oral argument to pay all arbitration costs if the court compelled arbitration.]

Instead, the Fourth Circuit did that, and then also went out of its way to discuss arguments about whether Concepcion had any application to the case.  The driver argued it did not, because he was not arguing for the application of any state common law that precludes class action waivers in arbitration. 

The court disagreed, finding Concepcion applies to any unconscionability argument directed to waivers of class arbitration.  "[T]he Supreme Court's holding was not merely an assertion of federal preemption, but also plainly prohibited application of the general contract defense of unconscionability to invalidate an otherwise valid arbitration agreement under these circumstances."

That is a bold statement from the Fourth Circuit, not only because the question presented and ultimate holding inConcepcion were both specific to federal preemption, but also because it adopts the position of the Petitioner in the AmExcase, before SCOTUS has even issued a ruling.

In Awuah, et al. v. Coverall North America, Inc., No. 12-1301 (1st Cir. Dec. 27, 2012), the First Circuit reversed a district court's ruling and ordered arbitration of workplace disputes for certain franchisees even though they had not signed, received, or reviewed an arbitration agreement. The First Circuit found that the district court had erroneously adopted a special heightened notice requirement for arbitration clauses that does not exist and, even if Massachusetts law had imposed such a notice requirement, the FAA would preempt it. Id. at 4. The decision is important for employers in the context of workplace arbitration agreements.

The Facts Of The Case

Coverall North America, Inc. ("Coverall") contracts to provide commercial janitorial cleaning services to building owners or operators, and its "franchisees" do the cleaning. In their complaint, the franchisees asserted a variety of state law claims against Coverall including breach of contract, misrepresentation, deceptive and unfair business practices, misclassification as independent contractors, and failure to pay the wages due to them. Many (but not all) of the franchisees signed Franchise Agreements with Coverall providing that, with certain exceptions not implicated here, "all controversies, disputes or claims between Coverall . . . and Franchisee . . . shall be submitted promptly for arbitration." Id. The district court readily enforced the arbitration agreements in those instances where a franchisee signed a Franchise Agreement containing an arbitration clause. Id. at 7. 

However, the Franchise Agreements also permitted franchisees to assign the Agreement to a person ('the assignee') meeting the qualifications established by Coverall for granting new franchises. Thirty-one  of the franchisees, including the sixteen appellees, did not enter into the Franchise Agreement with Coverall but rather became Coverall franchisees either by signing Consent to Transfer Agreements ("Transfer Agreements") and Guaranties to Coverall Janitorial Franchise Agreements ("Guaranties"), or by signing only the latter Guaranties. Id. at 3-6. The sixteen appellees at issue in the appeal never even received a copy of the Franchise Agreement, but did execute the Transfer Agreements and/or the Guaranties, both of which incorporated the Franchise Agreement by reference.

The Underlying District Court Ruling

On September 22, 2011, the district court refused to enforce the arbitration agreement for certain of the franchisees and certified a class consisting of "all individuals who have owned a Coverall franchise and performed work for Coverall customers in Massachusetts at any time since February 15, 2004, who have not signed an arbitration agreement or had their claims previously adjudicated." Id. at *7 (emphasis added) (citing Awuah II, 843 F. Supp. 2d at 174). On November 29, 2011, plaintiffs filed a motion for a ruling on the scope of the class, arguing that "those who purchased their Coverall franchises through certain 'Consent to Transfer' agreements[ ] that do not contain arbitration clauses" should be added to the class. Id. The district court found that some of the transferee plaintiffs had received copies of the Franchise Agreement and therefore had notice of the arbitration clause. Id. at 8. Thus, the district court's resolution of whether or not to order franchisees to arbitrate was based on whether they had received copies of the Franchise Agreement containing the arbitration clause.

With respect to the sixteen franchisees who had not received copies of the Franchise Agreement, the district court concluded that "Coverall did not give the Transferees information sufficient to put a reasonably prudent employee on adequate notice of the agreement to arbitrate." Id. at 9. Thus, the district court "expanded the class to include these new plaintiffs who had not been given copies of the Franchise Agreement, [although it was] referred to in the documents they did receive." Id. The district court also held that a franchisee could not be bound to an arbitration clause if he does not have notice of it," and that "Coverall . . . has not produced any evidence that the transferees were ever themselves shown the transferors' franchise agreements or that they were in any other way informed about the existence of an arbitration clause." Id. at 8. Coverall argued that "[p]laintiffs' assertion that some specific level of notice is required before the Transferee-Owners may be bound by their agreements to arbitrate is contrary to settled law." Id.

The First Circuit's Decision

On appeal, the First Circuit agreed with Coverall, holding that while the Transfer Agreements did not all use the traditional language of "incorporating by reference" the arbitration clause of the Franchise Agreement, no such magic terms are required and other language in the agreements clearly communicated the purpose of incorporating the arbitration clause. Id. at 13. These agreements provided that the transferees "succeed to all of Franchisee's rights and obligations under Franchisee's Janitorial Franchise Agreement," or "become liable with the Franchisee for all of the obligations imposed by the Janitorial Franchise Agreement." Id. (internal quotation marks omitted). Moreover, the First Circuit held that the Transfer Agreements were not the only pertinent documents executed by the parties and other Transfer Agreements incorporated the responsibilities, duties, and obligations with respect to arbitration.

Implications For Employers

This case is an interesting one for employers because while it is always preferable to have an employee execute the arbitration agreement itself, this ruling implies that an employer may enforce an arbitration agreement where the employer has incorporated it by reference into another document it has provided to the employee.

With less colorful language than its last arbitration opinion, the First Circuit sided with the Second and Third Circuits in limiting the application of the 2010 Stolt-Nielsen decision on the availability of class arbitration. Fantastic Sams Franchise Corp. v. FSRO Assoc. Ltd., __ F.3d __, 2012 WL 2402560 (1st Cir. June 27, 2012).

Decisions from these three circuits suggest that as long as the party seeking a class action can show it did not stipulate that the agreement was "silent" on the availability of class arbitration, the courts (or the arbitrator) will consider arguments based on contractual interpretation and the parties' actions to find the parties' intent.

In Fantastic Sams, a coalition of 35 franchisees demanded arbitration against the franchisor for common violations of their agreements and statutes. Twenty five of the agreements had arbitration clauses that prohibited class arbitration. Ten agreements did not expressly prohibit class arbitration, and broadly provided for arbitration of "any controversy or claim arising out of or relating in any way to this Agreement." The franchisor brought a petition in federal court to compel the coalition members to arbitrate individually, relying on Stolt-Nielsen.

The 25 franchisees whose contracts prohibited class arbitration were compelled to arbitrate individually. But the remaining ten were not. The First Circuit concluded that Stolt-Nielsen was not as broad as the franchisor argued: "We thus reject the very different precept, on which [the franchisor's] argument depends, that there must be express contractual language evincing the parties' intent to permit class or collective arbitration.

Stolt-Nielsen imposes no such constraint on arbitration agreements." The court focused on the fact that the Stolt-Nielsen parties had stipulated that their agreement was "silent" on class arbitration, whereas in this case it was possible the arbitrator could find evidence that the parties did intend to allow class or collective arbitrations. The First Circuit noted its agreement with the Second and Third Circuit decisions on this point, but did not address the recent Fifth Circuit decision coming out in favor of the franchisor's argument.

Furthermore, the First Circuit noted that Stolt-Nielsen did not clearly apply because this coalition of franchisees was not a "class action" and did not have the same issues that SCOTUS noted with class arbitrations. (No absent parties, no certifying a class or providing public notice, etc.)

Finally, the court found that the question of whether the remaining ten franchisees could proceed in a collective arbitration was a decision for the arbitrator, because it characterized that question as a "procedural" one and because the agreements incorporated the AAA Rules, which delegate jurisdictional questions to the arbitrator.

At least one lesson from these cases is: never stipulate your arbitration agreement is silent regarding the availability of class actions! Give the courts some reason to distinguish your facts from the unusual facts in Stolt-Nielsen, if you want any chance of arbitrating as a class.

That is how one noted lawyer described what would happen if HR and Risk Management people could hear courthouse conversations amongst plaintiff lawyers. Unless your company is bankrupt or has never in its history had a disgruntled employee, you likely will, sooner or later, be in the crosshairs of a plaintiff’s attorney looking for an easy mark in an employment base. And then, if the action that is eventually brought turns out to be a class action, you can multiply that risk by a factor of hundreds or even thousands, as Wal-Mart and others have learned.


Unfortunately, our legal system is based on an adversarial model. Like a sports team preparing for a critical game, from the first day of law school, lawyers are trained to advocate totally for their client’s victory. Defenses are concocted to minimize the impact of any weakness in their side’s case. The opposing side is attacked and demeaned at every opportunity. The bedrock principal underlying the adversarial means of dispute resolution is that if both parties were to advocate totally their respective claims of their clients, the most just resolution of the dispute would obtain. Of course, this is a fiction.


Applying our traditional legal adversarial system to workplace disputes, however, is rarely the best means of dispute resolution. The adversarial system is expensive, disruptive, and protracted. More significantly, by its very nature, it tends to drive the parties further apart weakening their relationship, often irreparably. Far too often the process completely ignores the real underlying problem. As a result, by the very nature of the adversarial process, the minor disagreements and the stress inherent in the employment relationship escalate into a full-scale war, typically resulting in the termination of the employment relationship, years of litigation, tens of thousands of dollars in legal expenses, and only the lawyers profit.


In the recent past, several external factors have combined to result in a marked increase in both the frequency and intensity of litigation between employer and employee. These include:


  • Enactment of legislation providing employees with additional workplace rights.
  • The erosion of the traditional employment-at-will rule that, for most of our industrial history, precluded employees from suing their employers.
  • Recognition of new legal theories permitting employees to sue their employers and supervisors.
  • The continuing diversification of the American workplace with respect to the attributes of its workers, their lifestyle choices, and their core beliefs.
  • Increase use of jury trials in employment litigation.
  • Larger demand awards.
  • Class action cases.


When these factors are combined with the systemic escalation of disputes resulting from our legal system’s use of an adversarial system of dispute resolution, the contemporary employer is charged with an impossible task: to successfully manage its human resources in an increasingly competitive environment, while keeping legal claims from arising and, when they do, responding to them with minimal cost and disruption


A Solution – ADR


Alternate dispute resolution (ADR) is simply use of a means to resolve disputes other than the traditional court and administrative forums. A nebulous and ever-expanding concept, ADR encompasses a broad spectrum of activities ranging from a simple open door policy through binding arbitration of statutory claims. Intermediate ADR possibilities include an internal grievance procedure, ombudsman, executive and peer review, and mediation.


A carefully structured ADR policy would typically use different types of ADR at different stages of the dispute. For example, an ADR policy may have the following progressive steps: an employee may first be required to informally discuss a concern with a supervisor, then file a written grievance with higher management, submit the dispute to mediation and, if necessary, then finally proceed to final binding arbitration.


Where ADR is effective and resolves the dispute, it is far less costly and time-consuming than court litigation. More importantly, a carefully instituted and well-planned ADR mechanism becomes a very effective risk management/loss control tool. Because mediation focuses the parties to concentrate both on the other side’s perspective as well as their own, and to structure their own mutually agreeable resolution to their dispute, it is usually far more effective in employment settings than litigation. This is because litigation imposes a third party’s findings as to the relative claims of the dispute upon the parties. As often as not, the result is an appeal or initiation of a scheme to secure revenge. The parties to a mediated settlement, in contrast, have invested time and effort into reaching their mutually accepted resolution to the dispute. They are, therefore, by the very nature of the process, committed to its success. Finally, a skillful mediator can assist each disputant with appreciating the concerns and positions of the other party. This reduces the tension between them, enhances empathy, and can lead to innovative solutions.


Basically, the well-crafted ADR program will require non-binding mediation before mandatory binding arbitration. A well-crafted ADR program should cover all claims of an employee except workers’ compensation and unemployment compensation. That includes wage-and-hour claims as well and this can be particularly important in a prospective wage-and-hour class or collective action.


The ADR program must be balanced. An employer will not be able to shift the balance in its favor by use of an ADR procedure that is unfair to employees and does not preserve all legal rights and remedies of an employee, and preserve due process. Courts would have little trouble invalidating any program which purports to limit the statutory remedy of an employee, including any remedies for punitive damages, legal fees, or any other remedy under which the claim brought would allow. Courts will not validate an ADR program which artificially limits the statute of limitations, allows the employer to unilaterally change the arbitration rules, or allows the employer to choose the arbitrator.


There are significant risk management advantages to a well-crafted ADR program.  Those advantages include reduction in cost as compared to conventional litigation, both in terms of legal fees and expenses, and time required by the employer and its managers involved in protracted judicial litigation. Arbitration proceedings are non-public which means that publicly sensitive businesses would not have their dirty laundry aired in public. One significant advantage is the certainty that management and employees have in the process. Everyone understands what the rules are and manage their expectations accordingly. This result can improve employee relations and reduce turnover. Another important factor is that when an arbitration ruling is made the award will be final and binding on the parties. This allows the parties to achieve finality and can get on with their lives. One of the most important aspects of a carefully crafted ADR program is the prospect of eliminating or significantly reducing class or collective actions. Also, exposure to frivolous lawsuit will be significantly curtailed. Implementation of an ADR program requires some careful planning but when executed properly can be relatively painless process to the organization irrespective of its size.


ADR is the dispute resolution risk management mechanism of the future. For workplace disputes, it is far superior to conventional litigation. It offers employers a far less expensive, less risky, quicker, and potentially more effective means of dispute resolution than does traditional litigation. It can improve organizational health by identifying and addressing the root cause of employment disputes and structuring creative resolution.


As with all policies and core values, the particular form of ADR an organization elects to employ, as well as the policies implementing it, should be carefully structured to enhance your particular operations, your employee relations philosophy, your core values, and your past experience in adjudicating employment disputes. The variety and flexibility of ADR enhances its potential for effectiveness. 

Michael Millerick, correctly in my opinion, notes that the passage of the Fair Arbitration Act which bans mandatory arbitration in franchise agreements is more likely to pass because of the Supreme Court (US) decision in Rent-Center v Jackson, which allowed the arbitrator to take jurisdiction over the question whether there was an agreement to arbitrate or not.

"Two significant events have, and are occurring, which will change the entire landscape concerning how franchise disputes are going to be resolved. 

Over one half of existing franchise agreements include arbitration clauses which require franchisees and franchisors to resolve most of their disputes where the franchisor's place of business is located and before professional arbitrators who presumably have experience dealing with the same types of issues on repeated occasions. 
Some find this comforting and cost effective while others think it unfairly favors franchisors. 
Reacting to the "consumer" oriented nature of the franchisees' complaints - usually prompted by those who have lost their disputes in arbitration - the U.S. Legislature now has before it two pending bills which will invalidate all arbitration clauses in existing and future franchise agreements as a matter of law. A recent event has made the passage of these bills even more likely."
In New Brunswick, the passage of the Mediation Regulation, under the New Brunswick  Franchise Act, which comes into force on February, 2011, now provides for a type of mandatory mediation for franchise disputes.
One party can ask for mediation, and the other party has 7 days to decline the request and provide written reasons for doing so, section 4 of the Mediation Regulation.
Although the regulation does not specify the cost consequences for declining mediation should the dispute become a legal procedure, I can imagine a Judge being interested in substantive reasons for declining mediation.  
If you are a franchise mediator, it might be a good time to hang out your shingle in New Brunswick.
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The case, Rent-a-Center Inc. v. Jackson, is an important one to consumer advocates, who assert that judges should be empowered to make the threshold determination about whether an arbitration agreement is "unconscionable."

Arbitrators, critics say, routinely side with business defendants. But proponents say that arbitration is a fair, efficient, and relatively inexpensive way to resolve disputes. 

The plaintiff in the case, Rent-a-Center  employee Antonio Jackson, claimed that the binding arbitration agreement he signed when he started work was unconscionable, because he had no alternative but to sign it if he wanted the job. 

Writing for the majority, Justice Scalia reasoned that Jackson had consented to have disputes settled by arbitration, and it made "no difference" that the dispute at issue happened to be about the enforceability of the arbitration agreement itself. 

Four conservatives, Roberts, Kennedy, Thomas and Alito, joined the opinion. 

Dissenting Justice Stevens wrote that the result made no sense. If the arbitration agreement is "so one-sided and the process of its making so unfair" then it was unreasonable to assume Jackson truly assented to put that very question to the arbitrator.

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