Anatomy of an Arbitration Disaster
The National Law Journal
June 17, 2009
A Los Angeles Superior Court judge on May 28 affirmed an arbitration award of more than $4.1 billion, sending shock waves through the labor and employment bar in California.
The award went to Paul Thomas Chester, a former executive at iFreedom Communications Inc., who brought a wrongful termination suit against his former employer, its affiliated businesses and the founder, Timothy Ringgenberg.
The case ended up before an arbitrator, William F. McDonald, a retired supervising judge of the Orange County, Calif., Superior Court’s complex civil litigation panel, who now works at JAMS.
Michael D. Young, a partner in the Los Angeles office of Atlanta’s Alston & Bird, wrote about the award on his firm’s labor and employment blog, “Who’s the Boss?” Young spoke to The National Law Journal about the lessons that employment lawyers and their clients could learn from the outcome in this case regarding arbitration agreements and the arbitration process.
Young also broke down the award, to explain how the arbitrator came up with such an astronomically high number.