Arbitration fans following the blogosphere — or participating in LinkedIn’s Commercial and Industry Arbitration and Mediation Group (here) — have no doubt heard about the $4.1 billion arbitration award recently confirmed by a California state court. Check out the coverage in Victoria Pynchon’s Settle It Now Negotiation Blog, here and here, and Victoria VanBuren’s Disputing blog, here. These posts feature a news article, related links and copies of the judgment and arbitration award. One of Victoria Pynchon’s posts includes a very amusing video clip from Cabaret, featuring Liza Minelli!
The award arose out of an employment dispute between Paul Chester, the former chief operating officer of iFreedom Communications, Inc., and iFreedom and its founder, Timothy Ringgenberg. Mr. Chester claimed, and JAMS arbitrator William F. McDonald, a retired judge, agreed, that iFreedom did not receive commissions, back wages and other benefits due him under his employment agreement, and that he was fired without cause after he confronted his employer about this. The compensatory component of the award is roughly $1 billion, which Arbitrator McDonald trebled based on iFreedom’s alleged bad faith. The award is quite lengthy (27 pages), and provides a detailed breakdown of the various claims and corresponding damages. The award states that the damages are ” appropriate to punish and make an example of defendants.” (Query whether “making an example of Defendants” is a proper subject of private arbitration. ) Continue Reading »
