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Is the White, Male World of Arbitration Ready for Diversity?

Aug. 13, 2021, 3:52 PM

Let me be perfectly frank: I probably wouldn’t have noticed the launch of Alterity ADR if its CEO Marcie Dickson didn’t offer me Bradley Gayton on a silver platter.

So let’s start with the news flash: Gayton, the former general counsel of The Coca-Cola Co., has emerged! I can report that I chatted with him and that he’s still his ebullient self (more on that conversation later). Since he abruptly (and mysteriously)left his GC perch at America’s iconic soft drink company in April after announcing ambitious diversity plans, he’s been incognito—as if he disappeared into a witness protection program. But now he’s talking about his role as chair of the advisory board of Alterity, which Dickson founded to increase diversity in the field of arbitration.

Oh, I know what you’re thinking: arbitration. Ho hum. I had the same reaction. But for Gayton’s involvement, I don’t think the subject would be on my radar screen. Fair or not, I think of arbitration as a staid field dominated by old, white men who are about to be put out to pasture.

That image is basically correct—and that’s precisely the problem. “ADR [alternative dispute resolution] is even more of a small, insular club than Big Law,” says Dickson. “And I want to open the club.”

According to the American Association for Justice,the stereotype that arbitrators are “pale, male, and stale” is depressingly on the money. Arbitrators at the nation’s two largest consumer and employment arbitration providers (American Arbitration Association and JAMS) are 88% White and 77% male. Moreover, at the Financial Industry Regulatory Authority (FINRA), which arbitrates brokerage disputes, 75% of its arbitrators are 60 or older, and 44% are 70 or older.

Yet, women and minorities are the ones most often subject to forced arbitration, according to the AAJ study The reason is that lower-paid workers are subject to arbitration more so than highly compensated ones. Fields with large female representations, such as education and health, have the highest rate of forced arbitration provisions.

And yes, the gender of the arbitrator makes a difference in outcome. AAJ finds that in “employment cases resolved by AAA between 2016 and 2020, the top 10 most frequently-used male arbitrators—all of whom are white—awarded monetary damages to employees in just 2.1% of cases,” while female arbitrators did so 3.4% of the time. Plus, female arbitrators “tended to award higher damages than their male counterparts.”

Simply put, it behooves us to pay more attention to arbitration. We should also be alarmed that arbitrators are such a homogeneous lot, considering that they’re deciding disputes like job discrimination, sexual harassment, and pay equity.

No question, the field needs a big infusion of diversity. But what are the chances that a company like Alterity can break into this cozy club?

Certainly, having a figure like Gayton, who gained media attention for aggressively championing diversity at Coca-Cola, helps. Gayton says his decades of legal experience convinced him it’s a vital issue. “It was clear that diversity in arbitration is lagging both in Big Law and in-house,” says Gatyon. “I was convinced of Marcie’s vision and the higher purpose she has about promoting a more equitable conflict resolution system. “

Alterity has also attracted other prominent lawyers to its stable. Among them are Leah Ward Sears, the first Black woman to serve as chief justice of a state supreme court (Georgia) in the United States; Linda Klein, former American Bar Association president; Carol Hunstein, former chief justice of Georgia’s Supreme Court; Richard Lorenzo, Hogan Lovells’ regional managing partner for the Americas; and Chaka Patterson, a partner at Alston & Bird and former general counsel at Adtalem.

Alterity CEO Marcie Dickson; Bradley Gayton, former Coca-Cola general counsel; Smith, Gambrell & Russell partner and former Georgia Supreme Court Chief Justice Leah Ward Sears; and Chaka Patterson, Alston & Bird partner and former Adtalem Global Education general counsel.
Jonathan Hurtarte / Bloomberg Law

Sears, now a partner at Smith, Gambrell & Russell in Atlanta, says she “strongly encouraged” Dickson to launch Alterity. She adds that companies claiming that there’s a dearth of diverse arbitrators will no longer have an excuse. “We will be right here, so you can’t say, ‘we can’t find any.’ ”

The formula for diversifying the world of arbitration isn’t rocket science, says Sears: “Instead of saying they’ll use women and people of color, they just have to do it. It’s very simple.”

Alston & Bird partner Patterson thinks Alterity’s timing is finally ripe. “The ADR world is where diversity has been ignored.” He notes that “in my 20 years of practice, I’ve only appeared before one African American neutral.” He adds, “People are hungry for organizations that will offer diversity of perspectives to the ADR process.”

While institutions might profess a strong desire for diverse arbitrators, AJA’s study finds that corporations tend to eliminate minority and female arbitrator candidates. So why should we assume that Alterity will be successful in pushing its diverse slate?

“That’s a good question,” admits Dickson. “It’s easier to go with the status quo.” She adds, however, that she now sees an opening in the closed system: “We’ve been talking to Fortune 500 companies that want more diversity in their arbitration matters.”

Sears says that deviating from the status quo is way overdue. “When I got out of the judiciary [in 2009], even though I had been chief justice of the Georgia Supreme Court, I had a hard time getting mediation work,” says Sears. “I’m African American and female, and I came to the conclusion that when companies choose arbitrators, they choose people like themselves.” Though she eventually got arbitration and mediation work, she adds, “it shouldn’t have taken eight to 10 years to get to this stage.”

If anyone should know how intractable corporations can be on diversity matters it should be Gayton. So what does he have to say about all this? “I don’t know if this will be easier to achieve [than other diversity efforts],” he says. “It’s a stubborn issue but what I find appealing is the challenge. Bringing more diversity to arbitration and conflict resolution will help democratize the process.” He also adds that “bringing more transparency to the process” would also give people “more confidence.”

Of course, what I really wanted to know was how Gayton feels about diversity initiatives after his aborted stint at Coca-Cola. On that score, Gayton was coy: “I prefer to stay focused today on Alterity,” he answered.

For her part, Dickson says “we’re fortunate to have Bradley on this team,” adding, “he truly believes in our mission of making dispute resolution more inclusive.”

Dickson says she feels that change is on the horizon. “I believe it’s not just a seasonal change or corporate speak. Companies want more creative problem solving that diversity will bring.”

That sounds right, let’s hope companies really believe it.

To contact the columnist: Vivia Chen in New York at vchen@bloombergindustry.com

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