Confidential & Proprietary

ACTIVE RESOLVE (AND RESOLVE ARBITRATION) PROCESS RULES (revised January 2018)

1. Agree Whether to Be Bound. The parties agree to submit their dispute for definition, investigation and non-adversarial resolution to Just Resolve, LLC (“Just Resolve”) in the manner described in these Terms of Service and Rules (“Rules”) and on any additional reasonable terms as the parties agree in writing, or which Just Resolve may adopt.  The outcome will be binding on the parties, with the final decision enforceable in court, unless they have previously agreed in writing to a non-binding advisory-only process which typically will conclude upon issuance of the Arbiter’s tentative decision.[1]  Whether the outcome is binding or advisory, the process may be referred to as a “Resolve” or “Resolve arbitration,” and the parties must in good faith engage in and complete it before commencing any legal action in court on subjects within the scope of their agreement.  The parties further agree that Just Resolve has jurisdiction over the entirety of the dispute.

2. Cooperate Fully. Each party must cooperate promptly and fully with every lawful request or direction from Just Resolve and, once selected, the Neutral Arbiter(s) (“Arbiter”).[2] If a party fails to cooperate, the Resolve may proceed and the Arbiter(s) may complete the investigation and render a tentative or final decision or award on the assumption that any information lost, withheld, delayed or destroyed was unfavorable to the uncooperative party.

3. Select Arbiter(s) and Experts. After conferring with the parties, Just Resolve will recommend one or more candidates for Arbiter(s) and any needed subject matter experts (“Experts”).  All candidates must be persons who have never been employed by either party, are qualified by experience or education to decide or help decide the dispute, and do not have a direct or indirect interest in either party or the subject matter of the dispute.  If the parties cannot agree on a selection, Just Resolve will submit a list of at least 3 qualified candidates for that role, from which each party may reject only one.  The parties must then accept Just Resolve’s choice of one of the remaining candidates submitted, unless good reason is given in advance to believe a candidate so chosen cannot be fair and objective.[3]

4. Designate Your Resolve Manager. At the beginning of the Resolve, each party designates in writing a Resolve Manager.  If no one is so designated, the highest executive officer or manager of the party serves by default.  The Resolve Manager has both responsibility and authority to communicate with Just Resolve and the Arbiter(s) on behalf of the party, including to obtain and disclose requested information, arrange witness cooperation, and make binding decisions for the party pertaining to the Resolve.  The Resolve Manager must be reasonably available during normal business hours.  Either party may replace its Resolve Manager by notifying Just Resolve in writing.

5. Follow the Schedule. The parties must follow the schedule and process set by Just Resolve and the Arbiter(s).  Unless otherwise agreed, the process is that described in Attachment 1   The parties will be consulted about the schedule before it is set.  Thereafter, each party must make best efforts to meet all deadlines.  The Arbiter(s) may find any continuing or repeated failure by a party to meet deadline(s) to be a material breach of the duty to cooperate and subject to the consequences of noncooperation described in Rule 2 and/or the “Other Disputes” process of Rule 23. Just Resolve, the Arbiter(s), or the parties by agreement, may extend deadlines as fairness or circumstances warrant.

6. Share Materials and Testimony. Unless specifically identified by the disclosing party as highly sensitive and confidential, and agreed to be such by the Arbiter, all materials and any recorded testimony submitted by any party to Just Resolve or to the Arbiter(s) shall be provided to the other party(ies).

7. Mediate If Agreed. If the parties have agreed to mediate their disagreement, the Arbiter(s) will choose the manner and timing and will conduct the mediation before preparing any tentative decision.

8. Choose Whether to Appeal. In a binding Resolve, within seven (7) days after the final decision, either party may give written notice of intent to appeal.  The appealing party alone will pay Just Resolve for the appeal, in an additional amount set by Just Resolve not to exceed 100% of total fees paid by all parties for this Resolve.  Two additional Arbiters – again selected according to Rule 3 – will review the case and may, by majority vote among all Arbiters, choose to investigate further and/or change the final decision.  A final decision so changed replaces the original final decision for all purposes.   If the original final decision required the appealing party to make a payment, then the full amount of that payment must be placed in escrow with Just Resolve at the start of the appeal, and will be released according to the final binding decision following appeal.  Just Resolve will give reasonable notice of when fees for appeal are due.  Just Resolve, in its sole discretion, may declare an appeal abandoned if any such fee or payment is not timely posted.

9. Pay on Time for Service. Unless otherwise provided in these Rules or agreed in writing with Just Resolve, the parties pay Just Resolve in equal shares for its resolution services, including quoted Arbiter and expert fees, and out-of-pocket expenses (e.g. on-line research, any video-taped interviews, copying, mileage, etc.).  Except where impractical or otherwise agreed, Just Resolve will quote a fixed, “not-to-exceed,” or estimated fees and expenses total at the outset of services, and the parties will each pay 50% of their respective total shares in advance as retention against final invoice.  The remaining 50% will be due before the Tentative Decision is released by the Arbiter(s).  If the parties agree to add a mediation step or other work after Just Resolve has quoted or set its fees, then they may be required to pay additional fees for the additional services.  In any matter exceeding two weeks in duration, Just Resolve may issue progress invoices due within two weeks.  Fees incurred on an estimated or hourly basis are subject to later revision and reconciliation at the conclusion of the Resolve.[4]  Unless otherwise agreed by Just Resolve and the Arbiter, where they and the parties have agreed to a fixed fee and the case is resolved prior to a final decision, the parties shall pay the full fee.

10. Changes in a Resolve. If, during the course of the resolve, Just Resolve or the Arbiter(s) determines the contracted price does not sufficiently cover the Arbiter’s costs due to mistaken estimation of the amount of time needed, an unanticipated need to hire an expert or conduct unforeseen legal research, a later-added mediation step, or any other change costing less than 20% of the originally quoted price per party, Just Resolve may set, and each party will promptly pay, its share of the increased cost If the change requires an increase in cost greater than 20% of the original quoted price per party, Just Resolve will submit a revised price quote requesting each party’s written approval.  If either party fails to approve, Just Resolve and the Arbiter may choose to proceed with the Resolve for the original quoted price without benefit of the additional hours, expertise or other expense.

IMPORTANT PRACTICAL AND LEGAL RULES

11. Contacts with Arbiter(s). Direct contact by a party with Just Resolve, the Arbiter(s), or any other member of Just Resolve’s resolution team for the purpose of meeting obligations under this Agreement or to communicate points of view about the dispute are both expected and proper, and each party is free to rely on whomever it wants to speak for it.  However, the resolution team is directed to recognize and compensate in its efforts if it appears that one party may gain unfair advantage by relying on a party-aligned attorney, expert or other dispute resolution professional.  Also, before the final decision, no party or representative will engage in any inappropriate contact with any member of the resolution team.  Inappropriate contact includes private advice or communication about possible future business or social relations – and any other contact –,that might seek unfair advantage or create the appearance of seeking unfair advantage in connection with the resolution of the dispute.

12. A party to a Resolve need not be, but has the right to be, represented by an attorney or other representative at any proceeding or hearing.  An attorney also may serve as a party’s advisor and/or Resolve Manager.

13. Legal Research. The parties agree that Just Resolve may have a paralegal or other legal professional not having a conflict of interest conduct independent legal research for and at the request of the Arbiter.

14. Arbiter(s) Role and Practical Judgments. Just Resolve, including the selected Arbiter(s) and any Expert, do not represent any party, but rather will have the role and objective to neutrally and in good faith seek factual truth and to fairly apply pertinent general principles of substantive law and equity in order to resolve the disagreement within a reasonable time and cost given limited financial stakes.  This may sometimes require practical and common sense judgments, including about what facts to investigate and what conclusions to reach based on imperfect information.[5]

15. No Professional or Consequential Liability. In light of Just Resolve’s role and limitations described above, and to the extent permitted by law, the parties each waive and forever release, in advance, any and all potential legal claims and demands against Just Resolve, its Arbiter(s), its Experts and any other members of the resolution team (jointly “Just Resolve”) for any potential misconduct arising in connection with these Rules or this Resolve, other than failure to act honestly and in good faith.  The waived and released claims include claims for professional malpractice or negligence, breach of fiduciary duty, conflict of interest, breach of contract, libel or slander in the course of communicating theories, demands or assertions of one party regarding the other during the Resolve, and their like.  Just Resolve and the parties also waive and forever release, in advance, any potential claims against each other for lost profits and consequential damages arising out of the Resolve process, except as specifically provided for in these Rules.  In order to make these waivers and releases as effective as possible, the parties each waive the benefit of California Civil Code Section 1542 (and any comparable law in other jurisdictions) which provides that:
    1. A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

16. Confidentiality in a Resolve. The parties agree that the Resolve process is confidential. All statements made during the course of the Resolve are made without prejudice to any party’s legal position and are inadmissible for any purpose in any legal proceeding. Unless otherwise agreed in writing, the parties and Just Resolve:
    1. Will not disclose offers, promises, conduct and statements to third parties, and
    2. Agree that offers, promises, conduct and statements are privileged and inadmissible for any purposes, including impeachment, under Rule 408 of the Federal Rules of Evidence and any applicable federal or state statute, rule or common law provisions.

17. Parties May Jointly Terminate Services. Subject to the provisions of paragraph 9 regarding payment for services, if at any time the disputing parties agree in writing, they may by notice terminate Just Resolve’s services and owe only those fees for work and out-of-pocket expenses incurred or committed to date.  If the parties are owed reimbursement of any fees already paid, Just Resolve will reimburse within 30 days.

18. Just Resolve May Terminate. If at any time Just Resolve decides in good faith that an unexpected obstacle (for example, the unanticipated involvement or lack of cooperation of a third party, or unexpected burdens to address employee or proprietary rights) impairs its ability to resolve the dispute as agreed, Just Resolve may terminate the Resolve without liability or penalty other than that it will reimburse the parties for any fees paid it to date, except for reimbursement to a party who previously knew and failed to disclose the material facts creating the obstacle.

19. Breach By Party. If a party breaks these Rules, including failure to pay Just Resolve’s fees when due, then Just Resolve may, in its sole discretion, suspend any remaining work pending cure and/or it may exercise its other available rights under these Rules or at law.

20. Satisfaction and Enforcement of Final Decision. In a binding Resolve, after receiving the final decision and explanation, an indebted party has 30 days to fully comply (including payment of any other award made by the Arbiter), or else the decision will be enforceable in any court of competent jurisdiction.  If the court substantially enforces the decision, the prevailing party is entitled to a further judicial award against the indebted party in the amounts of the prevailing party’s actual attorneys’ fees and costs of enforcement, and its share of fees and expenses paid to Just Resolve in connection with this Resolve.

21. Resolve and Final Decision in the Absence of a Party. Unless otherwise provided by law or contract, if a party fails or refuses to appear or participate cooperatively in the Resolve, or in any portion of the Resolve, (e.g., by ignoring a demand to resolve, failing to participate in good faith in Arbiter(s) selection, failing to pay its share of Resolve fees, or failing to cooperate with Arbiter requests) after having been given notice and opportunity, the Resolve may proceed and the Arbiter(s) may render a final decision on the basis of such evidence and information presented by the participating party as the Arbiter(s) may require for the rendering of a decision and which, if true, would support such decision. A binding final decision rendered under such circumstances is valid and enforceable as if all parties had participated fully.

22. Payment of Fees By One Party Per Agreement or in the Absence of Other Party. If one party pays the other’s share of fees and costs for Just Resolve’s services per agreement, statute or the other’s failure to appear or cooperate, and a final decision is rendered in favor of the paying party, then that final decision or award may, upon request and if not prevented by law or agreement, include reimbursement of those fees and costs by the non-paying party.  In addition, the Arbiter(s) may award against any party any costs or fees that are a proper part of any award with respect to the Resolve.

23. Other Disputes Among Parties or with Just Resolve. If a dispute arises between the parties about the terms or performance of this Resolve or the underlying agreement to use Just Resolve (excluding judicial enforcement under Rule 20), the parties agree to submit the dispute to the Arbiter(s) for a binding decision that may include an award of fees and costs of such process.  The Arbiter(s) will choose the process, schedule, amount and allocation of any additional fee required.  Any other dispute arising out of the performance of this resolve or the underlying agreement to use Just Resolve (excluding judicial enforcement under Rule 20), including a dispute between Just Resolve and one or more of the parties, will first be presented for informal mediation to the Arbiter(s).  The Arbiter(s) will choose the process, schedule, amount and allocation to each party and/or Just Resolve of any additional fees required.  If the dispute is not settled, any legal action on it will be brought in San Jose, California, and the prevailing party will be entitled to recover its attorneys’ fees and costs.

24. Legal Actions. Except as may be reasonably necessary to establish the facts and scope of Just Resolve’s role and services to the disputing parties and/or the content and enforceability of any binding final decision issued, in any later legal action between or among those parties, (1) Just Resolve will take the position that communications and information that the parties shared with Just Resolve and the Arbiter(s) are not discoverable or admissible, but rather were in the nature of confidential and privileged settlement communications, (2) each party agrees to make no attempt to compel the Arbiter(s) or any Just Resolve employee’s or contractor’s testimony or production of documents originally provided by the other party, and (3) the parties agree that neither the Arbiter(s) nor Just Resolve is a necessary party in any arbitral or judicial proceeding relating to the Resolve or to the subject matter of the Resolve.  The parties also agree to defend the Arbiter(s) from any subpoenas from outside parties arising out of this Resolve.

25. All notices will be in writing and comply with any agreement between or among the parties and/or Just Resolve, or applicable law.  Absent agreement or law to the contrary, notices received before 5:00 p.m. during normal business hours are effective that day.  Later notices are effective the next business day.

26. When formal service of process of a demand, notice or other document is required by law or agreement, service must comply with that law or agreement.  Except as so required, service under these rules is accomplished by providing one copy of the document to each other party and one copy to Just Resolve on behalf of the agreed or future Arbiter(s). Service may be made by hand-delivery, overnight delivery service, clearly identified email or facsimile, or U.S. mail. Service by any of these means is considered effective when the document is transmitted or deposited, except that when the method of service is by U.S. Mail only, three (3) business days shall be added to any prescribed period for response or compliance.

ATTACHMENT 1:  ACTIVE RESOLVE PROCESS FLOW

[1]  If and to the extent allowed by law, this process and final decision shall be treated as an arbitration and award, respectively, for purposes of enforcement in court, and, when employed by the parties pursuant to a pre-dispute or other written agreement to “arbitrate,” the process will be conducted in compliance with applicable law governing arbitrations, with the Arbiter(s) functioning as arbitrator(s).

[2]  If access to trade secret or other confidential information is requested, Just Resolve will cooperate with that Party to protect the confidentiality of the information.

[3]  If, before completing his or her assignment, an Arbiter or expert previously accepted by the parties becomes disabled, resigns for any reason, or is dismissed by Just Resolve, the parties and Just Resolve will replace that resolution team member as soon as possible in the same manner provided for initial selection, and will reasonably adjust the schedule accordingly.

[4]  For smaller disputes of reasonably predictable effort, the parties may agree on a fixed or “not-to-exceed” fee with the understanding that the Arbiter may limit investigative and analytical resources to a level commensurate with the stakes.

[5]  For example, in assessing the quality, weight and credibility of information obtained during the investigation, the Arbiter(s) may be guided, but is not bound, by formal rules of evidence.