APPENDIX D

Sample Mediation and Arbitration Clause

SAMPLE ARBITRATION AND MEDIATION CONTRACT CLAUSE

ARBITRATION RULES AND PROCEDURES

Article 1. Individuals Covered

This contract applies, as of the Effective Date provided in Article 4, to the following individuals, provided that they are not covered by a collective bargaining agreement with Employer:

a. Newly Hired Associates

b. All Store Associates hired by Employer with a first day of employment on or after January 1, 2019.

All Associates are automatically covered by all 4 steps of the program by taking or continuing a job with Employer. That means that all Associates agree, as a condition of employment, to arbitrate any and all disputes, including statutory and other claims, not resolved at Step 3.

However, arbitration is a voluntary condition of employment. Associates are given the option of excluding themselves from Step 4 arbitration within a prescribed time frame. Issues at Step 4 are decided by a professional from the American Arbitration Association in an arbitration process, rather than in a court process. Arbitration thus replaces any right you might have to go to court and try your claims before a jury. You are covered by Step 4 unless and until you exercise the option to exclude yourself from arbitration. Whether you choose to remain covered by arbitration or to exclude yourself has no negative effect on your employment.

Any Associate who experiences a break in service with Employer of sixty (60) days or less, remains covered by arbitration, unless the Associate previously requested to be excluded during the prescribed time period. If the Associate becomes re-employed with the Employer following a break in service greater than sixty (60) days, the Associate is treated as a new hire and is given the opportunity to elect to be excluded from arbitration during the prescribed time period.

Article 2. Claims Subject to or Excluded from Arbitration

Except as otherwise limited, all employment-related legal disputes, controversies, or claims arising out of, or relating to, employment or cessation of employment, whether arising under federal, state, or local decisional or statutory law (“Employment-Related Claims”), shall be settled exclusively by final and binding arbitration. Arbitration is administered by the American Arbitration Association (“AAA”) under these Early Dispute Resolution Rules and Procedures and the employment arbitration portion of the AAA’s Employment Arbitration Rules and Mediation Procedures. Arbitration is held before a neutral, third-party Arbitrator. The Arbitrator is selected in accordance with these Early Dispute Resolution Rules and Procedures. If there are any differences between the Early Dispute Resolution Rules and Procedures and the employment arbitration portion of the AAA’s Employment Arbitration Rules and Mediation Procedures, the Early Dispute Resolution Rules and Procedures shall apply.

Arbitration shall apply to any and all such disputes, controversies, or claims whether asserted by the Associate against the Employer and/or against any employee, officer, director, or alleged agent of the Company. Arbitration shall also apply to any and all such civil disputes, controversies, or claims asserted by the Employer against the Associate.

All unasserted employment-related claims as of January 1, 2021 arising under federal, state, or local statutory or common law shall be subject to arbitration. Merely by way of example, Employment-Related Claims include, but are not limited to, claims arising under the Age Discrimination in Employment Act (ADEA), Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), the Family and Medical Leave Act (FMLA), the Fair Labor Standards Act (FLSA), 42 U.S.C. § 1981, including amendments to all the foregoing statutes, the Employee Polygraph Protection Act, state discrimination statutes, state statutes, and/or common law regulating employment termination, misappropriation, breach of the duty of loyalty, the law of contract or the law of tort; including, but not limited to, claims for malicious prosecution, wrongful discharge, wrongful arrest/wrongful imprisonment, intentional/negligent infliction of emotional distress, or defamation.

Claims by Associates that are required to be processed under a different procedure pursuant to the terms of an employee pension plan or employee benefit plan shall not be subject to arbitration under Step 4. Claims by Associates for state employment insurance (e.g., unemployment compensation, workers’ compensation, worker disability compensation) or under the National Labor Relations Act are also not subject to Arbitration under Step 4. Statutory or common-law claims made outside of the state employment insurance system alleging that the Company retaliated or discriminated against an Associate for filing a state employment insurance claim, however, shall be subject to arbitration.

Nothing in these Early Dispute Resolution Rules and Procedures prohibits an Associate from filing, at any time, a charge or complaint with a government agency such as the EEOC. However, upon receipt of a right to sue letter or similar administrative determination, the Associate’s claim becomes subject to arbitration as defined herein.

Article 3. Dismissal/Stay of Court Proceeding

By agreeing to arbitration, the Associate and the Employer agree to resolve through arbitration all claims described in or contemplated by Article 2 above. This means that neither the Associate nor the Employer can file a civil lawsuit in court against the other party relating to such claims.

If a party files a lawsuit in court to resolve claims subject to arbitration, both agree that the court shall dismiss the lawsuit and require the claim to be resolved through the arbitration proceedings.

If a party files a lawsuit in court involving claims that are, and other claims that are not, subject to arbitration under Step 4, such party shall request the court to stay litigation of the nonarbitrable claims and require that arbitration take place with respect to those claims subject to arbitration, assuming the earlier steps have been exhausted. The Arbitrator’s decision on the arbitrable claims, including any determinations as to disputed factual or legal issues, shall be entitled to full force and effect in any later court lawsuit on any nonarbitrable claims.

Article 4. Effective Date

As to any Individuals Covered (as defined in Article 1), the program is effective January 1, 2021.

Article 5. Time Limit to Initiate Arbitration

Arbitration must be initiated in accordance with the time limits contained in the applicable law’s statute of limitations. The period of time elapsed during which the Associate pursued his or her claims under Steps 1–3 of this Program is added on to the applicable limitations period.

Article 6. Commencement of Arbitration

To initiate arbitration, the Associate or Employer must give written notice to the other party and/or person who is alleged to be liable in the dispute (“Claimant”). Notice to the Employer must be given to the Human Relations Department.

Notice to the Associate must be given by mailing to the Associate’s last known home address.

The notice shall include a statement of the nature of the claim together with a brief description of the relevant facts, the remedies including any amount of damages being sought, and the address which the Claimant will use for the purpose of the arbitration.

Within thirty (30) days after notice of a dispute is given, the other party shall give its response (“Respondent”). The response shall state all available defenses, a brief description of relevant facts and any related counterclaims then known.

Within thirty (30) days after such counterclaims are given, the Claimant shall give Respondent a brief statement of the claimant’s defenses to and relevant facts relating to the counterclaims.

Claims and counterclaims may be amended before selection of the arbitrator and thereafter with the arbitrator’s consent. Notices of defenses or replies to amended claims or counterclaims shall be delivered to the other party within the thirty (30) days after the amendment.

Article 7. Selection of an Arbitrator

Both the Employer and the Associate shall participate equally in the selection of an Arbitrator to decide the arbitration. After receiving and/or filing an Arbitration Request Form, the Human Relations Department Manager shall ask the American Arbitration Association to provide the Company and the Associate a panel of seven (7) neutral arbitrators with experience deciding employment disputes.

The Employer and the Associate then shall have the opportunity to review the background of the arbitrators by examining the materials provided by the American Arbitration Association. Within seven (7) calendar days after the panel composition is received, the Associate and the Employer shall take turns striking unacceptable arbitrators from the panel until only one remains. The Associate and the Employer will inform the American Arbitration Association of the remaining arbitrator who will decide the dispute. However, if both parties agree that the remaining arbitrator is unacceptable, a second panel will be requested from the American Arbitration Association and the selection process will begin again. If both parties agree no one on the second panel is acceptable, either party may request the American Arbitration Association to simply appoint an Arbitrator who was not on either panel.

Article 8. Time and Place of Arbitration

The arbitration hearing shall be held at a location within fifty (50) miles of the Employer, unless the parties agree otherwise. The Parties and the Arbitrator shall make every effort to see that the arbitration is completed, and a decision rendered, as soon as possible. There shall be no extensions of time or delays of an arbitration hearing except in cases where both Parties consent to the extension or delay, or where the Arbitrator finds such a delay or extension necessary to resolve a discovery dispute or other matter relevant to the arbitration.

Article 9. Right to Representation

Both the Associate and the Employer shall have the right to be represented by an attorney. If the Associate elects not to be represented by an attorney during the arbitration proceedings, the Employer will not have an attorney present during the arbitration proceedings.

Article 10. Discovery

1. Initial Disclosure

Within fourteen (14) calendar days following the appointment of an Arbitrator, the Parties shall provide each other with copies of all documents upon which they rely in support of their claims or defenses. However, the parties need not provide privileged documents that are protected from disclosure because they involve attorney-client, doctor-patient, or other legally privileged or protected communications or materials. Throughout the discovery phase, each party shall provide the other party with any and all such documents relevant to any claim or defense.

Upon written request, the Associate shall be entitled to a copy of all documents (except privileged documents as described above) in the Associate’s “PERSONNEL FILE.”

2. Other Discovery

a. Interrogatories/Document Requests

Each party may propound one (1) set of twenty (20) interrogatories (including subparts) to the other party. Interrogatories are written questions asked by one party to the other; the recipient must answer under oath. Such interrogatories may include a request for all documents upon which the responding party relies in support of its answers to the interrogatories. Answers to interrogatories must be served within twenty-one (21) calendar days of receipt of the interrogatories.

b. Depositions

A deposition is a statement under oath that is given by one party in response to specific questions from the other party. It is usually recorded or transcribed by a court reporter. Each party shall be entitled to take the deposition of up to three (3) relevant individuals of the party’s choosing. The party taking the deposition shall be responsible for all associated costs, such as the cost of a court reporter and the cost of a transcript.

c. Additional Discovery

Upon the request of any party and a showing of appropriate justification, the Arbitrator may permit additional relevant discovery, if the Arbitrator finds that such additional discovery is not overly burdensome, and will not unduly delay the conclusion of the arbitration.

3. Discovery Disputes

The Arbitrator shall decide all disputes related to discovery. Such decisions shall be final and binding on the parties. In ruling on discovery disputes, the Arbitrator need not follow but may consult the discovery rules contained in the Federal Rules of Civil Procedure.

4. Time for Completion of Discovery

All discovery must be completed within ninety (90) calendar days after the selection of the Arbitrator, except for good cause shown as determined by the Arbitrator. In order to expedite the arbitration, the parties may initiate discovery prior to the appointment of the Arbitrator.

Article 11. Hearing Procedure

1. Witnesses

Witnesses shall testify under oath, and the Arbitrator shall afford each party a sufficient opportunity to examine its own witnesses and cross-examine witnesses of the other party. Either party may issue subpoenas compelling the attendance of any other person necessary for the issuing party to prove its case.

a. Subpoenas

A subpoena is a command to an individual to appear at a certain place and time and give testimony. A subpoena also may require that the individual bring documents when they give testimony. To the extent authorized by law, the Arbitrator shall have the authority to enforce and/or cancel such subpoenas. Subpoenas must be issued no less than ten (10) calendar days before the beginning of an arbitration hearing or deposition.

The party issuing the subpoena shall be responsible for the fees and expenses associated with the issuance and enforcement of the subpoena, and with the attendance of the subpoenaed witness at the arbitration hearing.

b. Sequestration

The Arbitrator shall ensure that all witnesses who testify at the arbitration are not influenced by the testimony of other witnesses. Accordingly, unless the Arbitrator finds cause to proceed in a different fashion, the Arbitrator shall sequester all witnesses who will testify at the arbitration; however, the Arbitrator shall permit the Associate involved in the arbitration and the Employer’s designated representative to remain throughout the arbitration, even though they may or may not testify at the hearing.

2. Evidence

The parties may offer evidence that is relevant and material to the dispute and shall produce any and all non-privileged evidence that the Arbitrator deems necessary to a determination of the dispute. The Arbitrator need not specifically follow the Federal Rules of Evidence, although they may be consulted to resolve questions regarding the admissibility of particular matters.

3. Burden of Proof

Unless the applicable law provides otherwise, the party requesting arbitration or the party filing a counterclaim has the burden of proving a claim or claims by a preponderance of the evidence. To prevail, the party bringing the arbitration must prove that the other’s conduct was a violation of applicable law.

4. Briefing

Each party shall have the opportunity to submit one (1) dispositive motion, one (1) pre-hearing brief, and one (1) post-hearing brief, which is a written statement of facts and law, in support of its position. Submission of such briefs is not required; however, briefs shall be typed and shall be limited in length to twenty (20) double-spaced pages.

5. Transcription

The parties may arrange for transcription of the arbitration by a certified reporter. The party requesting transcription shall pay for the cost of transcription.

6. Consolidation

a. Claims

The Arbitrator shall have the power to hear as many claims as a Claimant may have consistent with Article 2 of these Early Dispute Resolution Rules and Procedures.

The Arbitrator may hear additional claims that were not mentioned in the Arbitration Request Form. To add claims, the Claimant must notify the other party at least thirty (30) calendar days prior to a scheduled arbitration. The additional claims must be timely, under the applicable law, as of the date on which they are added. The other party must not be prejudiced in its defense by such addition.

b. Parties

The Arbitrator shall not consolidate claims of different Associates into one (1) proceeding. Nor shall the Arbitrator have the power to hear an arbitration as a class or collective action. (A class or collective action involves representative members of a large group, who claim to share a common interest, seeking relief on behalf of the group.)

7. Confidentiality

All aspects of an arbitration pursuant to these Early Dispute Resolution Rules and Procedures, including the hearing and recording of the proceeding, shall be confidential and shall not be open to the public. The only exceptions are: (i) to the extent both parties agree otherwise in writing; (ii) as may be appropriate in any subsequent proceeding between the parties; or (iii) as may otherwise be appropriate in response to a governmental agency, legal process, or as required by law.

All settlement negotiations, mediations, and any results shall be confidential.

Article 12. Substantive Choice of Law

The Arbitrator shall apply the substantive law, including the conflicts of law, of the state in which the Associate is or was employed. For claims or defenses arising under or governed by federal law, the Arbitrator shall follow the substantive law as set forth by the United States Supreme Court. If there is no controlling United States Supreme Court authority, the Arbitrator shall follow the substantive law that would be applied by the United States Court of Appeals and the United States District Court for the District in which the Associate is or was employed.

Article 13. Arbitrator Authority

The Arbitrator shall conduct the arbitration. The arbitrator shall have the authority to render a decision in accordance with these Early Dispute Resolution Rules and Procedures, and in a manner designed to promote rapid and fair resolution of disputes.

The Arbitrator’s authority shall be limited to deciding the case submitted by the party bringing the arbitration. Therefore, no decision by any Arbitrator shall serve as precedent in other arbitrations.

The arbitration procedure contained herein does not alter the Associate’s employment status. The status remains alterable at the discretion of the Employer and/or terminable at any time, at the will of either the Associate or the Employer, with or without cause or prior notice. Accordingly, the Arbitrator shall have no authority to alter the Associate’s employment status by, for example, requiring that the Employer have “cause” to discipline or discharge an Associate. Nor may the arbitrator otherwise change the terms and conditions of employment of an Associate unless required by federal, state, or local law, or as a remedy for a violation of applicable law by the Employer with respect to the Associate.

The Arbitrator shall have the power to award sanctions against a party for such party’s failure to comply with these Early Dispute Resolution Rules and Procedures or with an order of the Arbitrator. These sanctions may include assessment of costs or prohibitions of evidence. If justified by a party’s wanton or willful disregard of these Early Dispute Resolution Rules and Procedures, the Arbitrator may award the sanction of an adverse ruling in the arbitration against the party who has failed to comply.

Article 14. Award

Within thirty (30) calendar days after the later of the close of the hearing or the receipt of post-hearing briefs, if any, the Arbitrator shall mail to the parties a written decision. The decision shall specify appropriate remedies, if any, if a violation of law is found. If the Associate’s claim arises under federal or state statutory law, the award should include findings of fact and conclusions of law; otherwise, the inclusion of such findings and conclusion is at the Arbitrator’s discretion. The parties to an arbitration shall be provided with a copy of the Arbitrator’s award.

Article 15. Fees and Expenses

1. Costs Other Than Attorney Fees

i. Definitions

Costs of an arbitration include the daily or hourly fees and expenses (including travel) of the Arbitrator who decides the case, filing or administrative fees charged by the AAA, the cost of a reporter who transcribes the proceeding, and expenses of renting a room in which the arbitration is held. Incidental costs include such items as photocopying or the costs of producing witnesses or proof.

ii. Filing Fee/Costs of Arbitration

An Associate initiating arbitration shall pay the cost of arbitration up to a maximum of the least of one (1) day’s base pay or One Hundred Twenty-Five Dollars ($125), whichever is less. Upon filing the request for arbitration, the Associate shall remit such fee. The Employer shall pay the remainder of the costs of the arbitration. The Employer shall pay the entire filing fee should it initiate arbitration. Except as provided below, each party shall pay its own incidental costs, including attorneys’ fees.

The AAA has developed guidelines for waiving administrative fees. This Plan is subject to those guidelines.

2. Reimbursement for Legal Fees or Costs

The program does not infringe on either party’s right to consult with an attorney at any time. In fact, the Employer will reimburse an Associate for this legal consultation and/or representation during Step 4 of the program, at a maximum benefit of Two Thousand Dollars ($2,000) per Associate in a rolling twelve (12) month period. If the Associate is not represented by counsel, the Gallery will reimburse an Associate for incidental costs up to a maximum of Two Hundred Fifty Dollars ($250) per Associate in a rolling twelve (12) month period. The Associate will not be entitled to such reimbursement by the Employer if the Arbitrator determines the arbitration claim by the Associate was frivolously filed. Any reimbursement to the Associate will occur following the conclusion of the proceedings upon submission of the Associate’s bills for costs of legal services or incidental costs.

3. Shifting of Costs

If the Associate prevails in arbitration, whether or not monetary damages or remedies are awarded, the filing fee shall be refunded to the Associate. The Arbitrator may (based on the facts and circumstances) also require that the Employer pay the Associate’s share of the costs of arbitration and incidental costs.

Article 16. Remedies and Damages

Upon a finding that a party has sustained its burden of persuasion in establishing a violation of applicable law, the Arbitrator shall have the same power and authority as would a judge to grant any relief, including costs and attorneys’ fees, that a court could grant, in conformance with applicable principles of common, decisional, and statutory law in the relevant jurisdiction.

Article 17. Settlement

The parties may settle their dispute at any time without involvement of the Arbitrator.

Article 18. Enforceability

The arbitration agreement, the arbitration proceedings, and any award rendered pursuant to them shall be interpreted under, enforceable in accordance with, and subject to the Federal Arbitration Act, 9 U.S.C. § 1, et seq. regardless of the state in which the arbitration is held or the substantive law applied in the arbitration. If for any reason the Federal Arbitration Act is inapplicable to enforce this agreement, the Parties agree it will be enforced under the governing state arbitration statute(s).

Article 19. Appeal Rights

The decision rendered by the Arbitrator shall be final and binding as to both the Associate and the Employer. Either party may appeal the Arbitrator’s decision to a court in accordance with the provisions of the Federal Arbitration Act, 9 U.S.C. § 1, et seq.

Article 20. Severability/Conflict with Law

In the event that any of these Early Dispute Resolution Rules and Procedures are held to be unlawful or unenforceable, the conflicting rule or procedure shall be modified automatically to comply with applicable law.

In the event of an automatic modification with respect to a particular rule or procedure, the remainder of these rules and procedures shall not be affected. An automatic modification of one of these rules or procedures shall apply only in regard to the particular jurisdiction and dispute in which the rule or procedure was determined to be in conflict with applicable law. In all other jurisdictions and disputes, these Early Dispute Resolution Rules and Procedures shall apply in full force and effect.

Article 21. Cancellation or Modification of Dispute Resolution Rules and Procedures or Program

The Gallery may alter these Early Dispute Resolution Rules and Procedures or cancel the program in its entirety upon giving thirty (30) days’ written notice to Associates. If such notice is not provided to an Associate, the Early Dispute Resolution Rules and Procedures that covered the Associate prior to the modification or cancellation shall govern.