Contract Disputes Memo

Contract Disputes

Case Overview
A recent Wisconsin state court ruling on employee/employer contract disputes set the precedent for future contract disputes and arbitration (Engel, 2012).   The court decided that a wrongful termination lawsuit brought on by an executive employee of Merge Healthcare had merit even though a written employee contract had an arbitration clause for any legal disputes. W. Mortimore, the former chief executive officer of Merge Healthcare Inc., alleged wrongful termination and sought severance payments as well as benefits and payment for legal expenses incurred as part of the lawsuit.   The company claimed that Mortimore resigned after an independent investigation into Merge’s financial statements proved fraudulent.   In the lawsuit, Mortimore claimed that he was forced to resign or face termination; the firing was improper because Mortimore felt the allegations which led to his termination were unfounded (Engel, 2012).   The main issue was Mortimore’s claim that an oral contract, which didn’t include any arbitration provisions should be held to the same standard as a written employment contract which did include a mandatory arbitration clause.   The court’s decision pushed the issue back to arbitration stating its decision clarifies that if an employee challenges the legitimacy of a contract, the dispute must be arbitrated.
Overview of ADR
Court systems are increasingly backlogged with cases, some frivolous and some legitimate.   However, because of the increasing number of lawsuits, individuals and businesses are taking advantage of nontraditional forms of litigation.   Less expensive and nontraditional litigation now exists to help alleviate the growing number of lawsuits creating backlogs in the court systems (Cheeseman, 2010).   The most common alternatives for settling disputes are referred to as mediation and arbitration and are collectively known as Alternative Dispute Resolution (ADR). These two forms of nontraditional litigation...