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Threat of baseball-style arbitration leads to settlement of contract dispute

Baseball-style dispute resolution is underutilized as a tool to motivate contracting parties to be reasonable in their settlement proposals.  (In that process, each party proposes one or two possible res­ol­u­tions and the judge or arbitrator decides which of the proposals is closest to the “correct” one.)  The process can work nicely:  Last week, my hometown Houston Astros and one of their starting pitchers were about to go to arbitration of the pitcher’s salary. The team proposed $3 million, the pitcher proposed $3.9 million, and the arbitral tribunal would have to pick one of the two proposals. The parties elected not to go forward with the arbitration; instead, they agreed to split the difference at a salary of $3.45 million.   See Jake Kaplan, Astros avoid arbitration with starting pitcher Mike Fiers, Houston Chronicle, Jan. 19, 2017.  “The Astros have still yet to reach settlements with starting pitcher Collin McHugh, super utility man Marwin Gonzalez and relief pitcher Will Harris. If the sides are unable to find common ground, an arbiter will decide between the salary figures proposed last week.” Id.

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