Language Discrimination in Arbitration: A New Perspective on Impartial Decision Making

Gavel on block on a table

Arbitrators cannot be biased. Period. If an arbitrator creates a reasonable impression of possible bias against a party, the arbitration process can be corrupted, and any resulting award is subject to being vacated. Upon being vacated, all the time and money expended in arbitration -- a process that is supposed to be fair, quick, and efficient — will go up in smoke.

We can now add language discrimination to the list of acts that create a reasonable impression of bias by an arbitrator. In yesterday's appellate decision in FCM Investments, LLC v. Grove Pham, LLC, the arbitrator found against a party on credibility grounds because she used an interpreter to testify at the evidentiary hearing. The arbitrator reasoned that the party had been in the country for decades, was a sophisticated businesswoman, and previously acted as an interpreter for others, making her use of an interpreter at the hearing look like a tactical ploy.

The Court of Appeal disagreed, because each of the arbitrator's findings was a biased misconception. People can and do live and conduct business in the United States for decades using languages other than English. Moreover, acting as an interpreter for others does not necessarily mean a witness speaks English with sufficient fluency to testify at arbitration. "Every day across the country, immigrants and refugees turn to family and friends to fill language gaps in healthcare, business, and government settings," the court noted, so the witness's rendering of assistance to others in the past should not have given the arbitrator reason to believe she was using an interpreter to gain an advantage at the arbitration hearing. On this record, the Court of Appeal had no difficulty concluding that the party's rights were substantially prejudiced by the arbitrator's language discrimination/bias, which compelled an order vacating the award.

The Court of Appeal went on to make a broader comment on language discrimination in litigation. In 2015, the Legislature added new statutory provisions emphasizing the importance of providing interpreters to "all parties who require one." As a matter of public policy, therefore, courts cannot "draw adverse credibility inferences from a litigant's decision to exercise that right." Although these rules apply in court, the same public policy must apply in arbitration as well. "Justice is served if litigants feel assured that their choice to use an interpreter in arbitration proceedings will not imperil their expectation of impartial decision-making."

As attorneys and arbitrators, we must all strive to make arbitration free from arbitrary considerations of race, gender, language proficiency, or any other class or characteristic that is protected from discrimination. The integrity of the arbitration process depends on it.

The fascinating decision, which should be reviewed carefully by lawyers and arbitrators, can be found here.

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