2007 AEC Mediation WG Report
Appendix A
Association Executives Committee
ASSOCIATION MEDIATION WORK GROUP
May 2007
Final Report
ASSOCIATION MEDIATION WORK GROUP
May 2007
Final Report
Work Group Objective
To review and modify the Standards of Conduct and the Unacceptable Business Practices (UBPs) for REALTOR® associations; to establish new procedures for submitting to mediation; and to identify consequences for failure to participate in NAR's mandatory "Mediation Procedures to Resolve Alleged Violations of the Unacceptable Business Practices," as well as consequences for violating the UBPs.
Background
When the REALTOR®association environment became increasingly competitive following adoption of the Board of Choice policy, the level of trust, support, and communication among some staff and volunteer leaders diminished. To address this, during the 1999 Midwinter Meetings the AEC approved a recommendation to form a work group charged as follows: “To identify models of cooperation and develop standards of conduct for REALTOR®associations as they face competitive challenges that have diminished cooperation among associations and created adversarial relationships in common service areas. To recommend parameters that identify and eliminate unacceptable and unethical actions and create opportunities to enhance cooperative working relationships in our board of choice environment.”
The work group adopted 14 aspirational “Standards of Conduct for REALTOR® Associations” that describe high standards of professional service and conduct among REALTOR® association volunteer and staff leadership. Each year the chief elected officer and chief staff executive of each local and state association are expected/encouraged to sign the standards as a joint pledge to assure member and public confidence in the integrity and service of REALTOR® association leadership. (Attachment A)
The work group identified five Unacceptable Business Practices (UBPs) – behaviors and business practices to be avoided by REALTOR® associations. The UBPs are intended to encourage awareness of behaviors that REALTOR® associations should avoid, and to eliminate such practices from the industry. (Attachment A)
During the 2000 Midyear Meeting the AEC approved the following work group recommendation, which was subsequently approved by the Board of Directors: “Encourage adherence to the Standards of Conduct for REALTOR®Associations; adopt the Unacceptable Business Practices; adopt the Mediation Procedures for REALTOR®Associations for use by those REALTOR®associations who are unable to resolve differences with other REALTOR®associations who have allegedly engaged in one or more Unacceptable Business Practices. “ (Attachment B)
During the 2000 REALTORS® Conference, the Board of Directors approved a motion to amend Article IV of the NAR Bylaws to obligate associations to mediate disputes with other member associations arising out of the UBPs. (Attachment C)
Since the Mediation Procedures were approved in May 2000, there have been nine inquiries into the process. Two of the requests for mediation were denied because the associations were engaged in lawsuits involving alleged violations of the UBPs, and the Mediation Procedures provide that NAR will not process a mediation request if the alleged violations arise out of the same course of conduct or series of events that are at issue in pending litigation. Other requests did not proceed to mediation because the alleged violations did not fall under any of the five UBPs. Another was withdrawn, and another was resolved through discussions between one of the AEs and the NAR EVP/CEO.
Only one request was determined to have met the criteria for mediation. Upon notification, the respondent association initially refused to participate in mediation until NAR informed the association that mediation was mandatory under the NAR Bylaws. Mediation occurred shortly thereafter and the results were reported to have been encouraging.
AEC leadership and staff felt it was time to reevaluate the mediation procedures to ensure that they provide a fair and valuable service to REALTOR® association staff and volunteer leaders. As a result, the Executive Committee approved an AEC recommendation during the 2006 REALTORS® Conference that a work group be formed to reexamine the current Standards of Conduct, UBPs, and Mediation Procedures.
Work Group Discussion and Recommendations
The AEC Association Mediation Work Group, which met April 3-4, 2007, in Chicago, included REALTORS® and AEs of the Membership Policy and Board Jurisdiction and Professional Standards committees, and other AE representatives.
Dispute Resolution Options
Work group members agreed that associations should attempt to resolve differences with one another through some means within the REALTOR® organization, and that NAR should provide a sequenced set of dispute resolution tools, use of which would be completely voluntary. The proposed options include an ombuds program, voluntary (though binding should agreement result) mediation, and voluntary (though binding) arbitration. The following MOTION was made, seconded, and carried:
“That NAR make ombuds services available to resolve disputes between REALTOR® associations. Participation in an ombuds process is discretionary on the part of any association. In instances where disputes between associations are not resolved through an ombuds or where parties choose not to avail themselves of ombuds services, that NAR make mediation services available to the parties. Mediation, under these circumstances, will occur only if all parties voluntarily participate. In instances where mediation is unsuccessful, or where parties choose not to mediate, NAR will make arbitration services available to the parties. Arbitration, under these circumstances, will occur only if all parties voluntarily agree to participate and be bound by the decision/award of the arbitrator(s).”
The proposed ombuds program is intended to be a voluntary, informal, and confidential process that facilitates fair and equitable resolutions of concerns/issues between REALTOR® associations. Ombuds might be selected from the ranks of NAR’s William R. Magel Award recipients, retired Almon R. Smith AE Leadership Society recipients, other retired AEs, Distinguished Service Award recipients, or retired NAR staff. The services of three ombuds would be made available to all REALTOR® associations; and to ensure confidentiality, association staff and volunteer leaders will have a direct line to the ombuds they choose to consult with. The ombuds would serve as an information and communications resource, advisor, dispute resolution expert, and change agent, and would be compensated per case. NAR would cover all costs associated with the ombuds service.
Mediation services should be available to all disputing associations upon request, even if the parties are engaged in a lawsuit. The parties would choose from among those who conduct the biannual NAR mediation training. Mediation would be conducted in Chicago, and NAR would cover all costs associated with mediation, except for disputants’ travel expenses. If associations choose to use non-REALTOR®association mediators who have not participated in NAR’s mediation training, mediation would be at their own expense. The president of each association involved in the dispute could identify up to five participants, who must have authority to bind their association to any resulting agreement, to attend the mediation.
Arbitration services would be available to disputing associations upon request, even if the parties are engaged in a lawsuit, provided the parties first terminate the litigation. Each party would choose one arbitrator from among the individuals who conduct the biannual NAR mediation training. The arbitrators so chosen would then choose a neutral arbitrator to chair the proceeding. Arbitration would be conducted in Chicago, and NAR would cover all costs associated with arbitration, except for travel expenses of the disputants. All parties would be required to agree in advance to accept the arbitration decision, which would be binding and enforceable.
Upon acceptance of the proposed three-tiered voluntary dispute resolution process, the NAR Board of Directors will be asked to rescind the article of the NAR Bylaws that obligates associations to mediate disputes with other member associations arising out of the UBPs. The following work group MOTION was made, seconded, and carried:
“That the NAR Bylaws, Article IV, Section 3, be rescinded subject to approval of the new proposed three-tiered voluntary process for resolving disputes between REALTOR® associations.”
Standards of Conduct and Unacceptable Business Practices
The work group reviewed the current Standards of Conduct and UBPs to determine whether they should remain as written or whether they should be refocused. The work group determined that a separate review of the aspirational Standards of Conduct is necessary; but that the standards not be part of the new proposed dispute resolution process. Further, since the work group recommends a completely voluntary process, the UBPs will also be eliminated, to minimize barriers and to encourage a more open process and environment for resolving differences. The following MOTION was made, seconded, and carried:
“That the aspirational Standards of Conduct and the Unacceptable Business Practices not be part of the proposed three-tiered REALTOR®association dispute resolution system, and that a work group be formed to consider whether the Standards of Conduct should be revised and remain as part of the on-line President’s Leadership Guide and also added to other leadership materials for staff and volunteer leaders.”
Education
The work group acknowledged that both staff and volunteer leaders need to be fully informed of the proposed dispute resolution process. Greater awareness will give associations more ready access to the resources available to help them address concerns and resolve conflict with other associations. Greater awareness may also encourage more ethical behavior and help associations distinguish between competitive business practices and unethical or unacceptable business practices.
Unlike the current mediation program, promotion and education efforts for the new proposed dispute resolution process need to be directed toward both staff and volunteer leaders. To ensure effective resolution, all association leaders need to be involved in the process, not just the chief staff executive. Education opportunities include the following:
- Information on REALTOR®.org
- Articles in REALTOR®Magazine andREALTOR®Association Executive Magazine
- Webcast for AEs and presidents
- Coverage in on-line President’s Leadership Guide
- Mention at New AE Orientation
- Sessions at AE Institute that include topics on working with difficult people, negotiation skills, resolving conflict, and “how to” sessions that explain the available resources for conflict resolution
- Outreach presentations during state and regional meetings
- Periodic announcements at NAR meetings (AEC/Forum, President and AE roundtable sessions, State and Board Leadership forums)
Next Steps
1. Work group report is presented during the 2007 Midyear AEC/Forum, and AEC members are asked to approve a recommendation to support the proposed dispute resolution process.
2. Pending AEC approval, during the 2007 Midyear Meeting the Membership Policy and Board Jurisdiction and Professional Standards committees would each be asked to support the proposed dispute resolution process.
3. With support from the Membership Policy and Board Jurisdiction Committee and the Professional Standards Committee the AEC will submit a budget request to the Finance Committee at the 2007 REALTORS® Conference and Expo to cover the cost of the dispute resolution process. The Executive Committee and Board of Directors will be asked to accept the proposal and the budget request, if approved by Finance. The Board of Directors will also be asked to rescind the article of the NAR Bylaws that obligates associations to mediate disputes with other member associations.
4. Form a work group to review the Standards of Conduct for REALTOR® Associations and determine where these standards should be incorporated to ensure awareness and understanding among staff and volunteer leaders.
Work Group Members
Diane Ruggiero, MO – CHAIR
Walt Baczkowski, MI
Allyson Bernard, CT
Bob Brown, CO
Steve Casper, OH
Wally Folks, TX
John Fridlington, FL
Steve Hoover, VA
Alice Martin, AZ
Jenny Pakula, OR
Kathy Roberts, FL
Mark Milligan, FL
Frank Pietranton, DC
Randy Raynolds, IL
Pat Reilly, NY
Stan Sieron, IL
NAR Staff
Gar Anderson
Kevin Milligan
Cliff Niersbach
Cindy Sampalis
Revised 5-14-07
