Tag Archives for Beis Din

Agreements To Arbitrate In Bais Din: Get It In Writing!

A recent decision from a New York State Supreme Court illustrates the importance of following proper procedure when arbitrating in Bais Din. In that case, a homeowner’s insurance company sued a Bais Yaakov school, alleging that work done to expand the school building had damaged their insured’s property, requiring the insurance company to pay substantial claims to its insured.

According to the facts in the decision:

Beth Jacob began construction to expand its building at 98-100 Lawrence Street, Brooklyn, New York, in late March or early April 2006. In mid-October 2006 Rabbi Michael Levi (Levi) was served with a summons to appear on behalf of Beth Jacob at the Beis Din Zedek Rabbinical Court of the Central Rabbinical Congress of the United States and Canada (Beis Din). The proceeding was initiated by Rabbi Aharon Zaberman and Eli Baumwolspiner. According to Beth Jacob, the parties appeared before the Beis Din on October 22, 2006. Levi asserts, in his affidavit, that Eli Baumwolspiner, Zaberman, and Levi signed an agreement to have the case heard by the Beis Din, after which the three-member panel of the Beis Din heard the parties’ arguments. While Levi contends that the Beis Din did not require Beth Jacob to pay any money to Baumwolspiner, and permitted the construction to continue, there are no documents submitted on this motion regarding the parties’ agreement to arbitrate, or the Beis Din’s determination. The Baumwolspiner’s maintain that they merely sought the Beis Din’s assistance in preventing further damage, but did not submit the issue of payment for the damages to the Beis Din for consideration.

The property owner’s insurance company, Tower Insurance, paid its insured for the damage and then sued the Bais Yaakov. The school argued that the court should “compel arbitration (in the Beis Din) on the ground that plaintiff’s subrogors are bound by their agreement to arbitrate, and Tower stands in their shoes.”

The insurance company argued that there was no agreement or contract binding the parties to adjudicate their claims before Bais Din.  The court agreed, noting that:

Beth Jacob has produced no written agreement to arbitrate, either from prior to the parties’ appearance at the Beis Din, or dating from that appearance. An agreement to arbitrate must be in writing in order to be enforced. CPLR 7501. Furthermore, that writing must make it clear what issues are to be arbitrated, and make the parties’ intention to arbitrate the dispute unequivocal.

The upshot is that parties who are in Bais Din should be certain that the agreement to arbitrate, as well as the scope of the arbitration, are well documented. To protect their authority, Batai Dinim should not proceed with a hearing unless and until all parties enter in such written agreements.

Interfering with business relationships

Rabbi Max Sutton’s recent column in Community discusses the halachot of interfering with another person’s contract or business relationship.  Rabbi Sutton uses hypotheticals to highlight the following questions:

  1. May one negotiate with a licensor for exclusive rights to a license currently held by a competitor?
  2. May a salesman who leaves an employer for a competitor lure company accounts to his new employer?  If he may, may he redirect unfulfilled orders from his old employer to his new employer?
  3. May an employee quit his job and open a business in direct competition with his previous employer?

The basic rule is that one may not induce a breach of contract, but one may compete for the same contract at the end of the contract term or when the contract has been fully performed.  The full article can be read here.

Rabbi Sutton applies the above rule to employment relationships in current business settings, but does not draw a distinction in this regard between contract employees and at-will employees.  An at-will relationship, which is more common, allows either party to terminate the employment relationship for any reason without liability.  It seems to me that making an offer to a competitor’s at-will employee is not the same as inducing a breach of an agreement, since the employer specifically assumed that risk when agreeing to the at-will employment or by not offering a contract for a specific term.

Saying that the competitor is inducing a breach of the agreement would imply that an at-will employment is something other than at-will, i.e., that terminating the employment is a breach of an agreement.  However, the understanding between employer and employee is that neither party is required to continue the relationship.  I would argue that just as it is not a breach of the agreement for the employee to look for another job, it is not an inducement to breach for a competitor to make an offer to the employee.

The Satmar Saga Continues

In yet another Satmar lawsuit, this one involving control of the cemetary where the previous Rebbe is buried, Justice Victor J. Alfieri ruled that the parties are required to arbitrate the dispute before a Bais Din (Beth Din). The judge based his decision on a provision in the Congregation’s bylaws stating that “a member of the Congregation shall [or "must", depending on the varying interpretations from the Yiddish] be expelled if that member declines to appear before a Rabbinical Court [alternatively, "submit to a Din Torah"].”

The Court stated that “since the Congregation’s bylaws are a secular corporate document adopted by its members pursuant to New York State law,this Court finds that the Congregation and its members adopted the Rabbinical Court, i.e., the Din Torah (Rabbinical Court proceeding) as the alternative dispute resolution between and among members of its congregation. As such, this Court finds that the parties are required to arbitrate the within action before the Rabbinical Court. ” A copy of the decision is available here.

I am not sure that the judge realizes the implications of this decision. As I understand it, this means that any individuals who consider themseleves members of the Satmar congregation are legally obligated to arbitrate every dispute, even those not involving control of the Congregation or its assets. If, for example, two Satmar individuals have a business dispute and one of them sues in court, the court could compel arbitration instead. Am I reading this wrong?