Designing an Internal ADR Program

Richard A. Posthuma, J.D., Ph.D., GPHR, SPHR 2010

Key ADR Topics

• Informal conflict resolution• Peer review• Grievance/complaint procedures• Ombudsman• Mediation• Arbitration

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Popularity of ADR

• There are more than 20,000 ADR professionals in the U.S.

• The Federal Mediation and Conciliation Service now employs nearly 200 full-time mediators.

• The U.S. Postal Service conducts more than 10,000 mediations a year through its REDRESS program.

• The Equal Employment Opportunity Commission employs more than 100 full-time mediators to assist with employment discrimination cases.

• According to a 1998 survey by PricewaterhouseCoopers and Cornell University, 88 percent of American corporations had used mediation and 79 percent used arbitration in the previous three years. In addition, more than 84 percent said that they were likely or very likely to use mediation in the future, while 69 percent said the same about arbitration.

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Key ADR Topics

Open-door policies may refer to:

• Informal conflict resolution.• The entire in-house ADR program.• A grievance procedure in a non-union

workplace.

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Informal Conflict Resolution

• The most common method.• No formal system, paper, procedure, etc.• Often the most effective: Avoids escalation of

conflict.• Utilizes employee relations skills of

supervisors and HR staff.• Often used with more formal methods.

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Peer Review

• A process whereby workers at the same or similar level listen to employee complaints and give their recommendations, either binding or not.

• Not the same as 360 degree feedback which is a performance evaluation by your peers.

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Peer Review

•The process is somewhat formal:> Specific issue/complaint.> Meeting with peers.

•Anticipated benefits:> Peers more objective.> Results more acceptable.

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Grievance/Complaint Procedures

• Union or non-union.• Government agencies in-house procedures.• Relatively formal; forms, meetings, requests or

demands, answers, etc.• Non-union, private sector:

> May be binding or not.> Pre-dispute or post-dispute.

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Ombudsman

Historically:• In 1800’s, a Swedish public official who

investigated government agency infringement of rights of individuals.

Nowadays:• An in-house staff person

> Usually outside the normal chain of command

> Attempts to resolve employee complaints – usually informally, or by using an organization’s resources.

Practice Point:• Sometimes this person is really a mediator or

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Mediation

• Third party> Mediator

• Informal• Mediator tactics push employer and

employee(s) to voluntarily agree.• May be a necessary step before arbitration.

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Mediation

Effective mediation tactics:

• Pressure• Process• Friendliness• Avoid negative emotions• Discuss alternatives

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Arbitration

• Third party> Arbitrator

• Semi-formal, trial-like hearing.• Arbitrator’s decision is binding on the

employer and employee(s).

 

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Types of Arbitration

• Grievance arbitration:> Under a collective bargaining agreement (union).> Used to determine if a collective bargaining

agreement has been violated.• Employment arbitration:

> Also known as non-union grievance arbitration.> Used to resolve complaints about discrimination and

other matters> An employer either permits or requires employees to

file complaints to an arbitrator where there is no union.

> Employers see this as a way to avoid litigation.• Interest arbitration:

> Used to determine the terms of a new contract.> Used by public-sector employees (police and fire),

athletes, etc.

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Employment Arbitration

• Arbitration arises out of an agreement between employer and employee.

• Issues:> Valid waiver of right to sue.> Protection of statutory rights.

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Employment Arbitration

Validity of Waiver:

• Statutory authority (FAA, Title VII, etc.); Circuit City v. Adams

• Pre-dispute• Voluntary• Knowing• “May” arbitrate versus “must” arbitrate

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Employment Arbitration

Protection of statutory rights:

• Arbitrators must be neutral and fair.> Hooters used arbitrators selected by the

employer.• Arbitrators must comply with applicable statutes.

> But what standard? (Are they making law or applying law?)

• Arbitration agreement must provide fair procedures.

• Arbitration agreement must provide fair substantive remedies.

• Protection of public interest in a private setting?

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Employment Arbitration

• Employers may be able to avoid costly litigation with enforceable arbitration agreements.

• Enforcement of arbitration agreements is a tricky legal issue.> Consult your attorney for this and all ADR

policy language.

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Best ADR Policies

High

User-Friendliness

Low

Low High

Legal Enforceability© SHRM 2010 18

Summary

• There are many types of in-house ADR programs.

• An effective policy may reduce litigation costs.

• Policies should be fair and legal.

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