1. Designing an Internal ADR Program
Richard A. Posthuma, J.D., Ph.D., GPHR, SPHR
This presentation provides an overview of how employers can use alternative dispute resolution programs to resolve conflicts with employees. These dispute resolution mechanisms are considered alternatives to more formal resolution methods, such as a lawsuit.
The complete presentation will take 60 to 90 minutes to complete depending on the number of questions and length of discussions about each topic.

2. Informal conflict resolution Peer review
Key ADR Topics
Informal conflict resolution
Peer review
Grievance/complaint procedures
Ombudsman
Mediation
Arbitration
These terms will be defined and discussed in the following slides.
These are important terms and concepts related to ADR. For further reading refer to:
Lipsky, D.B. & Seeber, R.L. (1998). The Appropriate Resolution of Corporate Disputes: A Report on the Growing Use of ADR by U.S. Corporations. Ithaca, NY: Cornell/PERC Institute on Conflict Resolution.
McDermott, E.P., & Berkeley, A.E. (1996). Alternative Dispute Resolution in the Workplace: Concepts and Techniques for Human Resource Executives and Their Counsel. Westport, CT: Quorum Books.
U.S. General Accounting Office. (1997). ADR: Employers’ Experience with ADR in the Workplace. Washington, DC: GAO.
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3. 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.
ADR procedures related to workplace disputes are very popular.
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4. Open-door policies may refer to: Informal conflict resolution.
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.
Open-door policies are informal dispute resolution mechanisms that many employers adopt. Typically, these refer to the opportunity for employees to come into the boss’s office to discuss their complaints.
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5. 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.
Informal methods are probably the most common and may be the most effective. Systems like these may help to avoid an escalation of conflict that arises when employees seek outside legal representation.
The key to making these methods successful is the people skills of the employer representatives (e.g., supervisors, HR staff) in finding an acceptable resolution to the dispute.
Often, informal methods are used in conjuction with more formal methods.
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6. 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.
Peer review is one type of ADR process that taps into the willingness or desire of employees to participate in a dispute resolution process in which their peers or co-workers have input into or control over the outcomes.
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7. The process is somewhat formal: Specific issue/complaint.
Peer Review
The process is somewhat formal:
Specific issue/complaint.
Meeting with peers.
Anticipated benefits:
Peers more objective.
Results more acceptable.
Typically, an employee with a complaint will meet with a group of coworkers who have been designated as the peer review panel or committee. The peer reviewers listen to the employee’s complaint and make a recommendation or decision. Often, employees see this as a more objective process than just talking to the boss, since these are their co-workers with similar interests and concerns.
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8. 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.
There are also formal grievance or complaint procedures. These can be available to employees who are covered by a collective bargaining agreement or to non-union employees where the employer provides such a procedure.
They may be either binding or not. The outcome of grievance procedures in a union workplace is a decision that is binding to both the union and employer.
Many employers are trying to adopt binding procedures that require non-union employees to submit their complaints to a grievance procedure before they go to court and file a lawsuit. In some cases, courts have upheld provisions that require non-union employees to submit their claims to this type of procedure. A key issue is whether the employee agrees to submit claims to the procedure before they are hired or after the complaint has arisen. Courts are reluctant to require non-union employees to submit complaints to binding complaint procedures. A carefully drafted procedure, though, can be upheld.
Sometimes, employees feel better just knowing they have someplace to go with their complaints. They might not get what they want but if there is a fair process that enables them to voice their complaints and they are treated with respect and dignity during the process, the employer is less likely to have problems in the future.
Source:
Posthuma, R. A., Dworkin, J. B., & Swift, M. S. (2000). Arbitrator acceptability: Does justice matter? Industrial Relations, 39,
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9. An in-house staff person Usually outside the normal chain of command
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 arbitrator.
An ombudsman is a person whose job in the organization is to resolve complaints through a combination of negotiation and mediation techniques. Since they are usually outside the ordinary chain of command, they must often use informal pressures to get the parties to settle their dispute. Sometimes, however, they are given significant authority by the organization to rectify wrongs to keep employees from going outside the organization.
One of the key advantages of having an ombudsman in the organization is that the employees know that there is someone that they can go to inside the organization to resolve their problems. This might be a problem with a supervisor, a problem regarding sexual harassment, etc.
Thus, it is important that the ombudsman has some power and/or authority to actually address the employee’s concerns. The ombudsman is not merely a mediator who tries to get people to voluntarily agree to resolve their dispute.
Many companies have adopted ombudsman programs to comply with the requirements of Sarbanes-Oxley Act of That statute requires companies to provide mechanisms for reporting corporate misdeeds.
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10. Mediator tactics push employer and employee(s) to voluntarily agree.
Mediation
Third party
Mediator
Informal
Mediator tactics push employer and employee(s) to voluntarily agree.
May be a necessary step before arbitration.
Mediators are people who try to help others voluntarily reach an agreement. There can be formal mediation programs where there is a designated mediator, but often people play the role of mediator by simply helping others settle their disputes. Mediators do not have the authority to impose an outcome on either party; rather, they must use their skills to induce the parties to reach an agreement voluntarily.
Mediation is sometimes a required step in a more formal dispute resolution process. The mediator is given the opportunity to help the parties resolve their dispute before a more formal procedure (like arbitration or litigation) is invoked.
Mediators are usually expected to have at least a bachelor’s degree and significant training in resolving disputes through mediation. Mediators are often attorneys, retired judges or experts in a particular field. They may have worked as human resource managers or union representatives. However, their success depends on remaining neutral during the mediation process .
Source:
Raisfeld, R. D. (2007). How Mediation Works: A Guide to Effective Use of ADR. Employee Relations Law Journal, 33,
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11. Effective mediation tactics: Pressure Process Friendliness
Avoid negative emotions
Discuss alternatives
The things that the mediator does to help the parties to reach an agreement can be called tactics. Several different types of tactics have been shown to be effective. For example, sometimes mediators pressure the parties to reach an agreement. Other times, they are friendly to the parties. The effectiveness of different tactics depends on the skill of the mediator. Good mediators know when to use which tactics.
Posthuma, R. A., Dworkin, J. B., Swift, M. S. (2002). Mediator Tactics and Sources of Conflict: Facilitating and Inhibiting Effects. Industrial Relations, 41,
The things that the mediator does to help the parties to reach an agreement can be called “tactics”. Several different types of tactics have been shown to be effective. For example, sometimes mediators pressure the parties to reach an agreement. Other times, they are friendly to the parties. The effectiveness of different tactics depends on the skill of the mediator. Good mediators know when to use which tactics.
Posthuma, R. A., Dworkin, J. B., & Swift, M. S. (2002). Mediator Tactics and Sources of Conflict: Facilitating and Inhibiting Effects. Industrial Relations, 41,
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12. Semi-formal, trial-like hearing.
Arbitration
Third party
Arbitrator
Semi-formal, trial-like hearing.
Arbitrator’s decision is binding on the employer and employee(s).
Arbitrators are third parties who do not have any stake in the negotiation process. They are expected to be neutral and fair. They act like judges in that they listen to both sides and then issue a ruling that is binding on both parties.
Posthuma, R. A., Dworkin, J. B., & Swift, M. S. (2000). Arbitrator acceptability: Does justice matter? Industrial Relations, 39,
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13. 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.
There are several different settings in which arbitration occurs in the workplace: grievance arbitration, employment arbitration and interest arbitration. The arbitration type depends on whether there is a union involved and whether the dispute involves a current contract or policy (grievance and employment) or the terms of a new contract (interest).
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14. Employment Arbitration
Arbitration arises out of an agreement between employer and employee.
Issues:
Valid waiver of right to sue.
Protection of statutory rights.
Arbitration is a more formal dispute resolution process in which a person acts like a judge, conducts a sort of hearing and then issues a decision that is binding to both parties.
Many employers have been adopting procedures that require non-union employees to submit to arbitration before they go to court. In some cases, this requirement has been upheld. This may occur when the employee signs an arbitration agreement at the time they are hired and subsequently decides that they want to sue their employer. Key issues that courts will decide in the future is to what extent the employee’s waiver of the right to sue is valid, since generally employees cannot be required to waive statutory rights as a condition of employment.
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15. Employment Arbitration
Validity of Waiver:
Statutory authority (FAA, Title VII, etc.); Circuit City v. Adams
Pre-dispute
Voluntary
Knowing
“May” arbitrate versus “must” arbitrate
The Circuit City case is a classic example of a situation in which the U.S. Supreme Court upheld the employer’s requirement that the employee go to arbitration before they go to court [Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001)]. Circuit City is an electronics retailer that required its employees to sign an agreement before they were hired in which they promised to take all employment disputes to arbitration before they filed a lawsuit. The Supreme Court‘s ruling upheld the requirement of arbitration.
Nevertheless, arbitration agreements may not be so one-sided that the employee does not have a fair chance to present their case and win [Hooters of America Inc. v. Phillips, 173 F3d 933 (4th Cir., 1999)].
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16. 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?
Coleman, C. J., & Haynes, T. T. (Eds.) (1994). Labor Arbitration Annotated Bibliography. Ithaca, NY: ILR Press.
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17. 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.
Employers can often avoid costly litigation by requiring their employees to submit complaints to arbitration.
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18. Best ADR Policies High User-Friendliness Low Low High
The best ADR policies are those that are both easy to use (high in user-friendliness) and legally enforceable.
Low High
Legal Enforceability
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19. There are many types of in-house ADR programs.
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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