• Alternative Dispute Resolution -- The Basics
  • May 2, 2003 | Authors: Michael W. Hawkins; Trina M. Walton
  • Law Firm: Dinsmore & Shohl LLP - Cincinnati Office
  • In the labor and employment arena, the costs to employers to litigate a single-plaintiff discrimination claim can be mind-boggling. One source estimates that an employer's average cost to litigate a discrimination claim (measured in terms of attorneys fees and incidental costs) is in the neighborhood of $96,000. Aside from the obvious fact that such claims cost employers valuable resources and thousands of dollars, these claims also have monumental intangible costs - such as damage to an employer's reputation and public image; decreased employee morale; and high employee turn-over.

    Alternative Dispute Resolution or ADR, refers to programs that are designed to resolve disputes without resorting to costly and time-consuming court litigation. With ADR programs, both the employer and employee agree to submit their issue to a neutral third party (typically an arbitrator or mediator) for resolution. The use of ADR in the employment context can be an effective way to help offset the rapid increase in employment litigation and the seemingly endless expansion of federal, state and local laws that regulate the workplace. As an alternative to the more traditional routes that can result in years of expensive litigation and/or administrative proceedings, ADR can be an effective tool to quickly and less expensively remedy issues that are addressed by employment laws such as Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), the Employee Retirement Income Security Act (ERISA) and the many and varied state employment laws.

    In-House Mediation as an ADR Program

    It is important that any in-house ADR program an employer chooses to implement is one that will withstand court review. While an employer may be creative in designing an ADR program, in-house mediation is typically an effective method of ADR that results in a "win-win" situation for employers and employees. In-house ADR programs can resolve a vast majority of workplace disputes; thus, the need to resort to litigation is significantly decreased.

    An in-house mediation program involves the use of a neutral third person from within the company, trained in mediation techniques, to help the parties of a workplace dispute, discuss and resolve their differences to reach a mutually agreeable resolution. One of the benefits of an in-house mediation program is the elimination of (or at least a significant reduction in) costly litigation. Additionally, the employer and employee have the added benefit of privacy. With litigation, the potential for public exposure of alleged or actual workplace problems, information and practices is increased when an employment-related dispute is litigated. If disputes are submitted to in-house ADR programs, the likelihood of public exposure is reduced significantly.

    Implementing an Internal Mediation Program

    Proper implementation of and training for an in-house mediation program is essential to its appearance of neutrality and fair operation. If employees do not trust the program, they will be reluctant to submit their disputes to it for resolution. An in-house mediation program obviously must be readily utilized to generate a reduction in employee lawsuits.

    Employers should properly train persons within the company who will help facilitate the mediation program. They should be trained to properly address the types of issues they will be confronted with when workplace disputes are presented to them. Employers should utilize legal counsel and/or ADR organizations that work with employers to implement an effective in-house mediation program.