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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 © SHRM
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. © SHRM
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. © SHRM
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. © SHRM
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. © SHRM
Peer Review The process is somewhat formal: >Specific issue/complaint. >Meeting with peers. Anticipated benefits: >Peers more objective. >Results more acceptable. © SHRM
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. © SHRM
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. © SHRM
Mediation Third party > Mediator Informal Mediator tactics push employer and employee(s) to voluntarily agree. May be a necessary step before arbitration. © SHRM
Mediation Effective mediation tactics: Pressure Process Friendliness Avoid negative emotions Discuss alternatives © SHRM
Arbitration Third party > Arbitrator Semi-formal, trial-like hearing. Arbitrator’s decision is binding on the employer and employee(s). © SHRM
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. © SHRM
Employment Arbitration Arbitration arises out of an agreement between employer and employee. Issues: > Valid waiver of right to sue. > Protection of statutory rights. © SHRM
Employment Arbitration Validity of Waiver: Statutory authority (FAA, Title VII, etc.); Circuit City v. Adams Pre-dispute Voluntary Knowing “May” arbitrate versus “must” arbitrate © SHRM
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? © SHRM
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. © SHRM
Best ADR Policies High User- Friendliness Low Low High Legal Enforceability © SHRM
Summary There are many types of in-house ADR programs. An effective policy may reduce litigation costs. Policies should be fair and legal. © SHRM
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