Alternative Dispute Resolution

Scope

Parties involved in a dispute, such as an employer and employee, may work towards a voluntary, consensual agreement, as opposed to having a judge or other authority decide the case.

Regulatory citations

• None

Key definitions

• Alternative Dispute Resolution (ADR): Any procedure, agreed to by the parties of a dispute, in which they call upon the services of a neutral party to assist them in reaching agreement and thus avoid litigation. Types of ADR include:
  • Arbitration
  • Mediation
  • Convening
  • Facilitation
• Arbitration: A process in which each party presents its case, usually at a hearing conducted by a neutral or panel of neutrals who hear the facts and arguments presented by each side, and render a decision in light of relevant laws and procedures. Normally, such decisions are binding and may be enforced in court although the parties may agree to non-binding arbitration.
• Mediation: A process in which a neutral third party (the mediator) assists disputants in reaching a mutually satisfying settlement of their differences.
  • Mediation is voluntary, informal, and confidential. The mediator helps the disputants to communicate clearly, to listen carefully, and to consider creative ways for reaching resolution.
  • The mediator makes no judgments about the people or the conflict, and issues no decision. Any agreement that is reached must satisfy all the disputants.
  • Some agencies, such as the EEOC, offer mediation as a way to give parties the opportunity to discuss issues raised in charges, clear up misunderstandings, determine the underlying interests or concerns, find areas of agreement and, ultimately, to incorporate those areas of agreements into resolutions.
• Convening: The use of a neutral third party to help assess the causes of the conflict, to identify the persons or entities that would be affected by the outcome of the conflict, and to help these parties consider the best way (for example, mediation, consensus-building, or a lawsuit) for them to deal with the conflict. The convener may also help get the parties ready for participation in a dispute resolution process by providing education to the parties on what the selected process will be like.
• Facilitation: A process used to help a group of people or parties have constructive discussions about complex, or potentially controversial issues. The facilitator provides assistance by helping the parties set ground rules for these discussions, promoting effective communication, eliciting creative options, and keeping the group focused and on track. Facilitation can be used even where parties have not yet agreed to attempt to resolve a conflict.

Summary of requirements

With one exception (binding arbitration) the goal of ADR is to provide a forum for the parties of a dispute themselves to work towards a voluntary, consensual agreement, as opposed to having a judge or other authority decide the case.

In addition to serving as a potential means of avoiding the expense, delay, and uncertainty associated with traditional litigation, ADR also is intended as a vehicle for improving communication between the parties.

Employer-mandated arbitration. When alloed by state law, employers may require employees to agree to resolve all or certain types of employment disputes through arbitration rather than litigation. If properly crafted, such agreements are enforceable in many situations. Drafting enforceable agreements requires some knowledge of the judicial decisions in your region, so you should consult a knowledgeable attorney. Key issues involve the mutuality of the obligation to arbitrate and the reasonableness of any restrictions as to damages, time limitations, and procedures. Such an agreement will not preclude an agency such as the EEOC from bringing an action on its own initiative.

Department of Labor view of ADR. The Department of Labor has experimented with ADR in a number of areas. DOL has published regulations that provide for alternative “settlement judge” proceedings before the Office of Administrative Law Judges. The EEOC is using mediation pilot programs to increase voluntary resolutions.

The vast majority of disputes in which DOL is a party cover allegations of labor standards violations (principally OSHA, Wage-Hour, Office of Federal Contract Compliance Programs, and MSHA). Historically, many cases are settled without going to a court or ALJ—either by administrative settlement with the program agency or through subsequent negotiations with the solicitor’s office. However, many of these cases take years to resolve (during which time the violation may be continuing) and require resources (follow-up investigations, discovery, depositions) that otherwise could be spent on cases that can only be resolved by a court.

In 1992, DOL conducted a pilot test in the Philadelphia Region to determine whether the use of in-house mediators, could speed up the resolution of these cases.

Of 27 cases mediated in the pilot, 22 (81%) were settled, and most were resolved in a single mediation session. The various DOL participants independently concluded that the settlements were at least as good as the likely outcomes of litigation. Some cases were very complex and would have cost DOL and the outside party substantial resources and time to bring to trial. Because of the mix of suitable cases available in the brief duration of the pilot, however, the cases mediated could not represent the full range of DOL programs: One MSHA case was mediated, and the remainder was evenly divided between OSHA and Wage-Hour.

The ADR Act of 1990. In November 1990, Congress passed legislation that authorizes and encourages federal agencies to use alternative dispute resolution techniques to reduce the growth of litigation. In enacting the Administrative Dispute Resolution Act, the Congress expressed concern that traditional forms of proceedings used to resolve disputes between agencies and members of the public have become too formal and lengthy, and asserted that ADR may be, in at least some instances, faster, less contentious, and more economical.

The ADR Act requires federal agencies to appoint a dispute resolution specialist to work with ACUS and the Federal Mediation and Conciliation Service (FMCS) in considering whether, and under what circumstances, ADR techniques may benefit the public and help the agency to fulfill its statutory duties more effectively. Specifically, each agency must develop an ADR policy following an examination of possible uses of ADR in formal and informal adjudication, rulemakings, enforcement actions, the issuance and revocation of licenses or permits, contract administration, litigation brought by or against the agency, and other agency actions.