ADR
Alternative Dispute Resolution
A Toolkit for the HR Professional
compiled by the
Employee and Labor Relations Committee
The Society for Human Resource Management (SHRM) is the world’s largest
association devoted to human resource management. Representing more than
175,000 individual members, the Society's mission is to serve the needs of HR
professionals by providing the most essential and comprehensive resources
available. As an influential voice, the Society's mission is also to advance the
human resource profession to ensure that HR is recognized as an essential partner
in developing and executing organizational strategy. Founded in 1948, SHRM
currently has more than 500 affiliated chapters within the United States and
members in more than 100 countries. Visit SHRM Online at www.shrm.org.
This Toolkit is current as of March 1, 2003, and will be updated annually. The Toolkit
and attached information is intended solely to provide general, summary
information and is not intended as legal advice.
Table of Contents
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Introduction <click here>
Professional Education <click here>
Judicial Rulings <click here>
Legislation <click here>
Resources <click here>
FAQs <click here>
Reference Materials <click here>
Sample Documents <click here>
Appendix (presentation) <click here>
Introduction
Tired of employment litigation and paying
high settlements to avoid costly court
proceedings and jury trials?
Consider
Alternative Dispute Resolution (ADR). ADR
techniques can resolve disputes that arise
in your workplace in a fair and expedient
manner, both for the employee and
employer.
Professional Education
“Mediation, Arbitration and
Alternative Dispute Resolution:
What HR Needs to Know”
(click here for Presentation)
Authored by Paul Salvatore, Esq., partner,
Proskauer Rose LLP, this training program was copresented by Mr. Salvatore and Joy Gaetano, SPHR,
SVP Corporate Human Resources, USFilter, at the
2001 SHRM Annual Conference.
Judicial Rulings
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Circuit City v. Adams
EEOC v. Waffle House
Murray v. UFCW Local 400
In re Halliburton
Legislation
• Federal Arbitration Act
<http://www.ww4.law.cornell.edu/uscode/9
• Other Federal Legislation
<http://www.shrm.org/government>
Resources
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American Arbitration Association
<http://www.adr.org>
CPR Institute for Dispute Resolution
<http://www.cpradr.org>
Judicial Arbitration and Mediation Services
<http://www.jamsadr.com>
Federal Mediation and Conciliation Services
<http://www.fmcs.gov>
Labor Policy Association
<http://www.lpa.org>
Equal Employment Opportunity Council
<http://www.eeoc.gov>
NASD
<http://www.nasdadr.com>
National Labor Relations Board
<http://www.nlrb.gov>
New York Stock Exchange
<http://www.nyse.com/arbitration>
Securities Exchange Commission
<http://www.sec.gov>
FAQs
(1 of 4)
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What is ADR? ADR stands for Alternative Dispute Resolution and refers to
procedures for settling disputes by means other than litigation. Such
procedures are usually less costly and more efficient than litigation. In the
employment context ADR is utilized by an employee knowingly entering
into an agreement with his/her company to resolve current or future
conflicts that arise in the workplace through one of or a combination of
ADR procedures.
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What is the purpose of ADR? The purpose of ADR is to resolve conflict in
a more cost-effective and expedited manner while fostering long term
relationships.
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What are the most common ADR procedures?
methods of ADR are:
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grievance procedure
the use of an internal or external ombudsperson
mediation
arbitration
The most common
FAQs
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(2 of 4)
What is an ombudsperson? An ombudsperson is an internal or
external professional in the field of employment matters who
employees may address with grievances regarding employment
issues.
An ombudsman should be perceived by both the
employee and employer as being able to objectively weigh the
facts of a conflict and offer ideas to resolve it.
The
recommendations of an ombudsperson are non-binding. An
example of an internal ombudsperson is an HR representative
within the company who may or may not be regularly assigned to
the employee’s business unit.
An example of an external
ombudsperson is an outside expert in the field of employee
relations, such as a consultant or an attorney, who may regularly
advise the company and employees in these types of matters.
FAQs
(3 of 4)
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What is mediation? Mediation is basically negotiations carried out
with the assistance of a neutral third party. Generally, a mediator
will have had extensive related experience in labor negotiations or
in the field of law, and will be trained and experienced in employee
conflicts that arise in the workplace. The recommendations of a
mediator are non-binding.
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What is arbitration? Arbitration is a process in which an outside
neutral (arbitrator) renders a decision after hearing the arguments
and evidence of both the employee and the company. This
decision is binding between the parties. An employee must either
agree to accept binding arbitration as a condition of employment
well in advance of any anticipated conflict, or agree to resolve
specific existing disputes by way of arbitration. It is highly
recommended, if possible, that binding arbitration be a
consideration of employment by any employee of a company at
the time of he/she has received an offer of employment.
FAQs
(4 of 4)
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Why should I know about ADR? As an HR practitioner, it is
important that you are aware of ADR as a practical and fair
alternative that can help supplement your current grievance
procedures and decrease your organization’s litigation costs.
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Who is the target audience to learn about ADR? Within your
company, your management team should understand the concept
of ADR and consider whether it is a practical solution for your
workplace. If you are a SHRM chapter member, you may want to
share this information with fellow chapter members to develop
their professional understanding of the concept of ADR.
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How Common is ADR? The concept of ADR is very common in
union settings. Due to the high costs of increased litigation and
regulation, it is becoming more commonplace in non-union
settings.
Reference Materials
(1 of 2)
• SHRM Amicus Brief <click here>
• “This is the Year that will Decide the
Future of Arbitration”, Paul Salvatore, Esq.
and John F. Fullerton III, Esq., Corporate
Counsel, February 2001 <click here>
• “Mediation and Arbitration of Employment
Law Claims”, Paul Salvatore, Esq., SHRM
White Paper, April 2001 <click here>
• “Workplace Arbitration Agreements
Enforceable, Supreme Court Rules”,
Margaret Clark, SHRM HR News, March
2001 <click here>
Reference Materials
(2 of 2)
• “Committee Educates Members on
Alternative Dispute Resolution,” Joy
Gaetano and Paul Salvatore, SHRM
Committee Corner, February 28, 2003
<click here>
Sample Documents
• Sample Mediation and Arbitration
Agreement <click here>
Appendix
“Mediation, Arbitration and
Alternative Dispute Resolution:
What HR Needs to Know”
(<Power Point Presentation>) (<Audio Presentation>)
Speaker’s Notes
Logistics
The concept and practice of Alternative Dispute Resolution
(ADR) is complex, and this presentation is primarily designed to
provide an overview for the HR practitioner.
If you are
considering ADR for your company, it is recommended that you
consult with your employment legal counsel. If you would like
to present this material within your company or to fellow HR
practitioners, please contact a member of the SHRM Employee
and Labor Relations Committee <link to Committee Contacts
web page in the Toolkit>.
Speaker’s Notes - Power
Point
• General Information
<click here for
Speaker’s Notes: General Information web
page in the Toolkit>
• Logistics
<click here for Speaker’s
Notes: Logistics web page in the Toolkit>
• Accompanying text
<click here for
Speaker’s Notes: Accompanying Text web
page in the Toolkit>
Speaker’s Notes: General
Information (1 of 2)
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What is the purpose of ADR?
The purpose of ADR is to offer a more cost-effective and
streamlined approach to resolving employee conflicts in the
workplace.
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Why should I know about ADR?
As an HR practitioner, it is important that you are aware of ADR as
a practical and fair alternative that can help supplement your
current grievance procedures, and decrease your organization’s
litigation costs.
•
Who is the target audience to learn about ADR?
Within your company, your management team should understand
the concept of ADR and consider whether it is a practical solution
for your workplace. If you are a SHRM chapter member, you may
want to share this information with fellow chapter members to
develop their professional understanding of the concept of ADR.
Speaker’s Notes: General
Information (2 of 2)
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Can I use the presentation in this Toolkit to train others?
You are welcome to share the information contained in this
presentation with your company’s management team or fellow
SHRM chapter members. We recommend that you consult your
company’s employment counsel or a member of the SHRM
Employee and Labor Relations Committee <link to Committee
Contacts in the Toolkit> for assistance.
How can I best set up a training session? Refer to the
Logistics section in this Toolkit <link to Logistics in the Toolkit>.
Speaker’s Notes: Logistics
• This Power Point presentation is ideal for group
learning,
whether
an
in-person
meeting,
teleconference, including electronic meeting place,
or videoconference.
• It is recommended that you read the accompanying
text Speaker’s Notes <click here> to further clarify
your understanding of the concepts, analyses or
practices that are detailed in this presentation.
• The audio version of this presentation is available
on the CD-ROM of the 2001 SHRM Annual
Conference in San Francisco, California that is on
sale via the SHRM Store <click here for SHRM
Store>.
Speaker’s Notes:
Accompanying Text
(1 of 3)
If you choose to give this presentation on your own you should make sure to incorporate
the provided Power Point presentation, and consider including the following important
points in your discussion.
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SLIDE #3: Make sure to mention that the Circuit City case provides the high
water mark of legal enforceability of Arbitration Agreements.
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SLIDE #6: When discussing internal mechanisms, especially joint
management-employee “problem review boards” and peer review boards,
advise the audience of possible Electromation issues under the Nation Labor
Relations Act. Section 8(a)(2) of the NLRA prohibits company domination of or
interference with any labor organization. In Electromation,309 NLRB 990
(1992), the Board declared unlawful employee committees established in a nonunion settings to address issues relating to various terms and conditions of
employment. In order to avoid Electromation problems in a non-union setting
(in a union setting the union must approve the processes that deal with the
resolution of grievances) it should be made clear that no one is acting as a
representative of any employees, do not formalize any employee committees,
limit the decisional authority of any committee, and do not allow committees to
make proposals to a management on behalf of the employees. This is by no
means an exhaustive explanation and Electromation issues and such issues
should be carefully analyzed.
Speaker’s Notes:
Accompanying Text
(2 of 3)
• SLIDE #8: When discussing mediation you may want to
point out that mediation has an approximate 90% success
rate.
• SLIDE #14: When discussing the advantages of using ADR,
the avoidance of jury trials, it is important to explain that
the 1991 Civil Rights Act expands the remedies available
under Title VII by providing for jury trials, and
compensatory and punitive damages for intentional acts.
This remedial scheme greatly increases the risks of
litigation. Also, discuss the costs of litigation even if you
win. An ADR program is an invaluable method to avoid the
risks and costs of litigation.
Speaker’s Notes:
Accompanying Text
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(3 of 3)
SLIDE #19: When discussing the disadvantages of ADR – the risk
that a mediator or arbitrator will “split the baby” is not a major
concern in labor disputes. Since the arbitrators and mediators are
Employment Law experts they do not feel the pressure to “split
the baby” as much as other neutrals.
SLIDE #29: In the section entitled Drafting Enforceable ADR
Policies / Agreements, Provide Due Process, be sure inform the
audience to carefully consider paying the arbitrator fees and
expenses. Some courts require this, and it is probably advisable
to play it safe and fully pay for the procedure rather than making
the employee split the costs.
Finally make sure to take questions at the end of the presentation.