ADRAlternative 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 atwww.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 • 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 co-presented by Mr. Salvatore and Joy Gaetano, SPHR, SVP Corporate Human Resources, USFilter, at the 2001 SHRM Annual Conference.
Judicial Rulings • 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 • 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) • 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. • 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. • What are the most common ADR procedures? The most common methods of ADR are: • grievance procedure • the use of an internal or external ombudsperson • mediation • arbitration
FAQs (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) • 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. • 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) • 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. • 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>
“Mediation, Arbitration and Alternative Dispute Resolution: What HR Needs to Know”(<Power Point Presentation>)(<Audio Presentation>) Logistics Speaker’s Notes 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) • 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. • 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) • 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. • SLIDE #3: Make sure to mention that the Circuit City case provides the high water mark of legal enforceability of Arbitration Agreements. • 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 non-union 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(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.