Alternative Dispute Resolution Methods

Introduction

It is now commonplace to use Alternative Dispute Resolution (ADR) to resolve employment disputes, including discrimination cases arising under Title VII, the ADEA, and state and local legislation. Employment agreements frequently contain mandatory arbitration provisions that are legally binding and enforceable. In addition, virtually every court or administrative agency empowered to hear discrimination cases now requires mediation as part of the formal adjudication process (Spangler, 2003) . After explaining briefly these ADR techniques, it is the purpose of this paper to discuss their relative advantages and disadvantages in comparison with traditional litigation.

Discussion

There is a wide range of ADR techniques available to assist in resolving issues in controversy relating to workplace conflict. These include negotiation, facilitation (i.e., facilitative mediation), evaluative mediation (neutral evaluation and the "settlement judge" approach), fact-finding, mini-trials, summary trials with binding decision, arbitration, and the use of ombuds, as well as mix of these techniques (The U.S. Equal Employment Opportunity Commission, 2002).

Mediation

Mediation is almost always a required procedure built into the litigation process to divert cases away from the court and voluntarily selected by the parties to secure a prompt and cost-effective resolution of an employment dispute (Baker and Ali, 2002). Either way, the parties appear before a neutral third party who is commonly a lawyer familiar with employment law and/or litigation. The parties meet initially to discuss ground rules and to sign a mediation agreement that invariably contains a provision making strictly confidential all matters and proposals discussed in mediation. During the initial session, the mediator often asks each party to discuss the merits of the case as well as potential settlement alternatives. The mediator talks separately and privately with each of the parties in order to explore in depth settlement alternatives. The mediator may repeat this process several times with or without further common sessions until an acceptable resolution of the controversy is reached. Mediation plays a useful role whenever the parties prefer settlement to protracted litigation and, better yet, allows the parties to devise a solution that suits their particular needs without the limitations imposed by the legal process (Baker and Ali, 2002) .

Arbitration

Arbitration is often required by legally binding provisions contained in employment contracts or regulatory requirements that are enforceable against the employee (e.g., dispute resolution rules that apply to brokerage and employment disputes in the securities industry). Once again, the arbitrator is commonly a certified neutral third party, but also may be a retired judge or law professor. This private judge is commonly familiar with employment law and/or litigation. Arbitration proceedings are modeled after court proceedings, but they are generally more streamlined and informal. As a result of recent judicial precedent, the process must afford the employee the same fundamental right that he or she would be entitled to receive if the matter had gone to court in the first place. These protections include requiring the employer to pay for virtually all of arbitration costs, including the arbitrators, when mandated by contract or regulatory provision. One key difference is that the parties a mutually select a private judge to hear the dispute, and this individual is only required to issue a brief opinion in the form of an arbitration award at the end of the proceeding. By statute in every jurisdiction, there are summary procedures for enforcement of the arbitration award. Once confirmed, the same court can enforce the arbitration award against the non-complying party in the same manner as any other court order (Rosenblatt, 2006) .

Department of Labor Pilot Test

In the 1990's, the Department of Labor undertook a pilot project to test the cost effectiveness, timeliness, and general usefulness of ADR methods versus traditional methods of trial. A comparison of non-ADR and ADR cases showed that, in general, the average cost of an ADR case was less than the average cost of a non-ADR case. The estimated cost savings through the use of ADR range from $223 to $659 per case (Reich, 1994) .

According to the data collected, the average duration of an ADR case was lower than the average duration of a non-ADR case. Four methods of comparison showed that the duration of an ADR case was between two and six months shorter than the duration of a non-ADR case. A regression analysis and a survey of participants also supported the conclusion that, in general, the use of ADR tended to reduce the duration of a case (Reich, 1994).

The analysis of settlements produced inconsistent results. The four methods of calculated comparisons demonstrate that ADR cases, on average, resulted in higher settlements. By contrast, the regression analysis predicted that settlements from the ADR cases were lower than would have been realized if ADR had not been used. Of the survey respondents, a majority believed that the outcome would have been about the same with or without the use of ADR (Reich, 1994).

The majority of the private attorneys who responded to a follow-up survey were comfortable with the use of in-house mediators and the process of mediation. In general, they believed that they saved resources and resolved the cases more quickly through the ADR program (Reich, 1994) .

A Recent ADR Study

In late 2002, the Dispute Resolution Journal published and article concerning a laboratory study, in which graduate business students "acted as parties to simulated disputes and went through six different ADR processes, which they then evaluated according to level of satisfaction" (Cohen, C.E., & Cohen, M.E., 2002) . Although this simulated study had several limitations, the results supported the theory that control over the process and outcome is quite relevant to satisfaction with ADR.

According to Cohen and Cohen, "the processes in which the student subjects had the most control over both the process and the outcome (i.e., negotiation, mediation and med-arb) were rated higher than the processes in which control was in the hands of a third party (i.e., peer review and arbitration)" (2002). The authors also pointed out the fact that the med-arb exercise was rated higher than the mediation excercise. An explanation of this may be due to the fact that "med-arb allows the parties the opportunity to settle their dispute, while still providing