Guide to Alternative Dispute Resolution (ADR)

Guide to Alternative Dispute Resolution (ADR)

Did you know that you can resolve an employment dispute with an employer without filing a lawsuit? Alternative Dispute Resolution (ADR) is a collective term for methods of resolving a dispute without litigation. Common methods of ADR are mediation, arbitration, and negotiation. 

The process of ADR can result in a continuing amicable relationship between you and an employer after a dispute is resolved. This blog post will provide a rundown of ADR processes, and their benefits and downsides. 

What Is Alternative Dispute Resolution (ADR)?

ADR is a collective term for practices of dispute resolution besides litigation. Examples of ADR practices are mediation, arbitration, and negotiation. In mediation, a third party facilitates discussions between the disputing parties until they reach a mutually beneficial solution. However, in arbitration, an arbitrator oversees the arguments and evidence from disputing parties and decides the outcome of the dispute. Finally, in negotiation, there is no neutral third party. 

What Is the Pre-Litigation Process?

Pre-litigation is any process that occurs before filing the official lawsuit. The pre-litigation process typically includes:

  • Pre-litigation letter: Sent to the defendant’s attorney before launching an investigation. 
  • Investigation: Your attorney collects evidence and speaks to witnesses to collect statements.
  • Demand letter: Sent to the employer to demand payment in exchange for an agreement not to sue.

Before a case is formally filed, we will seek to engage your employer or former employer in any ADR process (usually mediation) to see if they can resolve the employment claim.

Many employers seek to resolve the issue before the case is filed, especially if they have questionable conduct, or condone actions such as workplace discrimination. Some clients also prefer settling their cases during the pre-litigation stage.

Mediation

Mediation is an informal type of ADR where a neutral third party, the mediator, facilitates discussion between disputing parties until they reach a mutual agreement. It is a voluntary process, although sometimes, the courts may order disputing parties to resolve disputes through mediation. 

For an employment law dispute, disputing parties should select a mediator with expertise in relevant employment laws. The role of the mediator is to facilitate information exchange and negotiations. The mediator may also offer solutions but does not make a final decision for the parties. Usually, the mediator facilitates the process by selecting a venue, choosing participants, the medium for interaction, and the payment to the mediator. 

Notably, participation in mediation is voluntary unless mandated by the courts or a contractual agreement. After both parties resolve the employment dispute, the mediator helps draft the final settlement. Mediation can be binding or non-binding, depending on the jurisdiction. Unfortunately, if parties do not settle, the dispute may proceed to court. 

Pros 

  • Confidentiality of the dispute 
  • Disputing parties can participate in the settlement 
  • Focuses on resolving the dispute rather than establishing the at-fault party 
  • Inexpensive compared to litigation. Parties can resolve disputes at an early stage and avoid costly attorney fees
  • Parties can enjoy flexible solutions such as non-monetary relief such as policy changes or better insurance benefits 
  • Procedurally simpler than litigation 
  • Prompt, hands-on, and short term
  • The preservation of the relationship between the disputing parties 

Cons

  • A person cannot be compelled to participate in mediation unless the courts order it 
  • The party with authority (employer) may refuse to negotiate 
  • Private proceedings take away the social points of the dispute
  • If either party has a fixed position, mediation may not work 
  • Mediation is not legally binding, which means parties can choose litigation 

Arbitration

Arbitration is an ADR process where an independent third party, the arbitrator or a tribunal, oversees a hearing and makes a final, binding decision. The disputing parties give up their powers to the arbitrator to find a suitable solution for the employment law dispute. Usually, the parties or an external body such as the courts appoints the arbitrator(s). 

After choosing an arbitrator, the parties work with the arbitrator to choose a suitable date for the hearing. During the proceedings, the arbitrator listens to each party, sees the evidence, and asks the parties and witnesses questions. 

After hearing both sides of the argument, the arbitrator settles on a decision and puts it in writing. Unlike mediation, the arbitrator’s decision is binding, which means parties are expected to obey the decision. 

Pros

  • It offers flexible procedures. The defendant and plaintiff can choose the rules they want to use in their hearing 
  • Both parties have a role in selecting a neutral arbitrator 
  • Those involved can select a neutral location for the hearing 
  • Proceedings are private. This is conducive for parties that want to keep disputes out of the public domain
  • The awards are binding and enforceable 
  • All settlements are final, which helps parties avoid court appeals.

Cons

  • It is contractual, one party can force another into arbitration proceedings 
  • The process eliminates the presence of a jury and leaves the decision in the hands of the arbitrator(s)
  • All decisions are binding, which means parties give up their right to an appeal
  • It’s not a formal process which means the arbitrators can follow unconventional rules and make unpredictable decisions 

Negotiation

Negotiation is another common ADR procedure where parties attempt to resolve the dispute through communication. It’s a voluntary process, and both parties are free to withdraw from the discussions and reject the outcome. Negotiation differs from mediation and arbitration in that it does not involve an adjudicating third-party. The process is informal, meaning parties are free to adopt rules and select a venue, location, and subject matter. Negotiation can also occur publicly or privately.

Pros

  • Flexibility: Disputing parties are free to shape the agenda, location, and representatives for the discussions. However, all participants should be consulted to prevent a power imbalance in the bargaining process
  • Voluntary: Parties are free to choose whether they’ll participate or not 
  • Doesn’t require a third party
  • Costs less time and money than litigation 

Cons

  • Since the process doesn’t include a third party, it may be challenging for those involved to reach an agreement 
  • Parties can withdraw from negotiations at any point of the discussions despite the time, money and effort poured into the negotiations 
  • The absence of a third party may open room for manipulation by one party 
  • There is no guarantee of good faith by either of the parties 

Ask Your Attorney to Help With ADR for Employment Law Disputes 

Alternative dispute resolution (ADR) is suitable for resolving employment law disputes without litigation. ADR processes share a common objective, to solve disputes in less time, with less emotional turmoil and less cost. 

They offer effective and efficient alternatives to litigation and significantly save time, money, can be conducted anywhere and help parties restore work relationships. If you have an employment dispute with an employer, consult your attorney on suitable ADR processes to resolve the problem. 
If you’d like to get help with ADR for your employment law dispute, get in touch with us today to schedule a consultation. Our team of experienced lawyers will help you understand all your options and help you make a decision that suits you best.

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