Magazine article Management Review

Employment Disputes: Solving Them out of Court

Magazine article Management Review

Employment Disputes: Solving Them out of Court

Article excerpt

In the search for win/win solutions to workplace disputes, companies are turning to alternative dispute resolution methods.

You've seen this scenario before. An employee makes an emotionally charged allegation of discrimination against a supervisor and your company, then adamantly pursues the claim through the EEOC and the courts. Months pass, then years. The company ultimately "prevails," but not before sinking some $300,000 into legal expenses to defend the charges. The case could have been handled in a more appropriate and cost-effective manner.

You've been there, done it. Your company hires a recent college graduate who later claims that an older male employee has sexually harassed her. Upon investigation, you find that other female employees do not believe the man's conduct is sexual harassment; rather, they view him as the "grandfatherly type" who always compliments women on how "nice" they look, but not inappropriately so. Your company doesn't want to risk a lawsuit, so you fire the male employee, who for more than 30 years had been an exemplary and valuable worker. Such drastic measures very likely could have been avoided if dispute resolution methods had been in place.

Resolving employee disputes has always been a challenge, and the task isn't getting any easier in today's workplace. Federal and state laws have expanded the rights afforded to employees, giving them greater opportunities to bring claims against employers. The 1991 Civil Rights Act specifically permits both punitive and compensatory damages for most types of discrimination and grants the right to a jury trial for such claims. Employees enjoy expanded rights regarding age and disability discrimination, health and safety on the job and family and medical leave.

At the same time, employees have become more sophisticated about the types of legal remedies available to them concerning workplace disputes. Together, these two factors have led to a dramatic increase in employment claims in recent years.

As many companies have discovered, litigation is not the key to handling most of these cases. For one thing, companies are likely to spend more on outside attorneys' fees than on awards or settlements. Moreover, traditional litigation commonly polarizes the parties' positions. Even if the company ultimately wins, the benefits to the organization may be few and the harm experienced by the employee (or former employee) may be irreparable.

Fortunately, today's companies don't have to rely on litigation alone to resolve employment disputes. They can use a variety of alternative dispute resolution (ADR) methods that not only effectively resolve workplace disputes but also withstand legal scrutiny. With certain safeguards in place, companies can use ADR programs to devise win/win solutions to workplace disputes that satisfy both the employer and employee, regardless of the outcome.

The use of ADR to resolve employment disputes has strong statutory support. The Civil Rights Act of 1991 specifically encourages the use of ADR methods such as settlement negotiations, conciliation, mediation, mini-trials and arbitration. The Administrative Dispute Resolution Act of 1996 permanently authorizes the use of ADR by federal agencies. And the EEOC has issued a policy statement stating its commitment to ADR in the resolution of employment disputes. Each district office must develop appropriate processes.

The EEOC's growing use of ADR means that companies should be familiar with the processes involved. But even more important, management should design an internal grievance policy to reduce litigation and maintain workable relations with employees. An effective ADR program can diffuse potentially explosive workplace situations, thereby easing employees' need to pursue claims with the EEOC or the courts.

The EEOC requires that the use of ADR be fair, voluntary, neutral, confidential and enforceable. …

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