Originally from Dispute Resolution Journal

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I. INTRODUCTION TO ALTERNATIVE DISPUTE
RESOLUTION

The rising use of alternative dispute resolution (ADR) processes is
a trend that many are becoming more familiar with as an integral part
of company proceedings. At a time when union density was high,
non-union workplaces moved to create practices comparable to
collective bargaining agreement grievance procedures in order to
avoid the risk of a unionizing effort.1 Today, ADR procedures are
used for a variety of reasons. A study in 2011 showed that 97% of
fortune 1000 companies used mediation, a non-binding form of
conflict resolution, in their ADR process and 83% used arbitration, a
binding form of conflict resolution, somewhere in their process.
These numbers have risen from 85% and 80% in 1997 respectively,
showing a trend of increasing use of ADR processes.2 Although we
see a substantial move toward adopting these procedures, there is still
some hesitation. The most critical question at the center of this
debate, and the one to answer today, is whether or not an in-house
ADR arbitration process is capable of providing justice to employees.
Although arbitration makes many compromises when compared to
litigation, it is a process that is more accessible and therefore is able
to deliver a different kind of result.

An employer promulgated ADR process, as opposed to a collective
bargaining grievance procedure, raises the concern that one of the two
parties will have an unfair advantage throughout the process. As these
agreements are often created solely by employers, there is an inherent
problem of justice. However, concerns about having an entirely fair
process often prevent any process from being implemented at all; any
benefits are missed entirely. The costs of not managing these conflicts
include significantly higher risk of exposure to litigation and
increased costs, the manifestation of stress which leads to higher
turnover and more instances of burnouts, an obstruction of
communication leading to diminished products and increased
expenditure of time, reduced job satisfaction, and general expenditure
of time on the resolution of conflict by someone who is not trained or
experienced. Adopting an ADR policy is a practical way to specialize
conflict—using those trained in resolving conflict to efficiently
address the issue instead of possible later dismissals, or more likely,
legal counsel.

The benefits of using a dispute resolution procedure (alternative
and preemptive to litigation) are important to consider and are the
reason that so many companies are embracing the practice of
resolving disputes on their own term before they reach the expensive,
risky, and lengthy litigation process. Benefits experienced by
appropriately managing can conflict include a lower exposure to risk,
higher commitment and job satisfaction, and the eventual adoption of
a cultural acceptance of the inevitability of conflict to arise within the
workplace. Being comfortable and confident with conflict can
stimulate the creative process, drive innovation, and demonstrate twoway
commitment between management and employees. Having an
effective process means the benefits outweigh the costs, and there are
many elements to consider when choosing to create an in-house
process.