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Mainstreaming Guide (Resource Book for Managing Employment Disputes)

Section III. Model Implementation Tools


This guide enumerates the steps a Company should take to systematize ADR use in managing employment disputes. It addresses the options to consider in structuring the program and the steps to alert, sensitize and encourage all employees to use the processes. A Company should use the guide to select overall ADR options and foster routine use of the eventual program.

Step 1. Does the Employment Litigation Docket Warrant ADR?
Analyze the Company’s employment disputes experience to assess the utility of a systematized approach. Assess direct and indirect costs of employment disputes:
• number of cases and venue (e.g., court, administrative agency)
• types of claims asserted (e.g., discrimination, defamation)
• damage claims asserted
• percentage of cases settled, tried to judgment, dismissed or appealed
• percentage of cases won and lost
• type of judgments awarded (money damage amounts, reinstatement, compensatory damages, punitive damages)
• settlement amounts and point at which settlement occurred in the resolution process
• defense and court costs
• in-house attorney and management time involved
Step 2. Design Option: Will the Company Offer Informal Dispute
Identification and Resolution Facilities?

In light of the experience of many companies that most disputes can be resolved early if detected early and if appropriate tools are brought to bear, consider what competencies the Company has in place, and which skills need to be imported, to enable early detection and consensual resolution. Consult with HR professionals and managers to investigate and select what combination of early detection and intervention systems are best for the Company:• Ombuds office
• Peer review panels
• “800” numbers or other informal complaint processes
• Early HR intervention and counseling
• Formal complaint mechanisms
• “Open Door” policies
• Immediate supervisor review
• Other early resolution systems
Step 3. Design Option: Will the Company Employ Mediation?

(a) Will Mediation Component Be Adopted?
i. Will the Company employ mediation on a voluntary basis that enables both employer and employee to agree to use the process on a case-by-case basis when a dispute arises?

ii. Will the Company propound a system that requires mediation of unresolved disputes prior to arbitration?

iii. Will the Company adopt or amend CPR’s model mediation procedure?
(b) Mediation: What Disputes Are Likely to Be Included and Excluded?
i. What dispute categories would be subject to mediation?
• all employment claims?
• only termination claims?
• claims above a threshold amount of asserted damages?
• status, wages, bonuses and compensation only?
• statutorily regulated claims (e.g., discrimination via sex, race, age, disability, etc.)?
• legally cognizable claims?
• employer’s counterclaims against an employee?
ii. What claims would be excluded from mediation?
• claims under a modest threshold amount?
• worker’s compensation?
• unemployment insurance and ERISA?
• breach of restrictive covenants and non-competition clauses?
• trade-secret disputes?
• intellectual property or misappropriation?
(c) What Start-up Date Will Apply to Mediation Program?
• for new hires
• for existing employees
(d) What Employees Will Be Covered?
• all current employees?
! only non-union employees?
• employees terminated by the Company who assert a claim?
• new hires after a start-up date?
• executives and managers?
• employees at specific geographic locations?
• employees at subsidiaries?
(e) What Type of Employee Submission Agreement Will Be Required When Disputes Arise?

In a voluntary mediation program that employees opt to use when a dispute arises, what type of information should be contained in the submission agreement when the employee decides to use mediation:
• employee voluntarily agrees to use mediation regarding (specify claim) ___________________
• employee specifies the claim and damages sought
• employee has received, read and understood the mediation
procedures and agrees to use, except as expressly modified by the parties
• employee had opportunity to discuss the procedure with counsel or representative of employee’s choice
• employee specifies the name of any representative
• the name of the impartial party-selected mediator is included
• signed by employee, employer and any representatives (See CPR Mediation Submission Agreement which includes these provisions.)
Step 4. Design Option: Will the Company Employ Arbitration?

(a) Will an Arbitration Component Be Adopted?
• Will the Company adopt or amend CPR’s model arbitration procedure?
(b) Will Arbitration Be Voluntary or Mandatory or a Combination thereof?
• voluntary for employer & employee at time dispute arises
• mandatory for employer & employee
• mandatory for employer & employee, but employee not bound by result
(c) What Claims Are Likely to Be Included and Excluded?
• In a voluntary program, what disputes will be listed in the Company policy statement or employee memorandum as likely to be included or excluded?
(d) What Employees Will Be Covered? (See Step 2(d) above.)

(e) Mandatory Arbitration: Will a Pre-Dispute Agreement to Use Arbitration Be Employed?
i. If arbitration will be used on a mandatory basis, will employees be asked to sign a pre-dispute agreement to use the process? Predispute agreements generally require that, in exchange for continued employment, and/or for other consideration, employees will use the program as an exclusive remedy to resolve disputes.
(See two forms of CPR Pre-Dispute Agreement to Abide by Mandatory Arbitration Procedure.)

ii . Will the Company institute the program by including it in a personnel manual or policy statement disseminated to all employees:
• with an employee memo explaining the program
• with an affidavit of service signed by the person who distributes the memo
• with signed acknowledgment of receipt by the employee
iii. Will new hires be requested to sign agreements to use the process?
(f) Mandatory Arbitration: What Legal Consideration, if Any, Will Be
i. In a mandatory arbitration program, an employee’s pre-dispute agreement to use arbitration should recite any required consideration. The legal department should determine whether applicable law requires any particular consideration to assure enforcement. If good, valuable and separate consideration (“sufficient consideration”) is legally required to forego rights to judicial litigation, what will suffice:
• new employment
• continuation of present at will employment immediately after program adoption
• continuation of present at will employment for a specified time period subsequent to program adoption
• provision of salary increase, bonus or participation in incentive program expressly linked to application of arbitration program
ii. To assure employee acceptance, should the employer provide consideration when it is not required by law?
(g) Voluntary Arbitration: What Type of Employee Submission Agreement Will Be Required When Arbitration Is Sought (either after unsuccessful mediation or without any mediation step)? In a voluntary arbitration program that employees and the employer opts to use when a dispute erupts, what type of statement will be required from the employee:
• employee voluntarily agrees to use arbitration as exclusive remedy for a dispute regarding (specify dispute) ________________________

• employee has received, read and understood the arbitration procedures and agrees to their use except as expressly modified by the parties

• employee had opportunity to discuss the procedure with counsel or representative of the employee’s choice

• employee specifies claim and damages

• employee understands agreement is a waiver of statutory or other rights to seek a judicial remedy or governmental administrative agency remedy unless that right is expressly preserved by law

• the name of the arbitrator, if selected
(h) What Start-up Date Will Apply to Arbitration Program?
• for new hires
• for existing employees
• In a mandatory program:
• 90 days after receipt of notice of program for existing employees
• on receipt of notice of program for new hires
Step 5. Will a Pilot Program Be Used to Test ADR Use?

Some companies have successfully utilized pilot programs at a certain location or for a class of employees or disputes to test the ADR options before broader adoption.

Determine whether a pilot program will be used.
i. If so, determine:
• which disputes will be submitted
• which employees will be subject:
• employees at certain locations
• a class of employees
• duration of pilot
ii. If so, determine criteria to track results (See Step 13 below.)
Step 6. Will the Company Involve Constituents in Design?

Will the Company involve constituents who will use the program in planning program options to encourage ownership and tailoring to Company culture such as:
• Human Resources
• counsel
• managers
• employees
• ombuds
• others
If so, prepare presentations to explain rationale, process benefits, drawbacks, options and constituent concerns.

Step 7. Who Must Approve and Finalize Program?
• Senior Management
• General Counsel
• Human Resources
Step 8. Will the Company Appoint an Employment Program ADR Point Person or ADR Counsel?

Will Company appoint a high-level manager/director to oversee and direct the ADR program:
• to develop Company policies, procedures, forms and information booklets
• to communicate policies and explain program in-house and externally
• to articulate guidelines for use in voluntary programs
• to plan and conduct training for employees about the program
• to provide information and counsel to users
• to recommend Company incentives to encourage use
• to track and monitor results
• to consider changes in Company practices to discourage disputes
• to develop ADR clauses for insertion in hiring agreements
Step 9. Will the Company Promulgate a Company Policy Statement on Employment Disputes ADR?

Company Policy Statements on ADR serve to alert management employees to a Company’s serious commitment to employ ADR in the disputes specified.

(a) Will Company Issue a Company Policy Statement about the Adoption of the ADR Program?

(b) To Whom Will the Company Distribute the Company Policy Statement on Mediation and Arbitration:
• all executives
• all managerial personnel
• all Human Resources personnel
• all in-house counsel
• all employees
• opposing counsel when needed.
(c) Will the Policy Statement Be Included in New Hire Materials?

Step 10. Will the Company Distribute an Employee Memo to Explain the Program?

An employee memo sets forth the selected program options in lay terms including employee obligations.

(a) If a Memo Will Be Used, It Should Explain the Program Clearly to
Employees, including:
• the ADR processes selected for the program (e.g., mediation, and/or arbitration (voluntary or mandatory)
• reasons for program and benefits
• summary of ADR processes and steps
• start date of program
• disputes covered and excluded
• costs to employee for each process
• opportunity for participation by counsel or other representative
• person/department to contact to initiate an ADR process or for additional information
• period of time after dispute arises to start an ADR process
• rights that are waived by use of arbitration, if the arbitration option is adopted
• impact on pending or contemplated litigation or agency
investigation via use of mediation or use of arbitration and any exceptions to arbitration finality preserved by law or statutory rights
(b) How Will the Company Circulate This Employee Memo?
• distribute to all current employees including executives and managers
• incorporate in relevant new hiring material
• insert in Company Personnel Manual
• alert attorneys to program
(c) Will Pre-Dispute Agreements to Use Arbitration Be Included in Memo?

If advance pre-dispute employee agreements to use mandatory arbitration will be used, will they be circulated for signature along with copies of the Employee Memo?
• will the Company employee in charge of distribution execute an affidavit of mailing to each affected employee?
• will employees be asked to sign a receipt?
• will employees be afforded time to return the signed agreement?
(CPR recommends 10 days.) (See CPR Pre-Dispute Agreement to
Abide by Mandatory Arbitration Procedure.)

Step 11. Will the Company Engage in an Education Effort to Inform Employees about the Program?
• distribute written notice to employees
• conduct seminars for managers, counsel, etc.
• create a video for repetitive use
• provide employees opportunities to discuss program with Human Resources
• distribute information regarding program success, with statistics on use, cost-savings and time saving (but maintain case confidentiality)
Step 12. What Implementation Steps Will Be Used For Each Dispute?

See checklists below for implementing a mediation, or an arbitration process when a particular dispute arises.

Step 13. Will the Company Evaluate Program Use?

Refinement and sharpening of the program should be expected. To properly evaluate, consider use of a computerized system to track cases and analyze results.

(a) What Criteria Will Be Used to Track Results?
• number of cases eligible for mediation or arbitration
• number of employees who opted for voluntary mediation or arbitration
• number of cases submitted to mediation or arbitration
• number of cases settled in mediation
• duration of mediation sessions
• costs of mediation sessions
• parties’ level of satisfaction with mediation
• number of cases settled after arbitration initiated
• number of arbitrations completed
• win/lose ratio for each process
(b) What Worked and Did Not?

(c) Evaluate Neutrals Used and Sources Providing Neutrals.

(d) Refine Program.