Co-written by Robert Vyverberg
In the July issue, we discussed the evolution of mandatory alternative dispute resolution (ADR) plans and explained why these plans are so desirable. This article identifies specific guidelines that must be considered before drafting or implementing such a plan.
A Mandatory ADR Plan Should Be Clear and Comprehensive
It is best to have a single document describing everything about the plan. A summary description is also helpful, but it should state that the plan itself controls. If there are separate mediation or arbitration rules, they should be identified and distributed.
Clearly Identify Plan's Scope
In most cases, employers want their mandatory ADR plan to be as broad as possible. The plan should specify the statutory and common law claims covered, as well as the limited types of claims that are not covered.
Afford Employees Same Substantive Rights and Remedies that Are Available in a Court of Law
The plan cannot limit substantive rights or remedies. For example, if employees would be entitled to compensatory and punitive damages from a jury if successful in a federal lawsuit, the same damages should be potentially recoverable in proceedings under the plan.
Preserve Due Process Rights
The plan should clearly describe the process that employees must follow. It should allow for reasonable discovery. Both sides should be allowed representation. Arbitrators should be required to issue written decisions, which will be subject to review under the Federal Arbitration Act or a comparable state statute. Finally, employers should utilize a well-respected organization such as the American Arbitration Association to further ensure fairness. Many such organizations have their own due process protocols, which facilitate the involvement of neutral and knowledgeable third parties.
Claims Filing Period Fair and Reasonable
By far the safest course is to allow employees the same period of time to file claims under a mandatory ADR plan as they would have under the applicable statutes of limitations in federal and state courts and with administrative agencies.
Employers Should Pay Administration Costs
While courts have approved plans that require modest filing fees (e.g., $100), plans that obligate employees to split the costs of plan administration (including mediator and arbitrator fees) have been successfully challenged.
There Must Be Sufficient Consideration Between Employers and Employees