Resolving Employment Disputes:
A Practical Guide

Current Publication date: June 16, 1997

Introduction
This handbook has been prepared by the American Arbitration Association to guide employers in the responsible development of alternative dispute resolution (ADR) procedures to resolve workplace disputes.

As a more effective option to traditional litigation, an increasing number of employers and employees are using ADR for resolving disputes in the non-union workplace. A wide range of dispute prevention and resolution procedures allow employers to offer employees a fair, cost-effective and private forum to resolve workplace disputes.

Due process safeguards are critical to any employment dispute resolution program because they ensure a fair and equitable forum for both employee and employer.
Role of the American Arbitration Association

The American Arbitration Association, founded in 1926, is a not-for-profit, public service organization dedicated to the resolution of disputes through mediation, arbitration, elections and other voluntary dispute resolution procedures. Over 3,000,000 workers are now covered by employment ADR plans administered by the AAA.

In addition, the AAA provides education and training, specialized publications, and research on all forms of dispute settlement. With 38 offices nationwide and cooperative agreements with arbitral institutions in 52 other nations, the American Arbitration Association is the nation''s largest private provider of ADR services.

The Use of ADR to Resolve Employment Disputes
Federal and state laws reflecting societal intolerance for certain workplace conduct, as well as court decisions interpreting and applying those statutes, have redefined responsible corporate practice and employee relations. Increasingly, employers and employees face workplace disputes involving alleged wrongful termination, sexual harassment, or discrimination based on race, color, religion, sex, national origin, age and disability.

As courts and administrative agencies become less accessible to civil litigants, employers and their employees now see ADR as a way to promptly and effectively resolve workplace disputes. ADR procedures are becoming more common in contracts of employment, personnel manuals and employee handbooks. The American Arbitration Association, the preeminent provider of ADR services in the world, is well-suited to offer guidance in this area in support of efforts by employers to responsibly develop ADR programs to address workplace disputes.

Legal Basis of Employment ADR
Since the beginning of this decade, Congress has twice reaffirmed the important role of ADR in the area of employment discrimination, in the Americans with Disabilities Act in 1990, and a year later in Section 118 of the Civil Rights Act of 1991. While technically not dealing with a contract of employment, the seminal court case dealing with the arbitration of disputes relating to the non-union workplace is Gilmer v. Interstate/Johnson Lane, 500 U.S. 20, 111 S.Ct. 1647 (1991). The Supreme Court refused to invalidate Gilmer''s agreement with the New York Stock Exchange that he would arbitrate disputes with his employer (Interstate/Johnson Lane) simply because he was obliged to sign it in order to work as a securities dealer whose trades were executed on the Exchange. Although the Gilmer Court found that the Age Discrimination in Employment Act did not preclude arbitration of age discrimination claims, it specifically declined to decide whether employment arbitration agreements were the type of "contracts of employment" which are not made enforceable by the Federal Arbitration Act.

Since Gilmer, lower federal courts have generally enforced employer-imposed ADR programs, as long as the programs are fair. Some courts have held that the employee must have received adequate notice of the program. However, the issue of binding arbitration programs that are a condition of employment is still giving rise to litigation.

The Fairness Issue: The Due Process Protocol
The Due Process Protocol for Mediation and Arbitration of Statutory Disputes Arising Out of the Employment Relationship was developed in 1995 by a special task force composed of individuals representing management, labor, employment, civil rights organizations, private administrative agencies, government, and the American Arbitration Association. The Due Process Protocol, which was endorsed by the Association in 1995, seeks to ensure fairness and equity in resolving workplace disputes. The Due Process Protocol encourages mediation and arbitration of statutory disputes, provided there are due process safeguards. It conveys the hope that ADR will reduce delays caused by the huge backlog of cases pending before administrative agencies and the courts. The Due Process Protocol "recognizes the dilemma inherent in the timing of an agreement to mediate and/or arbitrate statutory disputes" but does not take a position on whether an employer can require a pre-dispute, binding arbitration program as a condition of employment.

The Due Process Protocol has been endorsed by organizations representing a broad range of constituencies. They include the American Arbitration Association, the American Bar Association Labor and Employment Section, the American Civil Liberties Union, the Federal Mediation and Conciliation Service, the National Academy of Arbitrators, and the Society of Professionals in Dispute Resolution. The National Employment Lawyers Association has endorsed the substantive provisions of the Due Process Protocol. It has been incorporated into the ADR procedures of the Massachusetts Commission Against Discrimination (MCAD) and into the Report of the United States Secretary of Labor''s Task Force on Excellence in State and Local Government. The full text of the Due Process Protocol appears in the Appendix of this booklet.

AAA''s Employment ADR Rules
On June 1, 1996, the Association issued new National Rules for the Resolution of Employment Disputes. The rules reflect the guidelines outlined in the Due Process Protocol and are based upon the AAA''s California Employment Dispute Resolution Rules, which were developed by a committee of employment management and plaintiff attorneys, retired judges and arbitrators, in addition to Association executives. The revised rules have been developed for employers and employees who wish to use a private alternative to resolve their disputes. The rules enable parties to have complaints heard by an impartial person of their joint selection, with expertise in the employment field. Both employers and individual employees benefit by having experts resolve their disputes without the costs and delay of litigation. The rules include procedures which ensure due process in both the mediation and arbitration of employment disputes. After a year of use, effective June 1, 1997, the rules were amended to address technical issues.

AAA''s Policy on Employment ADR
The AAA''s policy on employment ADR is guided by the state of existing law, as well as its obligation to act in an impartial manner. In following the law, and in the interest of providing an appropriate forum for the resolution of employment disputes, the Association administers dispute resolution programs which meet the due process standards as outlined in its National Rules for the Resolution of Employment Disputes and the Due Process Protocol. If the Association determines that a dispute resolution program on its face substantially and materially deviates from the minimum due process standards of the National Rules for the Resolution of Employment Disputes and the Due Process Protocol, the Association will decline to administer cases under that program. Other issues will be presented to the arbitrator for determination.

Notification
If an employer intends to utilize the dispute resolution services of the Association in an employment ADR plan, it must, at least thirty (30) days prior to the planned effective date of the program: (1) notify the Association of its intention to do so; and (2) provide the Association with a copy of the employment dispute resolution plan. If an employer does not comply with this requirement, the Association reserves the right to decline its administrative services. Copies of all plans should be sent to the American Arbitration Association''s Office of Program Development, 140 West 51st Street, New York, NY 10020; Fax: 212-541-4841.

Designing an ADR Program
The guiding principle in designing a successful employment ADR system is that it must be fair in fact and perception. The American Arbitration Association has considerable experience in administering and assisting in the design of employment ADR plans, which gives it an informed perspective on how to effectively design ADR systems, as well as the problems to avoid. Its guidance to those designing employment ADR systems is summarized below:

· The American Arbitration Association encourages employers to consider the wide range of legally-available options to resolve workplace disputes outside the courtroom.
· A special emphasis is placed by the Association on encouraging the development of in-house dispute resolution procedures, such as open door policies, ombuds, peer review, and internal mediation.
· The Association recommends an external mediation component to resolve disputes not settled by the internal dispute resolution process.
· Programs which use arbitration as a final step may employ:
· pre-dispute, final and binding arbitration;
· pre-dispute, non-binding arbitration;
· post-dispute, final and binding arbitration; or
· post-dispute, non-binding arbitration.
· The Association''s experience and belief is that any ADR method used in the employment context is most effective when the parties knowingly and voluntarily agree on the process, and have confidence in the neutrality of the mediator or arbitrator and the procedures and the institution under which their case is being administered.
· Although the AAA administers binding arbitration programs required as a condition of initial or continued employment, such programs must be consistent with the Association''s National Rules for the Resolution of Employment Disputes and the Due Process Protocol.

The principles outlined above are examined in detail below:

· The American Arbitration Association encourages employers to consider the wide range of legally available options to resolve workplace disputes outside the courtroom.
Experience has shown that systems which include a series of steps in an attempt to resolve disputes in their earliest stages are most likely to be successful. A "one-size fits all" approach does not work in the employment ADR area. A good employment ADR program will be custom-tailored to suit the needs of the employer and its employees, consistent with the current state of the law and the organization''s corporate culture.
A special emphasis is placed by the Association on encouraging the development of in-house dispute resolution procedures, such as open door policies, ombuds, peer review, and internal mediation.

It is in the interest of all parties to resolve disputes as quickly as possible. Therefore, the Association encourages employers to develop in-house dispute resolution systems in an effort to resolve disputes in their early stages. This will minimize the productivity and good will lost during protracted disputes. An impressive variety of options may be selected in one of several combinations, from the menu set forth below:

Alternative Dispute Resolution Options

Open Door Policy: Employees are encouraged to meet with their immediate manager or supervisor to discuss problems arising out of the workplace environment. In some systems, the employee is free to approach anyone in the chain of command.

Ombuds: A neutral third party (either from within or outside the company) is designated to confidentially investigate and propose settlement of employment complaints brought by employees.

Peer Review: A panel of employees (or employees and managers) works together to resolve employment complaints. Peer review panel members are trained in the handling of sensitive issues.

Internal Mediation: A process for resolving disputes in which a neutral third person from within the company, trained in mediation techniques, helps the disputing parties negotiate a mutually acceptable settlement. Mediation is a non-binding process.

Fact-finding: The investigation of a complaint by an impartial third person (or team) who examines the complaint and the facts and issues a non-binding report. Fact-finding is particularly helpful for allegations of sexual harassment, where a fact-finding team composed of one male and one female neutral investigates the allegations and presents its findings to the employer and the employee.

· The Association recommends an external mediation component to resolve disputes not settled by the internal dispute resolution process.

The in-house methods described above will resolve an overwhelming percentage of workplace disputes. For those matters not resolved by these methods, the Association strongly encourages employers to use external mediation, a process which has proven to be a most effective way to resolve disputes to the mutual satisfaction of the parties. The National Rules for the Resolution of Employment Disputes have a mediation component to foster the use of this method of dispute resolution, and the AAA''s staff will encourage parties to use mediation even where a case is commenced under an arbitration clause.
Mediation is a process in which the parties discuss their dispute with an impartial person who assists them in reaching a settlement. The mediator may suggest ways of resolving the dispute but may not impose a settlement on the parties. Mediation offers the advantage of informality, with reduced time and expense needed to resolve disputes. Perhaps the greatest benefit, aside from relatively low cost, is that mediation works --mediation has an 85% settlement rate.

The AAA has developed a roster of experienced mediators knowledgeable in the employment field. It assists the parties in selecting the right mediator for their dispute, and in scheduling a meeting.

· Programs which use arbitration as a final step may employ:
· pre-dispute, final and binding arbitration;
· pre-dispute, non-binding arbitration;
· post-dispute, final and binding arbitration; or
· post-dispute, non-binding arbitration.

Disputes not resolved by the outside mediation step can be arbitrated. Arbitration is generally defined as the submission of disputes to one or more impartial persons for final and binding determination.

It can be the final step in a workplace program that includes other dispute resolution methods. There are many possibilities for designing this final step. They include:

Pre-Dispute, Final and Binding Arbitration: The parties agree in advance to use arbitration to resolve disputes, and they are bound by the outcome.

Where clear notice has been given to employees when plans containing a mandatory arbitration component are implemented, and where the plan is fair, courts have generally enforced them. However, the issue of the validity of imposed binding arbitration systems that are a condition of employment is still being litigated. In Gilmer, the United States Supreme Court was not technically dealing with a contract of employment and specifically did not rule on the enforceability of employment arbitration agreements under the Federal Arbitration Act. Also, the Equal Employment Opportunity Commission (EEOC) and the National Labor Relations Board (NLRB) have legally challenged pre-dispute, mandatory final and binding arbitration agreements imposed as a condition of employment, in some circumstances.

Pre-Dispute, Non-binding Arbitration: The parties agree in advance to use arbitration to resolve disputes, but they are not bound by the outcome.

Post-Dispute, Final and Binding Arbitration: The parties have the option of deciding to arbitrate unresolved disputes after a dispute arises, and they are bound by the outcome.

Post-Dispute, Non-Binding Arbitration: The parties have the option of deciding to arbitrate unresolved disputes after a dispute arises, but they are not bound by the outcome.

The Association''s experience and belief is that any ADR method used in the employment context is most effective when the parties knowingly and voluntarily agree on the process, and have confidence in the neutrality of the mediator or arbitrator and the procedures and the institution under which their case is being administered.

Although the AAA administers binding arbitration programs required as a condition of initial or continued employment, such programs must be consistent with the Association''s National Rules for the Resolution of Employment Disputes and the Due Process Protocol.

If the ADR plan conforms to the Rules and the Protocol, the Association will administer disputes arising from it, pending future legal developments.

Checklist for Employment Arbitration Programs
To aid drafters of employment arbitration programs, the following checklist is provided.

· Include a fair method of cost sharing between the employer and employee to ensure affordable access to the system for all employees.

Some ADR plans allow employees to pay only a small portion of the initial filing fee of the arbitration (e.g., $100) or a percentage of the filing fee based on the employee''s salary. If, however, an employee raises an objection and asks to assume a larger portion of the cost of the arbitration, an employer is wise to do so in order to ensure objectivity of the process and avoid the appearance of bias.

· Use a neutral ADR provider and an established, fair procedure to govern the arbitration.
It is important to designate a neutral arbitral organization, such as the American Arbitration Association, to administer the external component of the program such as the mediation and/or arbitration processes, and to specify the National Rules for the Resolution of Employment Disputes. The American Arbitration Association as administrator acts as a buffer between the parties and the neutral, collecting and disbursing arbitrator compensation, ruling on objections pertaining to the arbitrator''s continued service, and preventing ex parte communication between one party and the arbitrator. The plan should also follow the Due Process Protocol.

· Specify the qualifications and number of arbitrators.
The Association''s national employment panel is composed of a select group of employment law experts including former judges, labor and employment management and plaintiff attorneys, corporate counsel, labor arbitrators and human resource professionals. Arbitrators on this panel have significant employment law experience, particularly in dealing with issues involving statutory rights. The employment ADR program may also specify additional qualifications of the arbitrator. For example, the clause may specify that an arbitrator knowledgeable about the Employment Retirement Income Security Act of 1974 (ERISA) will resolve all pension disputes.

Most employment arbitrations are heard by one arbitrator. However, a clause may provide that large, complex employment cases with claims exceeding a certain dollar amount shall be heard by a panel of three arbitrators. There are benefits and drawbacks to either number. Appointing an arbitrator and scheduling hearings is easier with one arbitrator than with three, and compensation of the neutral is less. However, as the stakes increase, some parties feel more comfortable having their dispute decided by a panel of three individuals.

· Specify the employees to be covered.

The program should describe which employees are included in it. Some examples:

· All employees not covered by collective bargaining agreements
· Certain divisions, departments or work groups
· Certain categories of employees such as executives, supervisors or professionals
· Salaried employees or hourly employees
· Independent contractors
· New-hires only
· Specify the nature of the claims to be covered.

The plan should specify the nature of the claims to be covered, including express reference to employment disputes and/or specific statutory claims such as Title VII and ADEA. Some employers may want the ADR provision to be as broad as possible, while others may choose to exclude certain types of claims. The range of issues to be covered or excluded may include:

· Termination
· Benefits
· Statutory claims
· Sexual harassment
· Wages and compensation
· Performance evaluation
· Give employees clear notice of their right of representation.

The plan should provide that the employee may be represented by counsel or any person whom the employee designates at any stage of the external review process. Plans may also provide information about institutions which offer assistance to parties who cannot afford representation, such as bar associations, legal service associations, and civil rights organizations.

Employers may also consider providing a fair method for reimbursement of at least a portion of the employee''s legal fees, especially for lower-paid employees. This has been accomplished by tying a legal assistance benefit to the employment dispute ADR program. This assures full representation and reduces the risk of appeals on procedural grounds.

· Provide time frames for filing a claim that are consistent with applicable statutes of limitation.

The ADR program should provide time frames for filing a claim that are consistent with applicable statutes of limitation. This is required by the National Rules for the Resolution of Employment Disputes and the Due Process Protocol and establishes a level of clarity regarding when claims must be filed.

· Provide for fair and adequate discovery.

The ADR program should include a fair and simple method by which the parties can obtain the necessary information to present their claim. The plan should provide that any disputes regarding the extent of discovery would be decided by the arbitrator.

· Allow for the same remedies and relief that would have been available to the parties had the matter been heard in court.

Under the National Rules for the Resolution of Employment Disputes, the arbitrator may grant any remedy or relief that the arbitrator deems just and equitable, including any remedy or relief that would have been available to the parties had the matter been heard in court. This authority includes the right to award compensatory and exemplary (or punitive) damages, attorneys'' fees, and other remedies to the extent those remedies would be available under applicable law in court. The National Rules for the Resolution of Employment Disputes do not permit programs to place restrictions on available remedies.

· State clearly that it does not preclude an employee from filing a complaint with a federal, state or other governmental administrative agency.

A plan that prohibits employees from filing complaints with the EEOC, NLRB, or other agencies charged with protecting the statutory rights of employees, may be subject to successful legal challenge. Moreover, an agency is generally free to pursue a complaint from "any source" or even on its own volition.

· Provide adequate notice to employees prior to the plan implementation.

It is important to give employees adequate notice of the planned implementation date of the employment ADR program. This will also allow time to prepare supervisors as to their roles. The "lead time" will depend on several factors, including the nature of the plan, the number of employees and the number of offices (or locations).

· Ensure that the employment ADR plan is written in a clear and easily understood manner.

Employment ADR plans should be easily understood by all employees. Legal jargon should be avoided or kept to a minimum.

Summary of Options
In summary, there are many options available to drafters of employment ADR systems.

1) Internal ADR Options

· open door policy
· peer review
· ombuds
· internal mediation

2) External ADR Options

· fact-finding
· external mediation
· pre-dispute, final and binding arbitration
· pre-dispute, non-binding arbitration
· post-dispute, final and binding arbitration
· post-dispute, non-binding arbitration

Examples of Employment ADR Systems
Given the many variables involved in establishing a sound, responsible employment ADR system that suits the needs of a specific employer and its employees, no one model can be presented as representing the best approach. The Association has examples of established ADR plans it administers and will make them available to those designing employment ADR programs.

Conclusion
The employment ADR field is in a state of rapid expansion and development. Ultimately, the U.S. Supreme Court may decide whether employers can impose binding arbitration programs as a condition of employment. In the interim, given the ongoing development of the law in this area, employers will want to be circumspect in their promulgation of ADR plans. Copies of the American Arbitration Association''s National Rules for the Resolution of Employment Disputes and other materials, guides, and articles related to employment ADR may be obtained by contacting any AAA regional office or the Association''s headquarters at:

American Arbitration Association
Customer Service Department
335 Madison Avenue, 10th Floor
New York, NY 10017-4605
Phone: (212) 716-5800
Fax: (212) 716-5907
Internet E-mail: CustomerService@adr.org

These materials, as well as a broad range of information about the ADR process in other substantive areas, may also be downloaded from the Association''s award-winning World Wide Web site at: http://www.adr.org.

APPENDIX
I. ADR CLAUSES
Reproduced below are just a few examples of ADR clauses that can be used in connection with employment ADR plans. It is by no means an exhaustive compilation.
Mediation Clause

Parties can provide for mediation of disputes by using the following language in the appropriate document:

If a dispute arises out of or relates to this [employment application; employment ADR program; employment contract] or the breach thereof, and if the dispute cannot be settled through negotiation, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its National Rules for the Resolution of Employment Disputes, before resorting to arbitration, litigation or some other dispute resolution procedure.

Optional Arbitration of Unresolved Future Disputes
Parties can provide for voluntary arbitration of disputes after a dispute arises by using the following language in the appropriate document:

Any controversy or claim arising out of or relating to this [employment application; employment ADR program; employment contract] that is not resolved by the parties, shall, upon the written agreement of the parties after the dispute arises, be settled by arbitration administered by the American Arbitration Association under its National Rules for the Resolution of Employment Disputes and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

Agreement to Submit an Existing Dispute to Arbitration
We, the undersigned parties, hereby agree to submit to arbitration administered by the American Arbitration Association under its National Rules for the Resolution of Employment Disputes, the following controversy: (cite briefly). We further agree that the above controversy be submitted to (one) (three) arbitrator(s). We further agree that we will faithfully observe this agreement and the rules, that we will abide and perform any award rendered by the arbitrator(s), and that judgment of the court having jurisdiction may be entered on the award.

Arbitration Clause for Future Disputes
Subject to the caveats expressed in this Guide, parties can provide for arbitration of future disputes by using the following language in the appropriate document:
Any controversy or claim arising out of or relating to this [employment application; employment ADR program; employment contract] shall be settled by arbitration administered by the American Arbitration Association under its National Rules for the Resolution of Employment Disputes and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

II. DUE PROCESS PROTOCOL
A Due Process Protocol for Mediation and Arbitration
of Statutory Disputes arising out of the Employment Relationship
The following protocol is offered by the undersigned individuals, members of the Task Force on Alternative Dispute Resolution in Employment, as a means of providing due process in the resolution by mediation and binding arbitration of employment disputes involving statutory rights. The signatories were designated by their respective organizations, but the protocol reflects their personal views and should not be construed as representing the policy of the designating organizations.

GENESIS
This Task Force was created by individuals from diverse organizations involved in labor and employment law to examine questions of due process arising out of the use of mediation and arbitration for resolving employment disputes. In this protocol we confine ourselves to statutory disputes.

The members of the Task Force felt that mediation and arbitration of statutory disputes conducted under proper due process safeguards should be encouraged in order to provide expeditious, accessible, inexpensive and fair private enforcement of statutory employment disputes for the 100,000,000 members of the workforce who might not otherwise have ready, effective access to administrative or judicial relief. They also hope that such a system will serve to reduce the delays which now arise out of the huge backlog of cases pending before administrative agencies and courts and that it will help forestall an even greater number of such cases.

A. Pre or Post Dispute Arbitration
The Task Force recognizes the dilemma inherent in the timing of an agreement to mediate and/or arbitrate statutory disputes. It did not achieve consensus on this difficult issue. The views in this spectrum are set forth randomly, as follows:

· Employers should be able to create mediation and/or arbitration systems to resolve statutory claims, but any agreement to mediate and/or arbitrate disputes should be informed, voluntary, and not a condition of initial or continued employment.

· Employers should have the right to insist on an agreement to mediate and/or arbitrate statutory disputes as a condition of initial or continued employment. Postponing such an agreement until a dispute actually arises, when there will likely exist a stronger re-disposition to litigate, will result in very few agreements to mediate and/or arbitrate, thus negating the likelihood of effectively utilizing alternative dispute resolution and overcoming the problems of administrative and judicial delays which now plague the system.

· Employees should not be permitted to waive their right to judicial relief of statutory claims arising out of the employment relationship for any reason.

· Employers should be able to create mediation and/or arbitration systems to resolve statutory claims, but the decision to mediate and/or arbitrate individual cases should not be made until after the dispute arises.

The Task Force takes no position on the timing of agreements to mediate and/or arbitrate statutory employment disputes, though it agrees that such agreements be knowingly made. The focus of this protocol is on standards of exemplary due process.

B. Right of Representation
1. Choice of Representative
Employees considering the use of or, in fact, utilizing mediation and/or arbitration procedures should have the right to be represented by a spokesperson of their own choosing. The mediation and arbitration procedure should so specify and should include reference to institutions which might offer assistance, such as bar associations, legal service associations, civil rights organizations, trade unions, etc.

2. Fees for Representation
The amount and method of payment for representation should be determined between the claimant and the representative. We recommend, however, a number of existing systems which provide employer reimbursement of at least a portion of the employee''s attorney fees, especially for lower paid employees. The arbitrator should have the authority to provide for fee reimbursement, in whole or in part, as part of the remedy in accordance with applicable law or in the interests of justice.

3. Access to Information
One of the advantages of arbitration is that there is usually less time and money spent in pre-trial discovery. Adequate but limited pre-trial discovery is to be encouraged and employees should have access to all information reasonably relevant to mediation and/or arbitration of their claims. The employees'' representative should also have reasonable pre-hearing and hearing access to all such information and documentation.
Necessary pre-hearing depositions consistent with the expedited nature of arbitration should be available. We also recommend that prior to selection of an arbitrator, each side should be provided with the names, addresses and phone numbers of the representatives of the parties in that arbitrator''s six most recent cases to aid them in selection.

C. Mediator and Arbitrator Qualification
1. Roster Membership
Mediators and arbitrators selected for such cases should have skill in the conduct of hearings, knowledge of the statutory issues at stake in the dispute, and familiarity with the workplace and employment environment. The roster of available mediators and arbitrators should be established on a non-discriminatory basis, diverse by gender, ethnicity, background, experience, etc. to satisfy the parties that their interest and objectives will be respected and fully considered.

Our recommendation is for selection of impartial arbitrators and mediators. We recognize the right of employers and employees to jointly select as mediator and/or arbitrator one in whom both parties have requisite trust, even though not possessing the qualifications here recommended, as most promising to bring finality and to withstand judicial scrutiny. The existing cadre of labor and employment mediators and arbitrators, some lawyers, some not, although skilled in conducting hearings and familiar with the employment milieu is unlikely, without special training, to consistently possess knowledge of the statutory environment in which these disputes arise and of the characteristics of the non-union workplace.

There is a manifest need for mediators and arbitrators with expertise in statutory requirements in the employment field who may, without special training, lack experience in the employment area and in the conduct of arbitration hearings and mediation sessions. Reexamination of rostering eligibility by designating agencies, such as the American Arbitration Association, may permit the expedited inclusion in the pool of this most valuable source of expertise.

The roster of arbitrators and mediators should contain representatives with all such skills in order to meet the diverse needs of this caseload.

Regardless of their prior experience, mediators and arbitrators on the roster must be independent of bias toward either party. They should reject cases if they believe the procedure lacks requisite due process.

2. Training
The creation of a roster containing the foregoing qualifications dictates the development of a training program to educate existing and potential labor and employment mediators and arbitrators as to the statutes, including substantive, procedural and remedial issues to be confronted and to train experts in the statutes as to employer procedures governing the employment relationship as well as due process and fairness in the conduct and control of arbitration hearings and mediation sessions.

Training in the statutory issues should be provided by the government agencies, bar associations, academic institutions, etc., administered perhaps by the designating agency, such as the AAA, at various locations throughout the country. Such training should be updated periodically and be required of all mediators and arbitrators. Training in the conduct of mediation and arbitration could be provided by a mentoring program with experienced panelists.

Successful completion of such training would be reflected in the resume or panel cards of the arbitrators supplied to the parties for their selection process.

3. Panel Selection
Upon request of the parties, the designating agency should utilize a list procedure such as that of the AAA or select a panel composed of an odd number of mediators and arbitrators from its roster or pool. The panel cards for such individuals should be submitted to the parties for their perusal prior to alternate striking of the names on the list, resulting in the designation of the remaining mediator and/or arbitrator.
The selection process could empower the designating agency to appoint a mediator and/or arbitrator if the striking procedure is unacceptable or unsuccessful. As noted above, subject to the consent of the parties, the designating agency should provide the names of the parties and their representatives in recent cases decided by the listed arbitrators.

4. Conflicts of Interest
The mediator and arbitrator for a case has a duty to disclose any relationship which might reasonably constitute or be perceived as a conflict of interest. The designated mediator and/or arbitrator should be required to sign an oath provided by the designating agency, if any, affirming the absence of such present or preexisting ties.

5. Authority of the Arbitrator
The arbitrator should be bound by applicable agreements, statutes, regulations and rules of procedure of the designating agency, including the authority to determine the time and place of the hearing, permit reasonable discovery, issue subpoenas, decide arbitrability issues, preserve order and privacy in the hearings, rule on evidentiary matters, determine the close of the hearing and procedures for post-hearing submissions, and issue an award resolving the submitted dispute.

The arbitrator should be empowered to award whatever relief would be available in court under the law. The arbitrator should issue an opinion and award setting forth a summary of the issues, including the type(s) of dispute(s), the damages and/or other relief requested and awarded, a statement of any other issues resolved, and a statement regarding the disposition of any statutory claim(s).

6. Compensation of the Mediator and Arbitrator
Impartiality is best assured by the parties sharing the fees and expenses of the mediator and arbitrator. In cases where the economic condition of a party does not permit equal sharing, the parties should make mutually acceptable arrangements to achieve that goal if at all possible. In the absence of such agreement, the arbitrator should determine allocation of fees. The designating agency, by negotiating the parties share of costs and collecting such fees, might be able to reduce the bias potential of disparate contributions by forwarding payment to the mediator and/or arbitrator without disclosing the parties share therein.

D. Scope of Review
The arbitrator''s award should be final and binding and the scope of review should be limited.

Dated: May 9, 1995

Christopher A. Barreca, Co-Chair
Partner
Paul, Hastings, Janofsky & Walker
Rep., Council of Labor & Employment Section, American Bar Association

Max Zimny, Co-Chair
General Counsel, International
Ladies'' Garment Workers'' Union Association
Rep., Council of Labor & Employment Section, American Bar Association

Arnold Zack, Co-Chair
President
National Academy of Arbitrators

Carl E. VerBeek
Management Co-Chair Union Co-Chair
Partner
Varnum Riddering Schmidt & Howlett
Arbitration Committee of Labor & Employment Section, ABA

Robert D. Manning
Angoff, Goldman, Manning, Pyle, Wanger & Hiatt, P.C.
Union Co-Chair
Arbitration Committee of Labor & Employment Section, ABA

Charles F. Ipavec, Arbitrator
Neutral Co-Chair
Arbitration Committee of Labor & Employment Section, ABA

George H. Friedman
Senior Vice President
American Arbitration Association

Michael F. Hoellering
General Counsel
American Arbitration Association

W. Bruce Newman
Representative
Society of Professionals in Dispute Resolution

Wilma Liebman
Special Assistant to the Director
Federal Mediation & Conciliation Service

Joseph Garrison
President
National Employment Lawyers Association

Lewis Maltby
Director
Workplace Rights Project, American Civil Liberties Union