CHAPTER 16

Dispute Resolution

INTRODUCTION

At some time in the employment relationship a dispute may arise between the employer and the employee. In this chapter we will discuss the variety of methods that are available to resolve an employment dispute. Both the employment handbook in Chapter 6 and the employment contract discussed in Chapter 3 should contain language that addresses dispute resolution.

Whether you handle the matter yourself or have an attorney or other representative, for example a shop steward, work with you is a decision that you should make before the proceeding begins. We recommend that you discuss the proceeding with your attorney or representative in order to determine whether that party’s assistance would be beneficial.

MEDIATION

This is a process whereby an individual known as a mediator assists both the employer and the employee in working out an acceptable resolution of the dispute. The mediator is an individual who must be impartial and act like a referee. While mediators are frequently lawyers or retired judges, they do not have to be legal professionals, and there are a number of very prominent mediators who do not have a legal background.

The mediation process may vary, but generally it begins by having both sides prepare a summary of the issues they believe are involved in the dispute. This summary can either be confidential and only provided to the mediator or it can be exchanged with the other party to the mediation depending on what the parties involved in the dispute agree to. The method by which the mediation is conducted varies from mediator to mediator depending upon the experience of the individual conducting the proceeding and the needs of the parties.

The mediation is frequently conducted in an office, and it could be conducted with all three parties (employer, employee, and mediator) in the same room talking it through, or, more commonly, it is conducted with the employer and employee in separate rooms, while the mediator shuttles back and forth between them. The mediator does not decide the dispute; rather, the mediator assists the parties in working out their differences. Mediation may be required by the employment handbook, employment contract, or upon an order from a court, agency, or law.

Customarily the parties to a mediation are provided with a list of possible mediators and the parties must agree to the individual who will serve as mediator. The mediator’s sole mission is to assist the parties in settling the dispute. The mediation may continue for several days, and occasionally a mediation can wind up taking longer. In fact, it is not uncommon for there to be “cooling-off periods” between rounds of mediation in order to provide the parties with an opportunity to determine the best way to resolve a dispute.

The mediator is paid by the parties, and customarily it is agreed that each party pay half of the mediator’s fee. Mediation should be distinguished from a settlement conference, which is discussed in the next section

SETTLEMENT CONFERENCE

A settlement conference is very much like a mediation but it is customarily conducted by a judge in a legal proceeding. A judge is not paid by the parties; rather, the judge is salaried. Settlement conferences are frequently required by courts as a part of the litigation process, and the judge conducting the settlement conference or the court in which the proceeding is pending will have local rules regarding the documents that must be provided before the conference. Hereto the settlement judge does not take sides in the dispute. The settlement judge merely assists the parties in working out their differences. However, if no settlement is reached, the settlement judge may not discuss the settlement proceedings with anyone else. Those proceedings are confidential.

ARBITRATION

Arbitration is a legal proceeding whereby an individual known as an arbitrator acts like a judge. In some situations, the rules require there to be at least three arbitrators, and the matter is resolved when two of them rule in favor of one of the parties.

Arbitrations can be required by contract or may be required by law in some situations. They can be final, in which event the arbitrator’s decision may not be appealed unless the arbitrator has abused their discretion. Other arbitrations that are required in some states as part of the litigation process may be appealed by either party. Arbitration should be distinguished from mediation, because the arbitrator decides the dispute like a judge, whereas a mediator acts as a referee.

IN PLAIN ENGLISH

Abuse of discretion is a legal concept whereby the individual misuses the power and authority that the individual was provided, and as a result the proceeding is considered unfair. This is extraordinarily difficult to establish.

LITIGATION

If the employer or employee feels that a lawsuit is necessary, then suit can be filed in either state or federal court. It is important for an attorney to be involved in litigation, because there are a number of procedural requirements that must be complied with.

Litigation will typically take place in state court, where the state’s procedural rules must be followed. Typically, a document called a complaint will be prepared, which will spell out the facts of the dispute and the relief sought. It will be filed in court and served on the other party. The other party will then have a specified period, customarily thirty days, to respond to the complaint, at which time the case will be started. There will then be a period during which both sides request documents from the other side and conduct other forms of discovery, which are allowed by the local rules. This is probably the most time-consuming and expensive portion of the lawsuit, and an attorney should assist with this process. The case can then be resolved by having it summarily decided or it can be tried by a judge or jury.

IN PLAIN ENGLISH

This is a proceeding whereby the parties believe that the issues and legal rules are so clearly in that party’s favor that a document explaining the party’s position is prepared and filed with the court. A judge will then review that document, conduct a hearing, and determine whether the case or a portion of the case should be resolved in favor of the party who prepared the document. This is referred to as a summary judgment.

At any time in the litigation process, the parties can settle. Litigation is frequently stressful, time-consuming, and expensive. For these reasons the vast majority of disputes are settled before they are ever tried.

Instead of having a case filed in state court, the parties may wish to have their dispute litigated in federal court. In order for a case to be filed in federal court, it must either involve a federal question—for example a federal law must be involved—or the parties must be located in different states and the amount involved in the dispute must exceed $75,000. This is known as diversity jurisdiction and it requires the complainant to be from a state that is different from the state of the parties on the other side. If more than one party is involved, then the attorney must decide whether there is complete diversity before filing a federal lawsuit. The procedural rules in federal court may be different from the rules in state court and the attorney handling the case will likely advise you as to which rules that attorney believes would be beneficial.

IN PLAIN ENGLISH

Complete diversity means that the parties on the complainant side must be from a state or states that are different from any of the parties on the other side of the case. There are complex rules in determining the state a party is from. For example, a corporation that is created in Delaware but has registered offices in numerous other states could be considered to be from all of those states for diversity purposes.

The cost of federal litigation may be higher than state litigation, because the procedural rules are frequently more technical and federal cases may take longer to decide. There are two levels of federal judges, and the parties to a federal lawsuit can decide whether to allow a magistrate judge to handle the case, in which event the case may go faster, or they can choose to have an Article 3 judge, in which event the case is likely to take longer. The attorney involved in the case will likely provide recommendations based on that attorney’s experience.

IN PLAIN ENGLISH

Article 3 of the US Constitution provides for the appointment of federal judges, and judges appointed pursuant to that article are referred to as Article 3 judges. They should be distinguished from magistrate judges who are not appointed pursuant to that constitution provision. Instead, individuals apply for the position of magistrate judge and they are hired for a specified period of time in that capacity. A magistrate judge’s decision on many issues may be appealed to an Article 3 judge.

ADMINISTRATIVE AGENCIES

There are a number of administrative agencies available when employment disputes arise. For employment disputes involving larger businesses, the National Labor Relations Board (NLRB) is available, and that federal agency has its own dispute resolution process. For NLRB disputes you should work with an attorney.

Another federal agency that is available to assist with disputes involving health and safety is the Occupational Safety Health Administration (OSHA). OSHA does not require the use of attorneys, but it is strongly recommended, because OSHA can impose significate penalties.

Both the NLRB and OSHA investigate the complaints they are provided and both agencies have the ability to impose significant sanctions.

Every state in the United States of America has a state employment agency, and those state agencies have procedures for addressing complaints. In fact, the vast majority of state agencies have websites that provide understandable explanations of the laws and rules for employment in that state. You should consult those websites whenever any issue involving employment arises in your workplace.