Alternative dispute resolution (ADR) procedures are becoming more common in employment contracts, human resources manuals, and employee handbooks. The AAA can help resolve sensitive workplace disputes efficiently and expeditiously.
Workplace disputes can arise out of an employer plan (the employer has drafted a standard arbitration clause for use with all its employees), an executive/negotiated employment agreement or contract (the employee has had the ability to negotiate the terms and conditions of the employment agreement) or an independent contractor agreement (working or performing as an individual and not incorporated) with a business or organization and the dispute involves work or work-related claims, including any statutory claims.
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 workplace disputes, the Association administers employer plans which meet the due process standards as outlined in its Employment Arbitration Rules and Mediation Procedures and the Due Process Protocol. If the Association determines that an employer plan on its face substantially and materially deviates from the minimum due process standards of the Employment Rules and Mediation Procedures and the Due Process Protocol, the Association may decline to administer cases under that plan. Other issues will be presented to the arbitrator for determination.
The AAA has been at the forefront in developing standards of fairness for disputes between employees/individuals and companies. In May 1995, the AAA developed the Employment Due Process Protocol in cooperation with a special task force composed of individuals representing management, labor, employment, civil rights organizations, private administrative agencies, government, and the American Arbitration Association. The goal of the Protocol, in concert with the Employment Arbitration Rules, is 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.
Key Provisions of the Due Process Protocol:
- Employees should have the right to be represented by a spokesperson of their own choosing.
- Employees/Individuals should have access to all information reasonably relevant to their claims.
- Employees/Individuals and Employers have a right to an independent and impartial mediator and/or arbitrator.
- Mediators and/or arbitrators shall have knowledge of the statutory issues at stake in the dispute and familiarity with the workplace and employment environment and shall attend training provided by the government agencies, bar associations, academic institutions, etc.
- No party may have unilateral choice of arbitrator.
- There shall be full disclosure by mediators and/or arbitrators of any potential conflict or appearance of conflict or previous contact between the arbitrator and the parties. The arbitrator shall have no personal or financial interest in the matter.
- Arbitrators should be empowered to grant whatever relief would be available in court under the law.
The American Arbitration Association has developed two sets of initial discovery protocols to encourage early exchange of documents and targeted discovery to increase the speed and efficiency of the arbitration process. The link below provides a highlight of the protocols.
Employment Discovery Protocols Fact Sheet
The link below provides the details of the initial discovery protocols for employment cases.
Initial Discovery Protocols for Employment Arbitration Cases – 2013
The link below provides the details of the initial discovery protocols for employment cases involving the Fair Labor Standards Act.
Initial Discovery Protocols for Fair Labor Standards Act Cases – 2018
More than 80% of AAA employment arbitrations are resolved prior to a final award, often due to the benefits of mediation. While parties may include mediation in their contract as a step prior to arbitration, parties can agree to utilize AAA mediation services at any time during an arbitration to assist them in reaching a mutual resolution to their dispute.
During AAA administration of employment arbitrations, mediation is discussed at various stages, including the initial management conference call, to ensure parties not only understand it is an option but also are aware of the benefits it can have toward a speedy and cost-effective resolution.
The AAA Employment Mediation Procedures, while providing for a more informal way to resolve an employment dispute, contain the high standards necessary for a fair and equitable process. The AAA has a roster of trained and experienced mediators with the expertise required to assist parties in settling their disputes.
AAA Consumer and Employment Arbitration Statistics
The AAA maintains an online Consumer and Employment Arbitration Statistics report based on AAA consumer cases closed within the last five years. This report is made available pursuant to state statutes such as the California Code of Civil Procedure §1281.96, Maryland Commercial Law §§ 14-3901 to 3905, and New Jersey Statutes § 2A:23B-1 et seq. and updated quarterly, as required by law.
AAA Arbitrator Demographic Data
Pursuant to California Code of Civil Procedure §1281.96, the AAA maintains Arbitrator Demographic Data, reported in the aggregate, relative to ethnicity, race, disability, veteran status, gender, gender identity, and sexual orientation of all arbitrators as self-reported by the arbitrators as well as the percentage of arbitrators who declined to respond.
If an employer intends to utilize the dispute resolution services of the Association in an employment ADR plan, it should, at least 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, 1101 Laurel Oak Road, Suite 100, Voorhees, NJ 08043; Email: firstname.lastname@example.org.
Under the Employment/Workplace Fee Schedule, the employee’s or individual’s fee is capped at $300, unless the clause provides that the employee or individual pay less. The employer or company pays the arbitrator’s compensation unless the employee or individual, post dispute, voluntarily elects to pay a portion of the arbitrator’s compensation. Arbitrator compensation and administrative fees are not subject to reallocation by the arbitrator except upon the arbitrator’s determination that a claim or counterclaim was filed for purposes of harassment or is patently frivolous.
The American Arbitration Association has revised the Employment/Workplace Fee Schedule, effective November 1, 2019. The revised fees apply to those cases that meet the definition of a group filing. The group filing definition is outlined below.
This Employment/Workplace Fee schedule will apply to all cases when the American Arbitration Association (AAA) determines in its sole discretion that the following conditions are met:
a. Twenty-five (25) or more similar claims for arbitration or meditation are filed;
b. Claims are against or on behalf of the same party or parties; and
c. Counsel for the parties is consistent or coordinated across all cases.
As a not-for-profit entity, the AAA is committed to ensuring that its fees do not interfere with the efficient and cost-effective resolution of disputes. While the initial fees have decreased under the group filing fee schedule, the total administrative fee for the company under the group filing fee schedule for a case that does move to a hearing has increased.