Ten ways to sabotage dispute management: read between the lines to learn what it takes to run a successful program

HR Magazine, Sept, 2004 by F. Peter Phillips

More than ever, employers are recognizing that disputes involving their employees need not be unexpected, protracted, expensive and unpleasant. Indeed, many employers have devised sophisticated systems for managing employment conflicts toward a consensual resolution. These systems aim to identify problems, bring them to the attention of managers at the appropriate level and address them to the satisfaction of all concerned before they ripen into full-blown "disputes."

From this perspective, being served with a complaint or a notice of claim before a state or federal agency is evidence of a company's managerial failure. Most employers would prefer to learn about an employee-related problem themselves--early--so they can fix it, rather than have a lawyer tell them later, when a "fix" is much more expensive.

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Although dispute management programs can vary according to the needs of each employer, they usually are based on essentially the same three-stage model.

In the first stage, management-level devices provide employees with safe ways to voice concerns. Examples include open-door policies, peer review boards, ombuds offices, "800" numbers, complaint boxes and HR intakes. With assurances of confidentiality, professionalism and nonretribution, these methods are usually successful at identifying and resolving worker complaints and, in the process, improving the quality of the workplace.

In the second stage, mediation is used to permit employees and employers to articulate their interests and seek ways to resolve their disputes with the aid of a skilled and neutral third party. The process is nonadjudicatory, meaning the mediator has no authority to impose an "award." Like more informal methods, it offers not only the potential to leave the working relationship intact, but also the prospect of improving it. Companies using mediation report a high success rate, typically resolving about 80 percent of cases.

The third stage is an adjudicatory process--either arbitration or litigation--in which an arbitrator or a jury renders a decision. In a well-designed and professionally managed employment dispute system, very few conflicts should reach this stage.

Arbitration, while theoretically less expensive and time consuming than litigation, is nevertheless an adversarial process and tends not to contribute to improved employee relations and management practices.

Litigation is not really a management technique at all, but rather the absence of a better alternative. Filing a charge with an enforcement agency or initiating a lawsuit are the employee's only recourse when the employee perceives no internal means of dispute resolution or when all internal mechanisms have failed. Litigation is so expensive and destructive that very few parties ever want to reach it.

Fortunately, today's employers have access to all the resources necessary to help them create a dispute resolution program built on this basic model and engineered for success--one that keeps disputes from reaching the third stage.

And yet, despite these resources and the dispute management experiences we have gained collectively, many individual businesses develop dispute management programs that fall on their faces.

Why? Employers fall prey to common mistakes. Given what we know about dispute management, you'd think it would be hard to mess this up. But recent high-profile court opinions invalidating certain popular dispute resolution approaches demonstrate that employers who really want to fail can always find a way. With that in mind, here is a look at 10 surefire ways to make your dispute management program an utter disaster. (If you insist on doing it right, see "Prescription for Success" on page 166.)

No. 10: Leave Disputes To the Employment Lawyers

Don't worry: If your employees are asserting legal claims under Title VII, wage and hour laws, and the Age Discrimination in Employment Act--that sort of thing--that's a job for the lawyers to take care of. Simply tell your attorneys to get defenses ready for any claim, and then wash your hands. If you win, great. If you lose, it's the lawyers' fault. No down side! Besides, lawyers are cheap.

Don't worry about the fact that your one-size-fits-all defenses will be applied to unique situations and to employees with varying skills, weaknesses, anxieties, confidences, hopes for success and needs for respect. And don't waste time actually identifying and addressing problems in the workplace. As far as you know, there aren't any problems anyway. Let employees sue, and then trust the lawyers to make them sorry they ever did.

No. 9: Just Impose Mandatory Arbitration

The problem is lawsuits, right? So just require everybody to submit employment disputes to arbitration. What could be simpler?

It goes without saying that all your managers have excellent human relationships skills and all your employment policies are enlightened, so employees can't have any legitimate problems in the workplace. It's just a question of whether you're going to let these whining shirkers drag you into court or whether you make sure the hearing takes place in a nice private room with no discovery, no judge or jury, and no publicity.