oversight

Alternative Dispute Resolution: Employers' Experiences With ADR in the Workplace

Published by the Government Accountability Office on 1997-08-12.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to the Chairman, Subcommittee
                 on Civil Service, Committee on
                 Government Reform and Oversight,
                 House of Representatives

August 1997
                 ALTERNATIVE DISPUTE
                 RESOLUTION
                 Employers’ Experiences
                 With ADR in the
                 Workplace




GAO/GGD-97-157
                   United States
GAO                General Accounting Office
                   Washington, D.C. 20548

                   General Government Division

                   B-274297

                   August 12, 1997

                   The Honorable John L. Mica
                   Chairman, Subcommittee on Civil Service
                   Committee on Government Reform and Oversight
                   House of Representatives

                   Dear Mr. Chairman:

                   In testimony before your Subcommittee in late 1995, we stated that the
                   administrative redress system for federal employees was inefficient, time
                   consuming, and costly.1 A number of federal agencies have recognized
                   these problems and, in recent years, have looked for some means of
                   alternative dispute resolution (ADR) to help lessen the burdens associated
                   with the redress system, which was designed to protect federal employees
                   against arbitrary agency actions and prohibited personnel practices, such
                   as discrimination or retaliation for whistleblowing. Based not only on the
                   fact that Congress has endorsed ADR in the past, but also that individual
                   agencies have taken ADR initiatives and the Equal Employment
                   Opportunity Commission (EEOC) has encouraged its use, it is apparent that
                   policymakers and agency managers have been considering the advantages
                   of using ADR to resolve federal workplace disputes.

                   As part of the Subcommittee’s efforts to reform the redress system, you
                   asked us to provide information on (1) private sector companies’ and
                   federal agencies’ reasons for using ADR; (2) the types of ADR these
                   organizations have made available to their employees through procedures
                   other than those under collective bargaining agreements and the extent to
                   which they have put these ADR processes in place; and (3) the results, if
                   any, they have achieved by using ADR. You also requested that, for
                   illustrative purposes, we select a small number of private companies and
                   federal agencies and examine (1) their experiences in planning and
                   implementing ADR processes; (2) the extent to which they evaluated their
                   ADR processes and the extent to which they reported that these processes
                   have been successful in resolving workplace disputes and in lessening the
                   costs—in time and money—associated with formal redress processes and
                   litigation; and (3) the lessons they reported learning in planning,
                   implementing, and evaluating their ADR processes.


                   Many private companies and federal agencies have used ADR to avoid more
Results in Brief   formal dispute resolution processes: lawsuits and—especially in the

                   1
                    Federal Employee Redress: An Opportunity for Reform (GAO/T-GGD-96-42, Nov. 29, 1995).



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federal sector—formal administrative redress procedures. One reason for
the use of ADR, as reflected in the literature and reported by private and
federal officials, was that traditional dispute resolution processes have
been costly, in both time and money, and became especially so as the
number of discrimination complaints rose sharply in the early 1990s. In
addition, a number of new laws and regulatory changes in the 1990s
encouraged organizations to use ADR in workplace disputes. Moreover, ADR
often focuses on disputants’ underlying interests; and the EEOC, among
others, has noted the potential advantages of techniques that focus on
understanding the disputants’ underlying interests over techniques that
focus on the validity of their positions (e.g., a complaint of discrimination
or a defense against a complaint).

Through a broad examination of ADR use involving interviews with experts
and practitioners, a review of the literature, and our earlier survey of the
private sector,2 we identified five main ADR methods available to private
sector employees and, in some instances, to federal employees:
ombudsmen, mediation, peer panels, management review and dispute
resolution boards, and arbitration. According to our survey, in 1994, about
52 percent of private companies reported having some type of ADR process
in place for discrimination complaints; these companies reported that they
generally instituted ADR organizationwide. In contrast, 31 percent of the 75
federal agencies responding to a 1994 EEOC survey made ADR available for
discrimination complaints. By 1996, this percentage had increased to
49 percent, based on responses from 87 federal agencies to an
October 1996 EEOC survey. But as our review of the literature, our
interviews with experts and knowledgeable officials, and our case
illustrations showed, ADR availability or use was not pervasive—or even
necessarily widespread—within agencies that reported having some ADR
capability.

Private companies responding to our survey generally reported employing
a wider variety of ADR methods than did federal agencies. Of the private
firms that reported using ADR, about 80 percent used mediation, about
39 percent used peer review panels, and about 19 percent used arbitration.
EEOC’s surveys showed that most federal agencies that reported having ADR
used only mediation.



2
 We sent a questionnaire to a nationally representative sample of businesses with more than 100
employees according to reports filed with EEOC in 1992. Survey results were reported in Employment
Discrimination: Most Private-Sector Employers Use Alternative Dispute Resolution
(GAO/HEHS-95-150, July 5, 1995).



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No comprehensive data were available on ADR results in the private and
federal sectors; but, as our broad examination of ADR use and our case
illustrations showed, experts and officials at organizations using ADR
generally considered it to be successful in resolving workplace disputes,
thereby avoiding more formal dispute resolution processes.
Comprehensive data were unavailable on the extent to which ADR has
saved organizations time and money, largely because most ADR programs
are relatively new, and because time and cost savings have not been
widely tracked or evaluated. Experts and officials at organizations using
ADR generally believed, however, that avoiding litigation or more formal
redress processes produced savings.

The five companies and five federal agencies that we studied as case
illustrations reported having varied but generally positive experiences
with ADR (only one—the Department of Agriculture—found serious flaws
in its ADR program). Officials at nine of these organizations reported that
efforts had been made to involve employees in developing their ADR
programs, to train key participants, and to make their ADR programs
known and understandable throughout the organization. The fact that the
companies were not subject to the rules that govern the federal employee
administrative redress system, which provides for hearings before an
administrative judge, allowed them to establish ADR practices—particularly
in the area of arbitration—that are not found among federal agencies. The
extent to which the companies established these practices varied from one
company to the next.

Most of the organizations we studied gave only limited attention to
evaluating the results of their ADR programs and the time or cost savings
these programs may have generated. All 10 organizations gathered at least
some data on dispute resolution rates, although these data were not
generally conclusive. To the extent that data were available, mediation,
peer panels, management review boards, and arbitration (which is
generally not available to federal employees outside of the collective
bargaining process) all appeared to contribute to the resolution of
workplace disputes. Mediation appeared to be particularly useful, leading
to resolution in a high percentage of cases in all but one of the
organizations we studied.

Data were limited regarding time and cost savings. None of the companies
and only two of the agencies reported data on the amount of time saved by
the use of ADR. The two federal agencies indicated that using ADR had cut
about one-third to one-half the time it had normally taken to resolve



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             discrimination complaints. (Two other agencies indicated that ADR
             processes, by resolving discrimination complaints in their early stages, had
             reduced the number of formal complaints that were filed, along with the
             necessity to spend time on the associated formal procedures.) Cost
             savings were difficult to establish. Only one company and one federal
             agency had performed evaluations that produced data regarding cost
             savings. The company reported that with ADR in place, the overall cost of
             dealing with employment conflicts, including the total cost of the ADR
             program, was now less than half of what the company used to spend on
             legal fees for employment-related lawsuits. The agency that had gathered
             data on cost savings found that, when the cost of settlements was factored
             in, it was unclear whether its ADR process was less costly than the
             traditional equal employment opportunity (EEO) complaint process.

             The lessons that the organizations we studied reported learning in
             planning, implementing, and evaluating their ADR programs varied, but
             many of them centered on ensuring that the appropriate ADR methods were
             adopted and that they fulfilled their potential. Some of the lessons
             organizations reported learning were the importance of top management
             commitment in establishing and maintaining a program, the importance of
             involving employees in the development of their ADR programs, the
             advantage of intervening in the early stages of disputes so as to focus more
             on underlying interests than on hardened positions, the necessity to
             balance the desire to settle and close cases against the need for fairness to
             all concerned, and the fact that ADR programs could help improve
             managers’ understanding of the roots of conflict in their organizations.


             Federal employees have long had substantial workplace protections
Background   through an administrative redress system that was designed to safeguard
             them against arbitrary agency actions and prohibited personnel practices,
             such as discrimination or retaliation for whistleblowing. But the redress
             system—especially insofar as it affects workplace disputes involving
             claims of discrimination—has been criticized by federal managers, as well
             as by employee representatives, as adversarial, inefficient, time
             consuming, and costly.

             For executive branch employees, the first opportunity for redress is within
             their own agencies. For matters that are not resolved at the agency level,
             or not handled solely under the terms of collective bargaining agreements,
             three independent federal bodies process employee complaints and
             appeals.



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•   EEOC  adjudicates employee complaints of discrimination, which generally
    are investigated first by the agencies for which the employees work;
•   the Merit Systems Protection Board (MSPB) adjudicates, among other
    things, employee appeals of firings or suspensions of more than 14 days;
    and
•   the Office of Special Counsel investigates employee complaints of
    prohibited personnel practices—in particular, retaliation for
    whistleblowing.

    In some cases, a single complaint may be handled by more than one of
    these agencies, adding to the time and costs involved in its resolution.
    Finally, the law allows for further review of these agencies’ decisions in
    the federal courts.

    The Administrative Dispute Resolution Act of 1990, which required federal
    agencies to develop ADR policies, charged the Administrative Conference
    of the United States (ACUS) with (1) assisting agencies in developing ADR
    policies and (2) compiling information on agencies’ use of ADR. The act
    sunset in September 1995, and ACUS was abolished in October 1995. The
    Administrative Dispute Resolution Act of 1996 permanently reauthorized
    the 1990 act and charged the President with naming a successor to ACUS to
    facilitate and encourage agency use of ADR. As of July 1997, no successor
    had been designated.3

    The term ADR covers a variety of dispute resolution techniques, usually
    involving intervention or facilitation by a neutral third party. ADR
    methods—arbitration and mediation in particular—date back to the early
    1900s. Originally, ADR was used mostly to resolve disputes involving
    employees who were covered by collective bargaining agreements. More
    recently, organizations began applying ADR methods to disputes involving
    other employees as well.4

    Although ADR has been used as a tool—especially in resolving disputes that
    arise from miscommunication, personality conflicts, or alleged
    discrimination—many experts and practitioners cautioned that ADR is not
    appropriate in all cases. Inappropriate situations, they said, include

    3
     When ACUS was abolished, the Federal Mediation and Conciliation Service (FMCS), which shared
    responsibility with ACUS for helping agencies develop ADR policies, assumed sponsorship of the
    Federal ADR Network (FAN), an interagency group that provides assistance to agencies in designing
    ADR systems, obtaining resources, or acquiring neutrals. In addition, FMCS assumed responsibility for
    ACUS’ ADR research and clearinghouse activities.
    4
     In discussing the availability of ADR to federal employees, this report does not include procedures
    available under collective bargaining process.



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              incidents of violence or cases of severe sexual harassment. Under the
              Administrative Dispute Resolution Act, ADR is also considered
              inappropriate when authoritative resolution of a matter is required for
              precedential value, the matter in dispute has significant government policy
              implications, or it is important to produce a full public record of the
              proceedings.


              To provide information on private sector companies’ and federal agencies’
Scope and     reasons for using ADR, the types of ADR these organizations have made
Methodology   available through procedures other than those under collective bargaining
              agreements, the extent to which they have put these processes in place,
              and the results they may have achieved, we spoke with experts and
              practitioners knowledgeable about the use of ADR in the private and
              federal sectors, and reviewed the literature about ADR and information
              available from past reports and surveys.

              To illustrate private and federal sector organizations’ experiences in
              planning and implementing ADR processes, the extent to which they
              evaluated their ADR processes and the extent to which they reported that
              these processes have been successful in resolving workplace disputes and
              lessening costs, and the lessons they reported having learned, we
              judgmentally selected for study five private sector companies and five
              federal agencies that had some experience with ADR. These organizations
              reflected a range of ADR practices; had ADR processes in place a sufficient
              length of time to provide information about use, outcome, and lessons
              learned; and had at least some use or outcome data available. In the
              private sector, we studied Brown & Root, Inc.; Hughes Electronics
              Corporation; the Polaroid Corporation; Rockwell International
              Corporation; and TRW Inc. In the federal sector, we studied the
              Department of Agriculture, the Department of the Air Force, the Postal
              Service,5 the Department of State, and the Walter Reed Army Medical
              Center. We also studied the Seattle Federal Executive Board’s Interagency
              ADR Consortium, a “shared neutrals” program, which provides for the
              sharing of ADR resources among federal agencies in the Seattle area. In


              5
               In this report we included the Postal Service under the grouping of “federal agencies,” even though it
              is an independent governmental establishment. We have done so because the Postal Service is bound
              by most of the same discrimination complaint processes that apply to most federal agencies. A Postal
              Service worker who alleges discrimination can take two courses of action concurrently: (1) the
              employee can file a discrimination complaint under the federal employee discrimination complaint
              process, and also (2) file a grievance through procedures covered by the union’s collective bargaining
              agreement. Although both courses of action are available to Postal Service workers, this report deals
              only with the ADR processes that the Postal Service has made available to workers who file
              discrimination complaints under the federal employee discrimination complaint process.



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                       doing these studies, we obtained information about the organizations
                       either on-site or from telephone interviews with responsible officials, from
                       material and data they provided, and from published information.

                       There are limitations to the information we present in this report. First, the
                       case illustrations and the observations that we are reporting only illustrate
                       ADR approaches that have been put into practice and are not intended to be
                       considered “best practices.” Second, organizations identified through
                       literature searches and leads from experts in the field are more likely than
                       not to have reported successful outcomes. Third, the participation of the
                       private sector companies in our study was voluntary, and the companies
                       reserved the right to withhold proprietary information; this limited our
                       ability to analyze their programs with the assurance that we had obtained
                       all relevant data. Fourth, the views we obtained were those of agency and
                       company management and not of employees. Finally, we did not verify the
                       data that were provided to us.

                       We conducted our review between July 1996 and April 1997 in accordance
                       with generally accepted government auditing standards. We sent copies of
                       a draft of this report to the Chairman, EEOC; the Director, FMCS; and the
                       Director, Office of Personnel Management (OPM) for review and comment.
                       In addition, we asked cognizant officials from each case illustration
                       organization to review and comment on a draft of the case illustration
                       describing their respective organization’s ADR experiences. Their
                       comments are presented at the end of this letter. Details of our objectives,
                       scope, and methodology appear in appendix I.


                       According to the ADR literature as well as experts and practitioners in the
Organizations Turned   private and federal sectors, organizations turned to ADR as a means of
to ADR for Several     avoiding more formal dispute resolution processes. Many private sector
Reported Reasons       firms turned to ADR to supplement their traditional ways of handling
                       disputes (e.g., through the chain of command) with the intent of reducing
                       the number of litigations. For federal organizations, ADR offered a way to
                       avoid the burdens associated with both the administrative redress system
                       and litigation by federal employees.6 Additionally, the use of ADR in the
                       private and federal sectors was spurred in the early 1990s by a dramatic
                       increase in the number of discrimination complaints, along with the costs,
                       time, and frustration involved in attempting to resolve them. Several new
                       laws and regulatory changes made companies and agencies even more

                       6
                        For further discussion, see Civil Service Reform: Redress System Implications of the Omnibus Civil
                       Service Reform Act of 1996 (GAO/T-GGD-96-160, July 16, 1996).



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                            likely to develop ADR processes. Moreover, in some quarters—such as
                            EEOC—a recognition emerged that the interest-based approach that is the
                            basis for some ADR techniques can be a constructive alternative to
                            adversarial, position-based processes.


Organizations Turned to     Private and federal organizations alike turned to ADR to reduce their
ADR to Avoid the Time and   involvement in costly and time-consuming processes: lawsuits
Costs Involved in           and—especially in the federal sector—formal administrative redress
                            procedures. In 1995, we reported that private employers were adopting
Resolving Workplace         ADR approaches because of their concerns about the costs—in time,
Disputes                    money, and good employee relationships—of dealing with
                            employment-related lawsuits and discrimination complaints.7 Among the
                            five private companies we studied as case illustrations, four cited
                            significant litigation costs as a reason for developing their ADR processes.
                            One of the companies—Brown & Root—turned to ADR after spending over
                            $400,000 to defend itself in a discrimination suit. Although the company
                            prevailed in the case, an official referred to it as “the case nobody won,”
                            because of the human and financial costs it involved. (See app. II.)

                            Among federal agencies, the primary reason officials reported for making
                            ADR  processes available has been to avoid the costs—especially those
                            involving time and organizational efficiency—associated with the redress
                            system.8 For example, according to EEOC data, the average length of time it
                            took for federal agencies to close a discrimination complaint in fiscal year
                            1995 was 305 days. For cases that involved both a hearing and a later
                            appeal to EEOC, the average processing time was 801 days.9 As we stated in
                            our November 1995 testimony, the prospect of having to deal with the
                            lengthy and complex dispute resolution system can have a broader impact:
                            it can affect the willingness of federal managers to deal with conduct and
                            performance issues.



                            7
                             Employment Discrimination: Most Private-Sector Employers Use Alternative Dispute Resolution
                            (GAO/HEHS-95-150, July 5, 1995).
                            8
                             Individual federal agencies do not bear all of the costs of redress. They do not pay for the services of
                            EEOC and MSPB administrative judges or the cost of Justice Department defense services. In addition,
                            agencies do not generally pay the costs of court judgments or settlements resulting from
                            discrimination lawsuits; these costs are generally paid from the Judgment Fund, which provides a
                            permanent indefinite appropriation to pay such costs. The Postal Service is an exception; it is required
                            to use its own funds to pay judgment and settlement costs resulting from lawsuits.
                            9
                             EEOC reported that for cases closed in fiscal year 1995 that involved a hearing, the average
                            processing time was 572 days. The average processing time for a subsequent appeal to EEOC was 229
                            days in fiscal year 1995.



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Interest in ADR Grew With   In both the private and federal sectors, the time and cost pressures that
the Rising Tide of          helped spur the use of ADR increased when the number of discrimination
Discrimination Complaints   complaints rose sharply in the early 1990s. In the private sector, the
                            number of discrimination complaints filed with EEOC10 grew by 43 percent
                            between fiscal years 1991 and 1994—from 63,898 to 91,189—before
                            beginning to decline. In the federal sector, the increase in the number of
                            discrimination complaints filed with federal agencies11 was also
                            substantial, rising by 55 percent between fiscal years 1991 and 1995—from
                            17,696 to 27,472.12 In December 1994, the Commission on the Future of
                            Worker-Management Relations reported that the rise in complaints lodged
                            with administrative agencies and the increase in employment litigation had
                            led employers, employee groups, and lawmakers to seek alternatives.13

                            The increase in discrimination complaints in the early 1990s can be
                            attributed to several factors, according to EEOC, dispute resolution experts,
                            and officials of organizations that we studied. They said that downsizing
                            efforts resulted in a surge of complaints in both the private and federal
                            sectors. In addition, the Americans with Disabilities Act of 1990
                            established new grounds for employment-related complaints by the
                            disabled. (Federal workers had gained similar protections under the
                            Rehabilitation Act of 1973.) Further, the Civil Rights Act of 1991 allows for
                            the award of compensatory damages of up to $300,000 to employees in
                            cases where the employer has engaged in unlawful intentional
                            discrimination. While monetary damages had previously been available to
                            private sector complainants, under the Civil Rights Act of 1991 federal as
                            well as private sector workers can be awarded compensatory damages,
                            and private sector workers can also receive punitive damages in certain

                            10
                              The EEOC investigates complaints filed by private sector employees against employers. Before a
                            private sector worker can take an unresolved matter to court, he or she must obtain a “right-to-sue
                            letter” from EEOC or a similar state or local agency.
                            11
                             A federal employee files a discrimination complaint with his or her agency, which investigates the
                            complaint in accordance with regulations promulgated by EEOC. EEOC adjudicates an unresolved
                            complaint at the request of an employee.
                            12
                              The number of private sector complaints declined by 14.5 percent between fiscal years 1994 and
                            1996, while the increase in federal sector complaints has continued unabated. (Fiscal year 1996 data on
                            federal sector complaints were not available at the time of our study.) EEOC attributes the abatement
                            in private sector complaints partly to its 1995 policy of screening and prioritizing complaints by private
                            sector employees. Although EEOC has not yet introduced a similar policy with regard to federal
                            employees’ discrimination complaints, it is studying ways to streamline the complaint process.
                            13
                              The Commission of the Future of Worker-Management Relations (commonly known as the Dunlop
                            Commission after its chairman, former Secretary of Labor John T. Dunlop) was established by the
                            President in May 1993 and asked to investigate several issues. One of these issues involved what could
                            be done to enable employers and employees to resolve workplace problems themselves, rather than
                            turn to state and federal courts and government regulatory bodies. In December 1994, the Commission
                            completed its tasks and issued its final report.



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                              circumstances. The act also provided for jury trials; according to the
                              literature we reviewed, in jury trials, a plaintiff has a greater chance of
                              prevailing and receiving a higher award than in a hearing before a judge
                              alone. At each of the five federal agencies we studied as case illustrations,
                              officials said the increase in complaints at their agencies was driven partly
                              by the availability of monetary awards in addition to the previously
                              available forms of relief. Officials at four federal agencies said it was
                              typical for a complainant to request compensatory damages, regardless of
                              the severity of the allegation.


Recent Laws and               New legislative and regulatory developments in the 1990s have supported
Regulatory Changes            the use of ADR in resolving workplace disputes. The Americans with
Encouraged ADR Use            Disabilities Act of 1990 encouraged the use of ADR where appropriate; and
                              the Civil Rights Act of 1991 encouraged the use of ADR in EEO complaints
                              lodged by workers in the private and federal sectors alike. Other examples
                              include the Administrative Dispute Resolution Act of 1990, which required
                              federal agencies to develop policies to address the use of ADR, and the Civil
                              Justice Reform Act of 1990, which encouraged federal courts to use ADR in
                              managing their caseloads. In addition to these statutory encouragements,
                              regulatory features came into being as well. For example, EEOC issued
                              regulations in 1992 that encouraged the use of ADR in the federal
                              discrimination complaint process.14 And in 1995, EEOC established a policy
                              encouraging the use of ADR for dealing with discrimination complaints by
                              private sector employees.


Some Have Pointed Out         Another factor in the widening adoption of ADR practices has been a
the Value of Interest-Based   recognition that traditional methods of dispute resolution do not always
Dispute Resolution            get at the real or underlying issues involved between disputants and that
                              methods that focus on the disputants’ interests may have advantages.
                              Traditional methods of dispute resolution—lawsuits in the private sector,
                              formal administrative redress procedures in the federal sector—are
                              predominately position-based. Simply stated, each disputant stakes out a
                              position—such as a complaint of discrimination or a defense against a
                              complaint—and hopes to win the case. But interest-based dispute
                              resolution, which is the basis for some ADR techniques, focuses on
                              determining the disputants’ underlying interests and working to resolve


                              14
                               In June 1997, after we concluded our field work, EEOC’s Washington Field Office announced a
                              program of mandatory mediation in federal employee cases that are suitable for a hearing before an
                              administrative judge. The program was expected to get under way in July 1997. Mediation will be
                              conducted by mediators from EEOC and volunteers from the D.C. Bar Labor and Employment section.



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                            their conflict at a more basic level, perhaps even bringing about a change
                            in the work environment in which their conflicts developed.

                            EEOC,   among others, has noted the potential value of the interest-based
                            approach to dispute resolution in reducing the number of formal
                            discrimination complaints. Reflecting on the high number of
                            discrimination complaints among federal employees, an EEOC study
                            recently concluded that “. . . there may be a sizable number of disputes in
                            the 1614 process [so named for the regulations governing the process—29
                            C.F.R. Part 1614] which may not involve discrimination issues at all. They
                            reflect, rather, basic communications problems in the workplace. Such
                            issues may be brought into the EEO process as a result of a perception that
                            there is no other forum available to air general workplace concerns. There
                            is little question that these types of issues would be especially conducive
                            to resolution through an interest-based approach.”15


                            ADR, a term that covers various techniques that many organizations have
The Types and Extent        used to avoid or reduce the burden of more traditional dispute resolution
of ADR Available in         processes, can include a variety of approaches, usually involving
the Private and             intervention or facilitation by a neutral third party. We identified five main
                            ADR methods available to many private sector employees and, in some
Federal Sectors Vary        instances, to federal employees: ombudsmen, mediation, peer panels,
                            management review and dispute resolution boards, and arbitration. The
                            extent to which ADR has been made available in the private sector has been
                            greater than in the federal sector; so has the variety of ADR methods
                            generally made available to employees.


ADR Covers a Range of       The ADR methods we identified in our research cover a range of
Methods From the Less       approaches. (These approaches are briefly defined in table 1.) At one end
Formal to the More Formal   of the range are relatively informal processes in which a neutral party,
                            such as an ombudsman or mediator, assists the disputants in crafting
                            mutually acceptable solutions that satisfy their respective interests.16 At
                            the other end are more formal processes—such as peer panels,


                            15
                               ADR Study, U.S. Equal Employment Opportunity Commission, Office of Federal Operations,
                            Oct. 1996.
                            16
                              Facilitation is another technique used in the early stages of a dispute, according to OPM officials. A
                            facilitator attempts to improve the communication process between the parties but typically does not
                            become as involved as a mediator would be in the substantive issues. In addition, FMCS officials said
                            another method that is becoming more widely used in the early stages of a dispute is early neutral
                            evaluation, in which a neutral provides a nonbinding evaluation that gives the parties a more objective
                            assessment of their positions.



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                                          management review boards, and arbitration—in which a neutral body or
                                          person may rule on the merits of the parties’ positions and impose a
                                          solution. The less formal processes tend to be employed at the earlier
                                          stages of disputes, before disputants’ positions have solidified; the more
                                          formal processes tend to come into play at the later stages of disputes,
                                          often just before the point at which grievants must decide whether or not
                                          to take their cases to adjudicatory forums—court in the private sector,
                                          MSPB or EEOC in the federal sector.



Table 1: Predominant ADR Methods
                                          Definitions of Predominant ADR Methods
Method               Definition
Ombudsman            A neutral third party designated by an organization to assist a complainant in resolving a conflict. An
                     ombudsman provides confidential counseling, develops factual information, and attempts conciliation
                     between disputing parties. The power of the ombudsman lies in his or her ability to persuade the parties to
                     accept his or her recommendations. Ombudsmen are also called advisors.
Mediation            A process in which a trained neutral third party helps disputants negotiate a mutually agreeable settlement.
                     The mediator has no authority and does not render a decision but may suggest some substantive options to
                     encourage the parties to expand the range of possible resolutions under consideration. Any decision must be
                     reached by the parties themselves.
Peer Review          A panel of employees (or employees and managers) who review evidence and listen to the parties’ arguments
                     to decide an issue in dispute. Peer review panel members are trained in the handling of sensitive issues. The
                     panel’s decision may or may not be binding on the parties.
Management Review    Similar to peer review, a panel of managers who review evidence and listen to the parties’ arguments to
Boards               decide an issue in dispute. Board members are trained in the handling of sensitive issues. The decision of the
                     board may or may not be binding on the parties. Also called dispute resolution boards.
Arbitration          An adjudicatory process in which a neutral third party is empowered to decide disputed issues after hearing
                     evidence and arguments from the parties. The arbitrator’s decision may be binding on the parties either
                     through agreement or operation of law. Arbitration may be voluntary (i.e., where the parties agree to use it), or
                     it may be mandatory and the exclusive means available for handling certain disputes.
                                          Source: Adapted by GAO from materials developed by OPM and ACUS.



                                          For a fuller discussion of how these processes worked at the private firms
                                          and federal agencies that we looked at in detail, see the case illustrations
                                          (apps. II through XI). Table 2 shows the ADR processes used at each of
                                          these organizations.




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Table 2: ADR Techniques Used by Selected Private Companies and Federal Agencies
                                                                                                         Management
Organization                                    Ombudsman             Mediation        Peer Panel       Review Board                 Arbitration
Private Sector
Brown & Root                                                   •                 •                                                             •f
                                                                                   a
Hughes Electronics                                             •                                                        •                      •f
Polaroid                                                       •                 •              •                       •                      •g
Rockwell                                                                                        •                                              •f
TRW                                                                              •              •                                              •g
Federal agencies
Agriculture                                                                      •b                                     •c                      c

Air Force                                                                        •
                                                                                                                                                d
Postal Service                                                                   •
                                                                                                                          e
State                                                          •                 •
Walter Reed Army Medical Center                                                  •
                                        Legend:

                                        •indicates use of a technique by an organization.
                                        a
                                        Mediation is used infrequently at Hughes; no written policy requires it.
                                        b
                                            Mediation is a recent initiative at Agriculture.
                                        c
                                         In February 1997, an internal task force recommended that Agriculture discontinue its Dispute
                                        Resolution Boards and adopt voluntary binding arbitration to deal with discrimination case
                                        backlogs. Boards were discontinued in April 1997.
                                        d
                                         Binding arbitration was used in discrimination cases in a pilot project (North Florida) but was
                                        later discontinued.
                                        e
                                        A board process was used on a trial basis but was later discontinued.
                                        f
                                         Employees are required, as a condition of employment, to use arbitration in lieu of litigation to
                                        settle workplace disputes. Arbitration is binding on the firm and the employee.
                                        g
                                         Arbitration is not required as a condition of employment, but employees are expected to use
                                        arbitration before taking a matter to court, and the firm’s policy is, if necessary, to seek a court
                                        order compelling the employee to do so. Arbitration is binding on the company but not on the
                                        employee.

                                        Source: Information provided by the organizations included in the table.




ADR Was More Widespread                 Overall, ADR has been more widely available among private sector firms
in the Private Sector and               than among federal agencies. In addition, ADR has been more widely
More Varied                             available within private firms that have it than within federal agencies that




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have it. In 1994, according to a survey we did,17 about 52 percent of private
firms had some type of ADR process in place for discrimination
complaints.18 In contrast, in the federal sector, a 1994 EEOC survey19
showed that about 31 percent of the 75 federal agencies responding to the
survey had made ADR processes available for discrimination complaints.
For the years after 1994, no data were available on the scope of private
sector use of ADR in the workplace, but based on discussions with experts
at the American Arbitration Association, the CPR Center for Dispute
Resolution, and the Equal Employment Advisory Council, use of ADR in the
private sector has increased since 1994. The most recent data on the use of
ADR in the federal sector are from EEOC’s 1996 survey. Based on responses
of 87 federal agencies to that survey, the percentage of federal agencies
making ADR available had risen to 49.20 We found, however, that in using
percentages to compare the availability of ADR in the private and public
sectors, a significant difference should be kept in mind. According to our
July 1995 report, private firms using ADR generally made it available
organizationwide. But as our review of the literature, our interviews with
experts and knowledgeable officials, and our case illustrations showed,
ADR availability or use was not pervasive—or even necessarily
widespread—within federal agencies that reported having some ADR
capability.

Private firms also reported that they made available a wider variety of ADR
techniques than those reported by federal agencies. For example, our
July 1995 report showed that of the private firms using ADR in 1994, about
80 percent used mediation, about 39 percent used peer review panels, and
about 19 percent used arbitration. But according to both EEOC’s 1994 and
1996 surveys, most federal agencies using ADR made only one technique
available: mediation.

17
 Employment Discrimination: Most Private-Sector Employers Use Alternative Dispute Resolution
(GAO/HEHS-95-150, July 5, 1995).
18
  This figure includes the use of mediation, peer review, and arbitration. The survey did not include
questions relating to the use of ombudsmen or management review boards. However, because very
few of the survey respondents included these techniques in response to a survey question asking if any
other dispute resolution methods were used, we believe that the estimate of private sector ADR use
would be only marginally higher to account for companies with an ombudsman or management review
board as their only ADR technique. In addition, this figure does not include the use of negotiation and
fact-finding, which were widely practiced in the private sector. Under the Administrative Dispute
Resolution Act of 1996, “settlement negotiations” are no longer considered an ADR technique because
(1) they do not use a neutral third party and (2) Congress wanted to clarify that standard negotiations
did not fulfill the intent of the act, according to a former ACUS official.
19
   Cited in ADR Study, U.S. Equal Employment Opportunity Commission, Office of Federal Operations,
Oct. 1996.
20
   ADR Study, U.S. Equal Employment Opportunity Commission, Office of Federal Operations, Oct.
1996.



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                         The availability of ADR techniques among our case illustrations was
                         consistent with the findings of previous reports and surveys. As shown in
                         table 2, the private firms we studied generally used a wider variety of ADR
                         techniques than did the federal agencies. The private firms we studied had
                         from two to five ADR methods in place, while the federal agencies generally
                         had only one. The private firms we studied applied ADR to all types of
                         workplace disputes; all but one of the federal agencies we studied—Walter
                         Reed Army Medical Center—tended to limit the application of ADR to
                         claims of discrimination.


                         No comprehensive evaluative data were available on ADR results in the
Comprehensive Data       private and federal sectors, but the information we gathered in our broad
Were Lacking, but        examination of ADR was largely positive, as was the additional information
ADR Programs Were        we gathered in our case illustrations. The experiences of the specific
                         organizations we studied was consistent with the findings of earlier
Perceived as             reports, surveys, and literature. Although these organizations varied in the
Beneficial               extent to which they had evaluated their ADR programs, officials at all of
                         them generally believed these programs had been beneficial in resolving
                         workplace disputes.

                         Most of the organizations we studied had data to show that their ADR
                         processes, especially mediation, resolved a high proportion of disputes,
                         thereby helping them avoid formal redress processes and litigation.
                         Objective data were not generally available on the time and cost savings
                         achieved by avoiding formal redress and litigation, nor on how the costs of
                         dispute resolution involving ADR compared with the costs of more
                         traditional methods. For the most part, however, managers believed that
                         avoiding formal redress and litigation saved their organizations time and
                         money. The organizations also reported that user satisfaction—another
                         indicator of effectiveness or the lack of it—was generally high, with the
                         exception of supervisors who participated in the Department of
                         Agriculture’s dispute resolution boards.


ADR—Especially           To the extent data were available at the organizations we studied,
Mediation—Appeared to    mediation, peer panels, management review and dispute resolution
Be Useful in Resolving   boards,21 and arbitration all appeared to be useful in resolving workplace
                         disputes, thereby avoiding more formal dispute resolution processes.22
Disputes
                         21
                          Officials at Agriculture found Dispute Resolution Boards were helpful with the discrimination
                         complaint inventory. The boards were criticized, however, as being labor intensive and expensive and
                         not dealing with the underlying issues in disputes. (See app. VII.)
                         22
                           A case was considered resolved if it was either settled or dropped.



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                                      Mediation appeared particularly useful. Table 3, which includes all of the
                                      organizations we examined that offered mediation, shows that mediation
                                      led to a high percentage of resolutions (at least 59 percent) in all but one.

Table 3: Experiences of Private
Companies and Federal Agencies That                                                                          Cases    Cases Percent
Used Mediation                        Organization                    Time frame involved                  mediated resolved resolved
                                      Private Sectora
                                      Brown & Root                    June 1993 to Dec. 1996                      155         140             90
                                      TRW                             Jan. 1995 to Sept. 1996                       27          16            59
                                      Federal agencies
                                      Air Force                       Oct. 1995 to Sept. 1996                   1,982b      1,455b            73
                                      Postal Service,                 Oct. 1994 to Dec. 1996
                                      North Florida                                                               188         139             74
                                      Postal Service,                 Oct. 1988 to June 1992,
                                      Southern California             Oct. 1993 to June 1994,
                                                                      and
                                                                      Oct. 1994 to Sept. 1996                   1,714       1,605             94
                                      State                           May 1995 to Dec. 1996                          8           3            38
                                      Walter Reed Army                Oct. 1994 to Sept. 1996
                                      Medical Center                                                              160         108             68
                                      a
                                       Polaroid routinely offered mediation but did not provide data.
                                      b
                                          Predominately mediation but includes other early stage ADR techniques.

                                      Source: Data provided by the organizations studied.



                                      The Seattle Interagency ADR Consortium is not included in table 3 because
                                      it is neither a company nor a federal agency. The Consortium reported
                                      resolving 153 of 171 cases (89 percent) mediated between May 1993 and
                                      February 1997. Overall, the reported resolution rates for the Seattle
                                      Interagency ADR Consortium and the private and federal organizations
                                      using mediation were similar to rates reported in the literature and in past
                                      studies. The Justice Center of Atlanta, for example, reported a resolution
                                      rate of about 70 percent among the more than 50,000 cases it has mediated
                                      since 1977.23 The private sector organizations we studied applied
                                      mediation to a variety of workplace disputes, but whether the resolution
                                      rates varied with the nature of the dispute was unknown. Among the
                                      federal agencies we studied, only one—Walter Reed Army Medical
                                      Center—applied mediation to a variety of workplace disputes. At Walter
                                      Reed’s ADR Center, the resolution rate varied with the nature of the


                                      23
                                        The Justice Center of Atlanta is a private, nonprofit organization recognized as one of the leading
                                      institutions in the United States for the practice and teaching of mediation.



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dispute: 83 percent for disputes that the center classified as
“communication” cases, 67 percent for EEO cases, and 43 percent for cases
involving disciplinary actions. The other three agencies using mediation
generally used this technique almost exclusively in cases of alleged
discrimination.24

Among three of the four federal agencies we studied with experience in
mediation, the limited data available suggested that mediation was more
useful than the traditional processes for resolving discrimination
complaints. For example, data from the Postal Service’s Southern
California EEO Processing Center showed that from fiscal year 1988 to
fiscal year 1996, about 94 percent of the informal cases that were mediated
were settled, compared with 57 percent of those that went through
traditional counseling.

Peer panels and management review boards also contributed to bringing
cases to closure at the organizations we examined. Moreover, in the four
private firms, where employees receiving unfavorable decisions through
the peer or management review process could take their complaints to
arbitration, relatively few did. (See Hughes Electronics and Polaroid case
illustrations, apps. III and IV.) The one federal agency we studied that used
a board process to resolve formal discrimination
complaints—Agriculture—collected data on results during a pilot study
and found that of the 32 cases heard, 23 (72 percent) were settled on the
day of the hearing.

Arbitration has not traditionally been one of the procedures made
available to federal employees seeking redress outside the terms of
collective bargain agreements. But, according to the ADR Counsel at the
Federal Mediation and Conciliation Service, the laws and regulations
governing matters appealable to EEOC and MSPB do not prohibit its use. The
Administrative Dispute Resolution Acts of 1990 and 1996 allow federal
agencies to use arbitration if all the parties consent to its use, so long as
the agency does not require any participant to consent to arbitration as a
condition of entering into a contract or obtaining a benefit (e.g.,




24
 Contacting the EEO office and consulting with a counselor is the first step in the federal
discrimination complaint process and is commonly referred to as an “informal” complaint. The
counselor is to explore the nature of the issue, determine whether the basis for the issue is covered
under EEO regulations, conduct a limited inquiry, and attempt to facilitate a resolution. If a resolution
cannot be reached, the employee can file a “formal” written complaint with the agency.



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                         employment).25 The 1996 act also requires that before using binding
                         arbitration, the agency consult with the Department of Justice on its
                         appropriateness. The act also requires that the arbitrator interpret and
                         apply relevant statutory and regulatory requirements, legal procedures,
                         and policy directives.

                         More widely available in the private sector than in the federal sector,
                         arbitration was available to employees outside the collective bargaining
                         process at all five companies we studied.26 All five companies reported
                         that arbitration helped them avoid or reduce the amount of
                         employment-related litigation. Moreover, at Rockwell, the company’s
                         Assistant General Counsel said he believed that in many cases the mere
                         availability of arbitration made it easier for the company and former or
                         current employees to resolve disputes without resorting to either
                         arbitration or litigation. Similarly, TRW and Brown & Root officials told us
                         that having an arbitration program opened the door to settlements; at
                         Brown & Root, 43 of 74 arbitration requests between June 1993 and
                         December 1996 were either settled or dropped without an arbitration
                         decision.


Although Comprehensive   Comprehensive evaluative data on the extent to which ADR has saved time
Data Were Lacking, ADR   and money by avoiding formal redress or litigation in the federal and
Was Perceived to Have    private sectors were not available, largely because (1) most ADR programs
                         are relatively new and (2) time and cost savings have not been widely
Saved Time and Money     tracked or evaluated. Moreover, according to the CPR Institute for Dispute
                         Resolution, there is no central source of information on ADR cost savings
                         and benefits (or even the typical costs of litigation) in the private sector.27
                         An official of the American Arbitration Association said that information
                         about ADR cost savings and benefits in the private sector is limited because
                         companies are not always forthcoming with proprietary data and because
                         many companies’ ADR programs are relatively new. Similarly, there is no

                         25
                           At the time of our review, Agriculture was considering the recommendation of an agency study to
                         incorporate voluntary binding arbitration into its dispute resolution program on an interim basis to
                         deal with its backlog of discrimination cases. Also, under authority contained in legislation exempting
                         it from most federal personnel laws, the Federal Aviation Administration has established a
                         three-member panel to hear appeals made by its nonbargaining unit employees of adverse personnel
                         actions previously appealed to MSPB. The panel is composed of a management representative, an
                         employee representative, and an arbitrator.
                         26
                          At Brown & Root, Hughes Electronics, and Rockwell, use of arbitration in lieu of litigation is a
                         condition of employment (see apps. II, III, and V). At Polaroid and TRW, arbitration is not mandatory,
                         but employees are expected to use arbitration before taking a matter to court, and the firm will, if
                         necessary, seek a court order compelling the employee to do so (see apps. IV and VI).
                         27
                           ADR Cost Savings and Benefits Studies, CPR Institute for Dispute Resolution, 1994.



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central source of information on ADR cost savings and benefits in the
federal sector. Before ACUS was abolished in October 1995, it reported on
the status of federal government ADR initiatives, stating that “there are few
measurable data documenting hard savings or substantive impact. This is
true in part because many programs are still quite new; however,
developing this type of information has proven difficult even for
established programs.”28

Likewise among the five private firms and five federal agencies we studied,
data generally were not available on the time and cost savings achieved by
avoiding redress and litigation through ADR, nor on how the costs of
dispute resolution involving ADR compared with the costs of more
traditional methods. Nevertheless, managers said they generally believed
that by avoiding redress and litigation, ADR saved their organizations time
and money.

Regarding time saved by the speedier resolution of disputes, data from two
of the federal agencies we studied indicated that the use of ADR had
decreased the time it had normally taken to resolve discrimination
complaints by between 36 and 52 percent. (See case illustrations for
Agriculture and Air Force, apps. VII and VIII.) Data from two other
agencies indicated that ADR processes, by resolving discrimination
complaints in their early stages, had reduced the number of formal
complaints filed as well as the time required for seeing them through to
resolution. (See case illustrations for Postal Service and Walter Reed,
apps. IX and XI.)

Regarding cost savings, objective information was sparse. Among the
private companies we studied, Brown & Root provided the most extensive
information. (See app. II.) In the first 3 years in which it used ADR, Brown
& Root reported that the overall cost of dealing with workplace disputes
(including the annual cost of the ADR program itself) was less than half of
what the company had been accustomed to spending on legal fees for
employment-related litigation.

Cost savings among federal agencies were as difficult to determine as
those among private firms. No federal agency quantified with precision
cost savings from ADR. The primary reason may be reflected in the
experience of Agriculture, the only federal agency in our study that
evaluated costs. Agriculture’s pilot evaluation team, which attempted to


28
 Toward Improved Agency Dispute Resolution: Implementing the ADR Act, Administrative
Conference of the United States, Feb. 1995.



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                             compare the costs of Agriculture’s Dispute Resolution Boards with the
                             traditional dispute resolution process for EEO complaints, found that it
                             could not do so with any precision because of the lack of detailed records.
                             (See app. VII.) The team reported that estimates of complaint processing
                             costs under traditional procedures were inconsistent and that there were
                             no data with which to track the costs of cases processed by the boards.
                             With this caveat, the team reported “it seems fairly certain” that EEO
                             complaint-processing costs using boards were less than those under the
                             traditional process. However, when settlement costs were considered, it
                             was unclear whether boards were less costly because board-facilitated
                             settlements were more costly than settlements and decisions in a
                             comparison group of cases handled by the traditional process. The team
                             said that creating an accurate recordkeeping system would be critical to
                             the operation of the boards as well as to the EEO complaint system as a
                             whole.


Reported User Satisfaction   Comprehensive data on user satisfaction with ADR was not available for
Generally Was High at the    the private or federal sectors. Among the organizations we studied,
Organizations We Studied     five—Brown & Root, Hughes Electronics, Postal Service, Agriculture, and
                             Walter Reed—had surveyed their ADR program users. Brown & Root
                             reported that users were satisfied with its procedures while Hughes did
                             not provide the results of its surveys. (See apps. II and III.) Two of the
                             three federal agencies also reported generally high user satisfaction, but
                             Agriculture reported significant disparities among the parties to disputes.

                             The Postal Service’s survey approach was unique in that it compared
                             satisfaction rates among mediation users (in this case, at its North Florida
                             pilot) with those among participants in the traditional EEO process (at
                             other Postal Service locations). The Postal Service surveys found, for
                             example, that 90 percent of the mediation users believed that the process
                             was fair, compared with 41 percent of the participants in the traditional
                             EEO process. Further, 72 percent of mediation users were satisfied with the
                             outcomes of their disputes, compared with 40 percent of the participants
                             in the traditional process. (See app. IX.)

                             Unlike the Postal Service surveys, Walter Reed’s surveys were not
                             comparative. Further, only employee participants in the program were
                             surveyed. Of the survey respondents, 90 percent rated the overall
                             performance of the ADR program and of the mediators themselves from
                             good to excellent, 73 percent indicated that they would use the program




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                          again, and 72 percent indicated that they would recommend the program
                          to others. (See app. XI.)

                          Agriculture’s surveys and focus groups involving participants in its Dispute
                          Resolution Board process revealed that supervisors who had been charged
                          with discrimination had less favorable opinions of the process than did
                          employees and resolving officials.29 For example, 42 percent of the
                          supervisors did not believe the process to be fair, compared with
                          17 percent of the employees and 15 percent of the resolving officials.
                          Moreover, 53 percent of the supervisors were dissatisfied with the
                          outcomes of their disputes, compared with 25 percent of the employees
                          and 30 percent of the resolving officials. According to Agriculture officials,
                          supervisors felt the Dispute Resolution Board process undermined their
                          authority. They also said that a “settle at all costs” policy encouraged
                          employees to file complaints. A recent Agriculture report recommended
                          significant changes in Agriculture’s ADR program, including discontinuing
                          boards. Agriculture discontinued the boards in April 1997. (See app. VII.)


                          As reflected in the case illustrations (see apps. II-XII), the companies and
The Case Illustrations:   federal agencies we studied took various approaches to planning and
Varied but Generally      implementing ADR. Most of them made efforts to involve employees in
Positive Experiences      developing their ADR programs, to train key participants, and to make their
                          ADR programs known and understandable throughout the organization.
With ADR Were             Because the private firms were not subject to the rules that govern the
Reported                  federal employee administrative redress system, some of them had
                          established ADR practices—particularly in the area of arbitration—that are
                          not found among federal agencies. These practices varied from one
                          company to the next. While most of the organizations we studied gave only
                          limited attention to formally evaluating their ADR programs, the common
                          thread among our case illustrations was a continuing use of ADR and a
                          perception that ADR was worthwhile. The lessons learned by these
                          organizations in planning, implementing, and evaluating their ADR
                          programs centered on how to ensure that the appropriate ADR methods
                          were used and that they fulfilled their potential.




                          29
                           Under the Dispute Resolution Board process, a “resolving official” representing the department
                          would be present to negotiate a settlement with the employee.



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Efforts to Involve          The organizations we studied varied in the ways in which they involved
Employees and Train Key     their employees in planning their ADR programs as well as how they made
Staff Were Widespread but   employees aware of these programs. The extent to which these
                            organizations involved and trained their employees related to whether
Varied                      they were overhauling their dispute resolution systems or adding or
                            integrating into their existing systems a particular ADR technique. Although
                            nine of the organizations involved their employees in designing their ADR
                            programs, and all but Agriculture provided training to employees and
                            managers who would play key roles in the ADR process, some provided
                            greater opportunities for involvement or more widespread or extensive
                            training than others.

                            Officials at nine of the organizations we studied reported that measures
                            had been taken to make their ADR processes known and understandable to
                            employees. When Hughes Electronics, for example, initiated its dispute
                            resolution boards, it not only trained prospective board members in their
                            duties, but it trained executives and managers throughout the company in
                            conflict resolution techniques and introduced all employees to the new
                            program through brochures, newsletters, and supervisory guidance,
                            according to the Corporate Manager for Equal Employment Opportunity
                            and Workforce Diversity Programs. To introduce its pilot mediation
                            program, the Postal Service conducted two 1-week conferences for
                            managers, trained staff as mediators in each location, and developed a
                            video about the program. Walter Reed gave mediation training to its ADR
                            Center staff, which then conducted numerous briefings for employees. In
                            addition, Walter Reed’s commander issued a memorandum explaining the
                            ADR program and encouraging its use.



Organizations Took          Of the five main ADR methods we identified, the most widely available
Differing Approaches to     were mediation and arbitration. Seven of the organizations we studied
ADR                         reported routinely making mediation available; the differing ways in which
                            they implemented their mediation programs illustrated a variety of
                            possible approaches. All five of the companies we studied offered
                            arbitration, which, as noted earlier, is generally unavailable to federal
                            employees outside the collective bargaining process. The arbitration
                            policies of the five companies illustrated some key differences between
                            their redress systems and those of the federal agencies we studied.

                            Mediation was the most widely used technique among the organizations
                            we studied. Most of the organizations reported using both internal and
                            external mediators. Among the private firms, for example, Brown & Root



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and Polaroid reported they used their own employee volunteers as
mediators most of the time. However, employees at these companies could
ask for a mediator from an external source (such as the American
Arbitration Association). Among the federal agencies, the Air Force
selected mediators according to the issues involved—its practice is to
assign mediators to the kinds of cases in which they specialized—and gave
some consideration to the preference of the parties involved. The mediator
could be an EEO counselor trained in mediation or an external mediator
from another Air Force installation, another federal agency, a contractor,
or a “shared neutrals” program. A shared neutrals program, such as the
Seattle Interagency ADR Consortium (see app. XII) is a cooperative venture
in which federal agencies create a pool of mediators who are available to
agencies that do not have their own mediators or that want a mediator
from outside the agency.

Variation existed in the types of issues that were subject to mediation and
in the point at which an employee could elect to use it. Two of the three
private sector companies that reported they regularly used
mediation—Brown & Root and Polaroid—offered mediation for a wide
array of issues and at any point in the dispute resolution process. The
other company, TRW, usually offered external mediation as a step before
arbitration. Among the federal agencies, the Walter Reed Army Medical
Center was alone in having established mediation for a wide array of
disputes. The others generally reported confining the use of mediation to
discrimination and to a point very early in the discrimination complaint
process. This point occurred after an employee had contacted his or her
agency’s EEO office (the first step in the federal discrimination complaint
process) but before the employee had filed a formal complaint. Among the
agencies we studied, mediation was offered at this point as an alternative
to the counseling that is required by the regulations governing the
discrimination complaint process.

Just as federal employees are generally expected to exhaust the
administrative processes available to them before going to court,30
employees of the private companies we studied were expected by their
employers to use arbitration before initiating a lawsuit. In some ways,
arbitration is to the private sector what the administrative redress system
is to the federal sector: for example, both are adjudicatory in nature and
intended to provide due process, and both are meant to provide employees
with a means of being heard on issues that could be taken to court. But the
arbitration policies of the private firms we studied provided at least two

30
  29 C.F.R. Part 1614.



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examples of ways in which this private sector dispute resolution method
can differ significantly from the federal government’s approach.

First, at three of the firms we studied—Brown & Root, Hughes
Electronics, and Rockwell—employees were required, as a condition of
employment, to use arbitration in lieu of litigation to settle disputes. (See
apps. II, III, and V.) At each of these three firms, the arbitrator’s decision
was binding on both the company and the employee. The employee’s
judicial recourse was limited to petitioning a court to review the
arbitration decision.31 In contrast, federal employees have recourse to the
administrative redress process and the courts. A discrimination
complainant who is dissatisfied with the available administrative remedies
may take his or her case to federal district court for a de novo32 trial.

Second, all five of the private companies we studied required their
employees to share in the costs of arbitration. In contrast, federal
employees do not share in the costs of the administrative redress
processes available to them.33 Officials at each of the firms we studied said
the requirement that employees share in the costs of arbitration was
intended to ensure the impartiality of arbitrators as well as to discourage
frivolous complaints. Sharing of arbitration costs by employees and
employers was one of the key quality standards for private arbitration
recommended by the Commission on the Future of Worker-Management
Relations.

So that they would not discourage legitimate complaints, four of the
private firms we studied charged employees only a nominal fee or capped
the employee’s share. Two companies imposed a nominal fee: Brown &
Root required employees to pay $50; Polaroid required them to pay $100.
The other three companies—Hughes, Rockwell, and TRW—required
employees to pay up to half of the arbitration costs. But TRW capped the
employee share at 2 days’ gross pay, and Hughes limited the employee



31
 EEOC opposes mandatory binding arbitration as a condition of employment because it views such
policies as interfering with individual protected rights under civil rights statutes. Employers with
mandatory binding arbitration, such as the companies we studied, believe that arbitration does not
impinge on the substantive rights of employees.
32
  In a de novo trial, a matter is tried anew as if it had not been heard before.
33
  In addition to sharing in arbitration costs, workers at the five private sector companies are
responsible for their attorney fees and the costs of discovery that they initiate. Similarly, federal
workers are responsible for their attorney fees, costs of discovery that they initiate, and related
expenses, such as for copying and mailing. Generally, employees can recover these expenses if they
are the prevailing party.



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                            B-274297




                            share to 2 weeks’ net pay in cases of hardship. Rockwell did not cap the
                            employee’s share.


Evaluation Was Generally    Most of the organizations we studied gave only limited attention to
Not Extensive, but          formally evaluating their ADR programs. Among the companies, the
Organizations Continued     evaluation efforts reported by Brown & Root were the most extensive,
                            including routine data gathering on program costs and benefits and
Using ADR and Believed It   employee satisfaction as well as annual evaluations by persons outside the
Was Worthwhile              firm (see app. II). Among the federal entities, the Postal Service had under
                            way an extensive evaluation by an outside consultant, and the Air Force
                            had an evaluation in the design stage. Agriculture had evaluated its
                            Dispute Resolution Boards in the pilot phase but not in the 3 years in
                            which the boards operated. More recently (between December 1996 and
                            February 1997), Agriculture’s Civil Rights Action Team conducted 12
                            “listening sessions” that included an opportunity to hear participants’
                            perceptions of the board process. This was not an evaluation per se, but
                            led to recommendations that resulted in discontinuing the boards (see
                            app. VII).

                            Although extensive evaluation has generally been lacking, the
                            organizations we studied, as discussed earlier, almost all had positive
                            perceptions of the results of their ADR programs. To the extent data were
                            available, they supported these perceptions, including the belief that ADR
                            lessened the costs—in time and money—associated with formal redress
                            processes and litigation. Brown & Root, as discussed earlier, reported that
                            in the first 3 years of ADR use, the overall cost of dealing with workplace
                            disputes (including the annual cost of the ADR program itself) was less than
                            half of what it had been just for legal fees to cover employment-related
                            litigation. Brown & Root also reported that the number of
                            employment-related lawsuits had been reduced to nearly zero, and the
                            number of cases filed with the EEOC or similar entities had been reduced
                            by half. While other organizations had only limited data, they said they
                            believed that early resolution of disputes and the avoidance of formal
                            redress and litigation not only saved time but avoided costs as well.
                            Perhaps the best indicator of the organizations’ belief in ADR was that all of
                            them continued to use some form of ADR.

                            The only instance among our case illustrations in which the operation of
                            an ADR program was found to be seriously flawed was at Agriculture,
                            where the report of the Civil Rights Action Team recommended that
                            dispute resolution boards be discontinued (see app. VII). The same report



                            Page 25                                     GAO/GGD-97-157 ADR In the Workplace
                       B-274297




                       recommended that Agriculture use more interest-based ADR techniques
                       outside the EEO process and that mediation and voluntary binding
                       arbitration be used.


Organizations Cited    The organizations we studied each cited lessons learned in planning,
Lessons About Making   implementing, and evaluating their ADR programs. These lessons were
ADR Work               varied, but many of them centered on ensuring that the appropriate ADR
                       methods were used and that they fulfilled their potential.

                       Six of the organizations reported emphasizing the need for visible support
                       of ADR by top management, citing the difficulty of marketing and sustaining
                       ADR efforts in its absence. Four of the organizations said they had learned
                       the importance of involving employees in the development of their ADR
                       programs. One reason was to ensure that the choice of ADR approaches
                       meshed with the organization’s culture; another was to establish trust in
                       the ADR process.

                       Six of the organizations said they learned that dispute resolution efforts
                       have a greater likelihood of success if they occur early in a dispute before
                       positions have solidified and underlying interests have been obscured.
                       Postal Service officials, for example, said their organization had this lesson
                       in mind when it adopted a policy of providing mediation of complaints
                       within approximately 2 weeks of a request for mediation services (see app.
                       IX). Agriculture, having found that its dispute resolution boards did not
                       deal with the underlying issues in workplace disputes, has begun giving
                       mediation training to its counselors and developing a conflict resolution
                       policy that encourages early intervention (see app. VII).

                       Two federal agencies—Walter Reed and Agriculture—said they learned
                       that special care must be given to balancing the desire to settle and close
                       cases against the need for fairness to employees and managers alike. For
                       example, at Walter Reed, where the ADR program received largely positive
                       responses in its employee participant surveys, the dispute resolution
                       officer said he had learned that some supervisors viewed settlements with
                       suspicion, feeling that settlements seemed to “give away the store.” As a
                       result, he said, resolving officials at Walter Reed have become more
                       judicious in making settlements. (See app. XI.)

                       Five organizations reported finding that ADR served a purpose merely by
                       giving employees an opportunity to be heard. Employees, they said, got
                       something worthwhile merely out of having their “day in court.” Further,



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                  B-274297




                  four organizations also reported finding that by following the outcomes of
                  ADR processes, management became more aware of the causes of
                  workplace disputes, of the organizational policies or decisions that led to
                  complaints, and of systemic concerns that had not otherwise been
                  apparent. Brown & Root’s Associate General Counsel for Human
                  Resources, for example, said some of the mediation settlements and
                  arbitration awards alerted management to problems within the company,
                  and this brought about changes in its sexual harassment and drug testing
                  policies and procedures (see app. II).


                  We sent copies of a draft of this report to the Chairman, EEOC; the Director,
Agency Comments   FMCS; and the Director, OPM for review and comment. In addition, we asked
                  cognizant officials from each case illustration organization to review and
                  comment on a draft of the case illustration describing their respective
                  organization’s ADR experiences. We received responses from all
                  organizations except Polaroid; their comments were of a technical or
                  clarifying nature. We considered the comments and made changes as
                  appropriate in finalizing this report.


                  We are sending copies of this report to the Ranking Minority Member of
                  this Subcommittee; to the Chairmen and Ranking Minority Members of the
                  House Committee on Government Reform and Oversight and the Senate
                  Committee on Governmental Affairs and its Subcommittee on
                  International Security, Proliferation, and Federal Services; and the
                  Directors of the Office of Personnel Management, the Federal Mediation
                  and Conciliation Service, and the Office of Management and Budget; the
                  Chairman of the Equal Employment Opportunity Commission; and other
                  interested parties. We will also make this report available to others upon
                  request.




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B-274297




Major contributors to this report are listed in appendix XIII. Please contact
me at (202) 512-9039 if you or your staff have any questions concerning
this report.

Sincerely yours,




Michael Brostek
Associate Director, Federal Management
  and Employment Issues




Page 28                                    GAO/GGD-97-157 ADR In the Workplace
Page 29   GAO/GGD-97-157 ADR In the Workplace
Contents



Letter                                                                                         1


Appendix I                                                                                    34

Objectives, Scope,
and Methodology
Appendix II                                                                                   38
                       How the Processes Work                                                 38
Case Illustration:     Experiences in Developing ADR Processes                                39
Brown & Root, Inc.     Resolving Workplace Disputes and Lessening the Time and Costs          40
                         Associated With Redress and Litigation
                       Lessons Learned by the Organization                                    41

Appendix III                                                                                  42
                       How the Processes Work                                                 42
Case Illustration:     Experiences in Developing ADR Processes                                43
Hughes Electronics     Resolving Workplace Disputes and Lessening the Time and Costs          44
                         Associated With Redress and Litigation
Corporation            Lessons Learned by the Organization                                    44

Appendix IV                                                                                   46
                       How the Processes Work                                                 46
Case Illustration:     Experiences in Developing ADR Processes                                47
Polaroid Corporation   Resolving Workplace Disputes and Lessening the Time and Costs          47
                         Associated With Redress and Litigation
                       Lessons Learned by the Organization                                    48

Appendix V                                                                                    49
                       How the Processes Work                                                 49
Case Illustration:     Experiences in Developing ADR Processes                                50
Rockwell               Resolving Workplace Disputes and Lessening the Time and Costs          50
                         Associated With Redress and Litigation
International          Lessons Learned by the Organization                                    51
Corporation




                       Page 30                                GAO/GGD-97-157 ADR In the Workplace
                           Contents




Appendix VI                                                                                       53
                           How the Processes Work                                                 53
Case Illustration: TRW     Experiences in Developing ADR Processes                                54
Inc.                       Resolving Workplace Disputes and Lessening the Time and Costs          55
                             Associated With Redress and Litigation
                           Lessons Learned by the Organization                                    55

Appendix VII                                                                                      57
                           How the Process Works                                                  57
Case Illustration: U. S.   Experiences in Developing the ADR Process                              58
Department of              Resolving Workplace Disputes and Lessening the Time and Costs          58
                             Associated With Redress and Litigation
Agriculture                Lessons Learned by the Organization                                    59

Appendix VIII                                                                                     61
                           How the Process Works                                                  61
Case Illustration: U.S.    Experiences in Developing the ADR Process                              61
Air Force                  Resolving Workplace Disputes and Lessening the Time and Costs          63
                             Associated With Redress and Litigation
                           Lessons Learned by the Organization                                    63

Appendix IX                                                                                       65
                           How the Process Works                                                  65
Case Illustration: U. S.   Experiences in Developing the ADR Process                              65
Postal Service             Resolving Workplace Disputes and Lessening the Time and Costs          67
                             Associated With Redress and Litigation
                           Lessons Learned by the Organization                                    67

Appendix X                                                                                        69
                           How the Processes Work                                                 69
Case Illustration: U. S.   Experiences in Developing ADR Processes                                70
Department of State        Resolving Workplace Disputes and Lessening the Time and Costs          71
                             Associated With Redress and Litigation
                           Lessons Learned by the Organization                                    72




                           Page 31                                GAO/GGD-97-157 ADR In the Workplace
                        Contents




Appendix XI                                                                                     73
                        How the Process Works                                                   73
Case Illustration:      Experiences in Developing the ADR Process                               73
Walter Reed Army        Resolving Workplace Disputes and Lessening the Time and Costs           74
                          Associated With Redress and Litigation
Medical Center          Lessons Learned by the Organization                                     75

Appendix XII                                                                                    77
                        How the Process Works                                                   77
Case Illustration:      Experiences in Developing ADR Resources                                 78
Seattle Interagency     Resolving Workplace Disputes and Lessening the Time and Costs           79
                          Associated With Redress and Litigation
ADR Consortium          Lessons Learned by the Organization                                     79

Appendix XIII                                                                                   81

Major Contributors to
This Report
Tables                  Table 1: Predominant ADR Methods                                        12
                        Table 2: ADR Techniques Used by Selected Private Companies              13
                          and Federal Agencies
                        Table 3: Experiences of Private Companies and Federal Agencies          16
                          That Used Mediation




                        Abbreviations

                        AAA        American Arbitration Association
                        ADR        alternative dispute resolution
                        ACUS       Administrative Conference of the United States
                        EEAC       Equal Employment Advisory Council
                        EEO        equal employment opportunity
                        EEOC       Equal Employment Opportunity Commission
                        FMCS       Federal Mediation and Conciliation Service
                        MSPB       Merit Systems Protection Board
                        OPM        Office of Personnel Management
                        S/EEOCR    U.S. Department of State Office of Equal Employment
                                        Opportunity and Civil Rights


                        Page 32                                 GAO/GGD-97-157 ADR In the Workplace
Page 33   GAO/GGD-97-157 ADR In the Workplace
Appendix I

Objectives, Scope, and Methodology


              In his letter of July 1, 1996, the Chairman of the Subcommittee on Civil
              Service, House Committee on Government Reform and Oversight, asked
              us to assist the Subcommittee in its efforts to reform the administrative
              redress system for federal employees by developing information about
              federal and private sector experiences in using alternative dispute
              resolution (ADR) processes to resolve workplace disputes. Specifically, he
              asked us to provide information on (1) private sector companies’ and
              federal agencies’ reasons for using ADR, (2) the types of ADR these
              organizations have made available to their employees through procedures
              other than those under collective bargaining agreements and the extent to
              which they have put ADR processes in place, and (3) the results, if any, they
              have achieved by using ADR. In addition, he asked that we illustrate the
              practices of selected federal agencies and private sector firms in using ADR
              processes to resolve workplace disputes for employees not covered under
              collective bargaining agreements by addressing the following questions.

              1. What were the experiences of the selected federal and private sector
              employers in planning and implementing ADR processes?

              2. To what extent did these employers evaluate their ADR processes and to
              what extent did they believe that their ADR practices have been successful
              in resolving workplace disputes and in lessening the costs—in time and
              money—associated with formal redress procedures and litigation?

              3. What lessons did the selected agencies and companies report that they
              learned in planning, implementing, and evaluating their ADR processes?

              Because of the Chairman’s interest in reforming the federal employee
              redress system, we primarily focused on ADR use in the types of disputes
              that federal employees can appeal to the Merit Systems Protection Board
              (MSPB) or the Equal Employment Opportunity Commission (EEOC), and not
              those generally grieved under collective bargaining procedures. For the
              private sector, we developed information about ADR processes for
              employees not covered under collective bargaining agreements.

              To develop information about federal agencies’ and private sector
              companies’ reasons for using ADR, the types of ADR they have made
              available other than those under collective bargaining agreements, the
              extent to which they have put these processes in place, and results derived
              from using ADR, we reviewed available literature and spoke to experts in
              the field. Among the experts with whom we spoke were officials from
              MSPB, EEOC, the Office of Personnel Management (OPM), the Administrative




              Page 34                                    GAO/GGD-97-157 ADR In the Workplace
Appendix I
Objectives, Scope, and Methodology




Conference of the United States (ACUS), the National Academy of Public
Administration, the Federal Mediation and Conciliation Service (FMCS), the
American Arbitration Association (AAA), the CPR Center for Dispute
Resolution, and the Equal Employment Advisory Council (EEAC). To
develop information about the types of ADR processes offered by federal
employers and the extent to which these processes are offered, we used
the results of EEOC surveys of federal agencies that were reported in
February 1994 and October 1996.34 To develop information about the types
of ADR processes offered by private sector employers and the extent to
which these processes are offered, we used the results from one of our
surveys.35

In identifying the predominant ADR methods used in the private and federal
sectors, we applied definitions based on materials developed by OPM and
ACUS. Because ADR is an evolving field, there is some inconsistency among
practitioners in the terms they use to describe their ADR approaches. For
this reason, we occasionally grouped different organizations’ ADR
approaches under the same names, although the organizations themselves
called these approaches by different names. We discussed this practice
with each of the affected organizations and obtained their concurrence.

To illustrate private and federal sector organizations’ experiences in
planning and implementing ADR processes, the extent to which they
evaluated their ADR processes and the extent to which they reported that
these processes have been successful in resolving workplace disputes and
lessening costs, and the lessons they reported having learned, we
judgmentally selected for study five private sector companies and five
federal agencies that had had some experience with ADR. Because there is
no readily identifiable inventory of federal and private sector36 ADR users,
we used a variety of methods to identify candidates for case illustrations.
To identify federal agencies using ADR, we reviewed surveys of federal
agencies by EEOC and ACUS, reviewed literature about federal agencies
using ADR, reviewed information that federal agencies reported to EEOC,
and spoke to officials knowledgeable about ADR use in the federal
government, including officials from MSPB, EEOC, OPM, ACUS, and FMCS. To
identify private sector companies using ADR, we reviewed available

34
   EEO ADR Survey (Feb. 1994) and ADR Study (Oct. 1996), U.S. Equal Employment Opportunity
Commission, Office of Federal Operations.
35
 We sent a questionnaire to a nationally representative sample of businesses with more than 100
employees according to reports filed with EEOC in 1992. The results of this survey were reported in
Employment Discrimination: Most Private-Sector Employers Use Alternative Dispute Resolution
(GAO/HEHS-95-150, July 5, 1995).
36
 Our survey reporting the percentage of private sector employers using ADR did not include the
names of companies.


Page 35                                                   GAO/GGD-97-157 ADR In the Workplace
Appendix I
Objectives, Scope, and Methodology




literature and spoke to experts on the private sector’s use of ADR, including
officials from the AAA, CPR Center for Dispute Resolution, and EEAC.

We judgmentally selected agencies and companies (1) that reflected a
range of ADR practices; (2) that had ADR processes in place a sufficient
length of time to provide information about use, outcome, and lessons
learned; and (3) that had at least some use or outcome data available. The
federal agencies we selected were the Department of Agriculture, the
Department of the Air Force, the Postal Service, the Department of State,
and Walter Reed Army Medical Center. We included the Postal Service,
even though it is an independent governmental establishment, because it is
bound by most of the same rules governing the resolution of
discrimination complaints that apply to most other agencies. We also
studied the Seattle Federal Executive Board’s Interagency ADR
Consortium, a shared neutrals program in the Seattle, WA area, because it
is a cooperative interagency effort to make mediation services available at
little or no cost to users. In the private sector, we studied the following
large companies: Brown & Root, Inc; Hughes Electronics Corporation; the
Polaroid Corporation; Rockwell International Corporation; and TRW Inc.
Our final selection of companies was dependent on their willingness to
participate in the study. We obtained information about the organizations
either on-site or from telephone interviews with responsible agency and
company officials, material and data that they provided (e.g., policies,
procedures, employee handbooks, statistical information, and
evaluations), and published information.

There are five limitations to the information we present in this report.
First, the case illustrations and the observations that we are reporting are
not representative of a broader universe. They are intended only to
illustrate ADR approaches that have been put into practice and that have, to
some extent, reported demonstrable results. We do not intend that they be
considered “best practices.” Second, organizations—particularly private
sector companies—identified through literature searches and leads from
experts in the field, are more likely than not to have reported successful
outcomes. While it is possible that some private sector companies have
had poor experiences with ADR, these companies are less likely than others
to have made their experiences public or to have drawn attention to
themselves. Third, while federal agencies are required to cooperate with
us, the participation of the private sector companies in our study was
voluntary. Moreover, the companies reserved the right to withhold
proprietary information, which limited our ability to analyze their
programs with the assurance that we had obtained all relevant data.



Page 36                                    GAO/GGD-97-157 ADR In the Workplace
Appendix I
Objectives, Scope, and Methodology




Fourth, the views we obtained were those of agency and company
management. We report the results of employee or ADR participant surveys
provided by some of the agencies and companies, but we did not directly
obtain the views of employees. Finally, we did not verify data that were
provided to us; some of the data provided was testimonial.

We did our work in Denver, CO; New York, NY; Seattle, WA; and
Washington, D.C. from July 1996 to April 1997 in accordance with
generally accepted government auditing standards.




Page 37                                  GAO/GGD-97-157 ADR In the Workplace
Appendix II

Case Illustration: Brown & Root, Inc.


                    Brown & Root, Inc., headquartered in Houston, Texas, provides
                    construction, engineering, and maintenance services worldwide. Together,
                    its two business units employ about 27,000 people in the United States, all
                    of whom are covered by the company’s alternative dispute resolution
                    (ADR) program.37 The program, implemented in June 1993, includes an
                    ombudsman-like role, mediation, and arbitration as well as a toll-free
                    hotline for employee assistance.


                    A Brown & Root employee unable to resolve a dispute through the chain
How the Processes   of command can contact the dispute resolution program administrator or
Work                an ombudsman—at Brown & Root referred to as an advisor. The advisor
                    (or the program administrator) is to provide independent and confidential
                    assistance to the employee, which can include such things as simply
                    listening to the problem, answering questions, acting as a go-between,
                    getting the facts, coaching the employee on how to independently resolve
                    the problem, and providing referrals to other company resources. The
                    advisors are trained mediators and often provide informal mediation.
                    Should the dispute remain unresolved at this point, the employee can opt
                    for in-house mediation, provided by trained employee volunteers.

                    The next two steps—external mediation and arbitration—are generally
                    used only for issues involving statutorily protected rights. The employee
                    pays a $50 processing fee to take his or her dispute to external mediation
                    or arbitration; Brown & Root pays additional costs.

                    An unusual feature of Brown & Root’s dispute resolution program is its
                    Legal Consultation Plan that provides financial assistance to help
                    employees obtain their own attorneys to assist them in their employment
                    disputes. The employees pay a $25 deductible (for each dispute); the plan
                    then pays 90 percent of the attorney fees, up to a maximum benefit of
                    $2,500 annually.

                    According to Brown & Root’s dispute resolution program brochure, its
                    program is intended as the exclusive means for the final resolution of
                    employment disputes and is mandatory for all employees. The company
                    advised its employees in advance of the program implementation date of
                    June 1993, that by continuing or accepting employment with Brown &
                    Root after this date, they were agreeing to use the program, rather than the
                    court system, to resolve all employment-related claims against the
                    company. Company literature about the program further advises that if an

                    37
                      Called the Brown & Root Dispute Resolution Program.



                    Page 38                                                 GAO/GGD-97-157 ADR In the Workplace
                 Appendix II
                 Case Illustration: Brown & Root, Inc.




                 employee were to file a lawsuit, Brown & Root would ask the court to
                 dismiss the case and refer it to the company’s dispute resolution program.38



                 The impetus for looking for better ways to manage employee conflicts and
Experiences in   resolve employment disputes grew, in part, from “the lawsuit that nobody
Developing ADR   won,” according to the Brown & Root’s Associate General Counsel for
Processes        Human Resources. In this case, the company paid over $400,000 in legal
                 fees to its outside counsel in successfully defending itself in a
                 discrimination suit. The Associate General Counsel said that because of
                 the tremendous financial and human cost of litigation, in the summer of
                 1992, Brown & Root assembled task forces to evaluate its dispute
                 resolution process. These task forces were composed of company
                 managers from the legal, employee relations, and operations functions as
                 well as outside experts and consultants. A conflict management consultant
                 interviewed nearly 300 employees about their views on the existing
                 dispute resolution process and on various alternatives. The program
                 design resulting from the task forces overhauled the company’s dispute
                 resolution system and provided for the installation of processes through
                 which employees could bring their workplace disputes. The program
                 design was approved in February 1993 and was implemented the following
                 June. A communications consulting firm assisted in the marketing effort
                 that included briefings, mailings, and brochures.

                 In implementing the program, Brown & Root established a full-time
                 program administration position39 to oversee the program and trained a
                 cadre of employees who had volunteered to serve, as a collateral duty, as
                 mediators and advisors. Between 125 and 150 employees received 40
                 hours of mediation training; about 75 of them received an additional 10
                 hours of advisor training. The company also provided a 1-day orientation
                 to between 30 and 40 human resource and training staff, who in turn
                 provided training to other company employees. In addition, Brown & Root
                 created two management training programs as part of the implementation
                 strategy: a half-day program on interpersonal conflict management and a
                 16 to 20-hour course on interorganizational conflict management. The rest
                 of Brown & Root’s employees were sent various pieces of literature to
                 educate them about the program.


                 38
                   As of December 1996, Brown & Root had obtained court orders compelling arbitration in three cases.
                 39
                   The program administrator reports to a policy committee made up of the general counsel, employee
                 relations vice president, and the senior U.S. operating officer in addition to other operating officers.



                 Page 39                                                     GAO/GGD-97-157 ADR In the Workplace
                       Appendix II
                       Case Illustration: Brown & Root, Inc.




                       Brown & Root routinely collects and analyzes data to evaluate the costs
Resolving Workplace    and benefits of its dispute resolution program as well as employee
Disputes and           satisfaction. A key indicator of the program’s success is that of achieving
Lessening the Time     prompt resolution early in a dispute, according to the Associate General
                       Counsel for Human Resources. He said that, overall, between 80 and
and Costs Associated   90 percent of disputes are resolved in 2 months or less, mostly through the
With Redress and       advisor program. From June 1993 through December 1996, according to
                       information the company provided, about 88 percent of the 1,600 cases
Litigation             handled were resolved without resorting to formal mediation or
                       arbitration. As of December 1996, 155 cases had been mediated, with a
                       resolution rate of 90 percent. Also as of December 1996, decisions had
                       been made on 31 of 74 arbitration requests, the remainder having been
                       settled or dropped. Arbitration is the lengthiest process, taking from 6 to
                       18 months from the filing of a complaint to the issuing of an arbitration
                       decision.

                       According to information provided by the company, in the dispute
                       resolution program’s first 3 years, the overall cost of dealing with
                       employment conflicts, including the total cost of the program (the
                       program’s current annual budget is about $500,000) is less than half of
                       what the company used to spend on legal fees for employment-related
                       litigations. Legal fees alone are down about 90 percent (for the first 3 years
                       of the program). Settlement costs have remained about the same since the
                       program’s inception, although there have been more settlements under the
                       new program. In addition to the operating costs of Brown & Root’s dispute
                       resolution program, the company invested about $250,000 in development
                       costs, including outside consultant fees, legal fees, and the cost of mailing
                       literature about the program.

                       Another indicator of the program’s success, according to the company’s
                       Associate General Counsel, is that the number of employment-related
                       lawsuits has been reduced to nearly zero, and the number of cases filed
                       with the Equal Employment Opportunity Commission or similar state
                       entities has been reduced by half.

                       Brown & Root employees appear to be satisfied with the program.
                       According to a speech by the Associate General Counsel, confidential
                       anonymous surveys of the users of the dispute resolution program
                       reported satisfaction with its procedures.




                       Page 40                                     GAO/GGD-97-157 ADR In the Workplace
                     Appendix II
                     Case Illustration: Brown & Root, Inc.




                     According to the company’s Associate General Counsel for Human
Lessons Learned by   Resources, Brown & Root has learned several lessons about what makes a
the Organization     dispute resolution program effective. One lesson learned is that
                     management’s unwavering commitment and constant attention are
                     prerequisites to the growth of an effective program. Brown & Root said,
                     for example, that the general counsel’s active role and organizational
                     stature were crucial in launching the program and in maintaining its
                     success. Also, Brown & Root said it learned that the effectiveness of a
                     program is directly related to a company’s investment in training and to its
                     frequency of communication.

                     Also crucial to creating a program that will be widely accepted, in Brown
                     & Root’s experience, is ensuring the users’ involvement in designing the
                     program. The company said it learned that most employees prefer a
                     collaborative dispute resolution process to an adjudicatory one.

                     The company also said it learned that mediation settlements and
                     arbitration awards can alert management to problems within the
                     organization. Upward communication by the dispute resolution program
                     administrator has had a like effect.

                     Finally, Brown & Root said it learned the program has not been subjected
                     to overwhelming use by chronic complainers, and the legal consultation
                     plan has not been a financial burden. As of December 1996, 149 employees
                     had received about $169,000 under the legal consultation program.




                     Page 41                                    GAO/GGD-97-157 ADR In the Workplace
Appendix III

Case Illustration: Hughes Electronics
Corporation

                    The Hughes Electronics Corporation, headquartered in Los Angeles, CA,
                    designs and produces high technology systems for military, scientific, and
                    commercial applications. The company’s various domestic business units
                    employ approximately 69,000 workers—about 84 percent of whom are not
                    covered under a collective bargaining agreement.40 In January 1993,
                    Hughes added to its dispute resolution system41 an ombudsman-like role, a
                    management review board, and an arbitration process for its employees
                    who are not covered under a collective bargaining agreement.42


                    The first step for a Hughes employee who is unable to resolve a grievance
How the Processes   through the chain of command is to talk with an “executive advisor”
Work                whose role is similar to that of an ombudsman. The advisor, whom the
                    employee chooses from a pool of senior executives, helps the employee
                    evaluate the grievance’s merits and attempts to facilitate resolution.
                    Failing resolution, the employee can have a hearing before a management
                    review board (called the Consensus Review Board) composed of three
                    managers outside the chain of management of both the employee and
                    management respondent.43 The board convenes within 60 days of the date
                    of a written complaint, meets with each party separately, and issues its
                    decision usually within 10 working days. The executive advisor may help
                    the employee prepare for the hearing and assist the employee during the
                    hearing. The board can order corrective action, such as rescinding a
                    discharge or modifying a performance rating, but it cannot alter company
                    policy or award monetary damages. Although the company is bound by the
                    board’s decision, the employee may request arbitration if dissatisfied.

                    Arbitration, the final step in Hughes’ dispute resolution process, is
                    mandatory for employees hired after January 1, 1993, who are required, as
                    a condition of employment, to sign an agreement to use binding arbitration
                    to resolve disputes not resolved through other processes. For employees
                    hired before January 1993, arbitration is optional. Whether mandatory or
                    elected, arbitration is binding on both the company and the employee.44 An


                    40
                     As a result of the sale of its defense business and a reorganization expected to take place in the latter
                    part of 1997, Hughes Electronics will be divested of certain business units and retain about 15,000
                    employees.
                    41
                      Called the Employee Problem Resolution Procedure.
                    42
                      Some variance exists, across Hughes’ business units, in the specifics of the dispute resolution system.
                    43
                      Management selects the board members from a pool of senior executives and managers.
                    44
                     If an employee hired after January 1, 1993, bypasses binding arbitration and files a lawsuit, Hughes
                    will ask the court to dismiss the suit and compel use of the company processes.



                    Page 42                                                     GAO/GGD-97-157 ADR In the Workplace
                 Appendix III
                 Case Illustration: Hughes Electronics
                 Corporation




                 arbitrator can award remedies, including monetary damages, the same as a
                 court can. Arbitration costs are divided equally between the disputant and
                 the company. The cost-sharing arrangement for arbitration, as explained
                 by Hughes’ Corporate Manager for Equal Employment Opportunity and
                 Workforce Diversity Programs, was to let all parties to a dispute have a
                 stake in the process and to help avoid frivolous use of arbitration. In cases
                 of hardship, however, the company will limit the employee’s share to 2
                 weeks’ net pay.


                 The rising costs of employment-related litigation served as the catalyst for
Experiences in   Hughes to change its program.45 According to the Corporate Manager for
Developing ADR   Equal Employment Opportunity and Workforce Diversity Programs, the
Processes        company researched the “best practices” in dispute resolution used by
                 other companies. The company also conducted a “cultural audit” to find
                 out what types of complaints were being surfaced, what the issues were,
                 who was complaining, and what workplace values were prevalent.
                 Additionally, according to an article coauthored by Hughes’ Vice President
                 for Workforce Diversity, employee focus groups and surveys showed that
                 employees considered the existing dispute resolution program too time
                 consuming and too management oriented and felt that it denied employees
                 the opportunity to tell their own stories.46 Hughes also used pilot tests to
                 gauge the likely success of various ADR techniques.

                 In implementing the program, Hughes trained prospective board members
                 in how to conduct hearings, assess the merits of parties’ arguments, and
                 render fair and impartial decisions. Hughes also trained executives and
                 managers throughout the company in conflict resolution techniques, and
                 educated employees—through brochures, supervisory guidance, and
                 newsletters—about the new program, according to the Corporate Manager
                 for Equal Employment Opportunity and Workforce Diversity Programs.
                 Hughes rolled out the new program in January 1993.




                 45
                   David R. Barclay and William A. Carmell, “Benefits of a Resolution-Centered ADR Program,”
                 Corporate Counsel’s Guide: Alternative Dispute Resolution in the Employment Context, Business Laws
                 Inc., ch. 16 (Chesterland, Ohio: Dec. 1995). Mr. Barclay is Hughes’ Vice President for Workforce
                 Diversity; Mr. Carmell is a labor and employment attorney with experience in developing alternative
                 dispute resolution programs.
                 46
                   Ibid.



                 Page 43                                                 GAO/GGD-97-157 ADR In the Workplace
                       Appendix III
                       Case Illustration: Hughes Electronics
                       Corporation




                       According to the Corporate Manager for Equal Employment Opportunity
Resolving Workplace    and Workforce Diversity Programs, Hughes has not formally evaluated the
Disputes and           program but views the program as successful. Although there is no
Lessening the Time     empirical evidence to suggest that the dispute resolution system has
                       reduced overall costs associated with external complaints and litigation,
and Costs Associated   he cited some positive trends. One was the downward trend in the number
With Redress and       of complaints filed with the Equal Employment Opportunity Commission
                       and corresponding state agencies, which dropped from 154 in 1992 (the
Litigation             year before the new program was implemented) to 29 in 1995, and to 45 in
                       1996. Another trend was a reduction in employment-related lawsuits,
                       which dropped from 54 in 1992 to 23 in 1995, and to 47 in 1996. He cited
                       incentive programs during downsizing and improved business conditions
                       as possible factors contributing to these trends.

                       Most cases are closed with the decision of the management review board.
                       From January 1993 through December 1996, of 80 management review
                       board hearings, 29 cases were decided in the employee’s favor.
                       Resolutions included rescinded disciplinary actions, terminations, and
                       layoffs as well as modifications to performance appraisals. Of the 51 cases
                       not decided in the employee’s favor, only 1 went to arbitration, with the
                       employee prevailing. The Corporate Manager for Equal Employment
                       Opportunity and Workforce Diversity Programs said one reason why
                       others may not have chosen to arbitrate their dispute is because they had
                       had their “day in court” before the management review board.

                       Hughes surveys employee attitudes about the company’s dispute
                       resolution process in two ways, according to the Corporate Manager for
                       Equal Employment Opportunity and Workforce Diversity Programs. One
                       way is in a written survey provided to all employees who use the
                       company’s dispute resolution program. The other way is periodic focus
                       groups of employees and managers. Although the official did not provide
                       the results of these processes, he said that Hughes has not received any
                       indication that its cost-sharing arrangement for binding arbitration
                       discouraged employees from pursuing their complaints.


                       Hughes has learned several lessons from its Employee Problem Resolution
Lessons Learned by     Procedure. For example, according to the aforementioned article, the
the Organization       review board hearing serves an important function just by giving an
                       employee the chance to tell his or her own story. Also, according to the
                       article, “Key to any such program is effective planning and implementation
                       by both in-house counsel and the human resources department in devising



                       Page 44                                    GAO/GGD-97-157 ADR In the Workplace
Appendix III
Case Illustration: Hughes Electronics
Corporation




a process that is not simply adversarial, but focuses on resolution.” It is
also important, according to the Corporate Manager for Equal
Employment Opportunity and Workforce Diversity Programs, to obtain
employee input on how well the dispute resolution process is working in
order to add to the trust between management and employees.

Additionally, Hughes developed a greater understanding of the roots of
conflict and discovered the need to reexamine the role that human
resources personnel play in conflict resolution, according to the article
coauthored by Hughes’ Vice President for Workforce Diversity. The article
also stated that the company learned to focus on the underlying reasons
for reversals of company decisions, which has led to an in-depth
reexamination of the management decisions that led to specific employee
complaints.




Page 45                                     GAO/GGD-97-157 ADR In the Workplace
Appendix IV

Case Illustration: Polaroid Corporation


                    The Polaroid Corporation, headquartered in Cambridge, MA, employs
                    6,500 nonunion workers in manufacturing imaging products. Polaroid has
                    long offered alternative dispute resolution (ADR) techniques as part of its
                    traditional dispute resolution process. Since the 1950s, Polaroid has
                    offered all grievants a hearing before a panel of three company officers;
                    and nonmanagerial employees have had access to arbitration. In
                    January 1995, Polaroid added mediation, peer panels, an ombudsman
                    program, and a program to help grievants take part in the dispute
                    resolution process.


                    A Polaroid employee is encouraged to use mediation at any stage of a
How the Processes   grievance or appeal. The employee may choose from among 60 in-house
Work                mediators or, if the employee prefers, an external mediator. If the matter is
                    not resolved earlier in the dispute resolution process, the employee can
                    request a hearing before a panel of three company officers or a peer
                    panel.47 Panel decisions are binding on the company, but a panel’s
                    prerogatives are limited. For example, a panel may order the reinstatement
                    of a wrongfully discharged employee, but it cannot order Polaroid to pay
                    damages to the employee. Arbitration is the final step for nonmanagerial
                    employees appealing disciplinary or discharge actions. An arbitrator may
                    award the employee the same remedies as a court, including monetary
                    damages. Although Polaroid expects its employees to use the company’s
                    dispute resolution processes, an employee who is unable to resolve a
                    grievance to his or her satisfaction through those processes can take the
                    matter to court.

                    Polaroid provides grievants with training about its dispute resolution
                    processes. In addition, the company’s four full-time ombudsmen hear
                    employee concerns, conduct investigations and inquiries, and help
                    employees decide on their course of action. Polaroid also provides
                    coaching and training for grievants and a company “grievance assistant”
                    can help grievants throughout the process by suggesting strategies,
                    preparing written statements, and developing oral presentations.

                    With one exception, Polaroid pays all ADR program costs. An employee
                    who takes his or her case to arbitration must pay $100 toward expenses. If



                    47
                      For nonmanagerial employees, the peer panel is composed of three nonmanagerial and two
                    managerial-level employees. For managerial employees, the panel consists of three managerial-level
                    and two nonmanagerial employees. Under policy changes that had been proposed at the time of our
                    study, Polaroid would replace officer or peer panels with “appeal panels” composed of a variety of
                    managerial and nonmanagerial employees.



                    Page 46                                                  GAO/GGD-97-157 ADR In the Workplace
                       Appendix IV
                       Case Illustration: Polaroid Corporation




                       the employee prevails in an arbitration hearing, Polaroid refunds the $100
                       payment.


                       Polaroid’s current dispute resolution program has its roots in a pilot that
Experiences in         began in October 1993 at its plant in New Bedford, MA at the suggestion of
Developing ADR         a small group of plant employees. While the pilot was under way, a
Processes              Polaroid task force, assembled to redesign the company’s entire dispute
                       resolution program, researched the best practices of 22 companies,
                       obtained the views of various employee groups, and examined the results
                       of the New Bedford pilot. The task force’s proposals were critiqued by
                       focus groups drawn from all levels of company staff before being finalized
                       and put into practice in January 1995.

                       Polaroid established the Grievance Administration Office to oversee the
                       appeals processes and train employees, according to the Human
                       Resources Manager, Corporate Dispute Resolution. The company trained
                       selected employees as ombudsmen, mediators, peer panelists, and
                       grievance assistants. Peer panelists, for example, were given 2 days of
                       training on due process and the proper conduct of hearings; and grievance
                       assistants were given training in company policies, problem solving, and
                       conflict resolution, according to information provided by the company.
                       Supervisors received the same training as grievance assistants; Polaroid’s
                       rationale was that supervisors are the first line in preventing and resolving
                       disputes, according to the former Senior Corporate Counsel. Further,
                       Polaroid trained its human resource management staff in facilitating
                       conflict resolution. Finally, Polaroid educated its employees about the
                       company’s dispute processes, using video presentations, small meetings,
                       newsletters, and other printed materials.


                       Polaroid has not formally evaluated and does not track the costs of its ADR
Resolving Workplace    processes, but management officials believe that the company’s ADR
Disputes and           processes have been successful in resolving disputes and avoiding the time
Lessening the Time     and expense associated with litigation.

and Costs Associated   Management officials noted that most cases in Polaroid’s dispute
With Redress and       resolution program are resolved before they reach the panel or arbitration
                       levels. They said that each year, only about 30 to 40 cases are heard by
Litigation             peer or company officer panels (for the most part, grievants select peer
                       rather than company officer panels) while three or four cases go to
                       arbitration. Employees have prevailed in about one-third to one-half of the



                       Page 47                                     GAO/GGD-97-157 ADR In the Workplace
                     Appendix IV
                     Case Illustration: Polaroid Corporation




                     panel hearings and in about one-fourth of arbitration hearings. The peer
                     panel and arbitration processes are not very time consuming, according to
                     Polaroid’s former Senior Corporate Counsel. She said peer panelists
                     generally spend several hours in preparing for and hearing a case; they
                     deliver their decisions in 7 to 10 days. An arbitration hearing usually takes
                     about a half day (although prehearing conferences add time to the
                     process) with a decision rendered within 30 days.

                     Also, according to Polaroid’s former Senior Corporate Counsel, no
                     employee has ever gone to court after losing an arbitration decision. She
                     attributes this success to the fact that grievants get “their day in court”
                     within Polaroid’s dispute resolution program.

                     Polaroid officials also spoke highly of the company’s experience with
                     mediation, which was used extensively in grievances associated with
                     downsizing. They told us that mediation techniques expedited the
                     grievance process and, at a minimum, made settlements more likely by
                     clarifying the issues.

                     There is some indication that employees generally have a favorable view
                     of the company’s dispute resolution processes. About two-thirds of the
                     employees Polaroid surveyed at its New Bedford plant indicated that the
                     pilot program as a whole was “somewhat” to “extremely” effective.

                     Although it revamped its dispute resolution system in 1995, Polaroid is
                     considering further revisions to decrease the resolution time for serious
                     cases—such as firings, which currently take 12 to 18 months—to a
                     maximum of 14 weeks. The policy under consideration would require
                     mediation to be used, reduce the number of grievance steps below the
                     panel and arbitration levels, and impose stricter process time deadlines.


                     Polaroid learned two important lessons, according to the former Senior
Lessons Learned by   Corporate Counsel. The first was that most disputes could be resolved
the Organization     through informal processes. The second lesson was that one outgrowth of
                     progressive dispute resolution processes is the enhancement of personnel
                     management. She said that since Polaroid provided the processes and the
                     climate for employees to raise issues and concerns, supervisors and
                     managers have become more accountable for adhering to company
                     policies. And because a cluster of grievances can indicate a problem in a
                     work unit or dissatisfaction with a company policy, the system helps keep
                     management aware of systemic or organizational concerns.



                     Page 48                                     GAO/GGD-97-157 ADR In the Workplace
Appendix V

Case Illustration: Rockwell International
Corporation

                    Rockwell International Corporation, headquartered in Seal Beach, CA,
                    designs and builds automation, communications, semiconductor, and
                    automotive products worldwide.48 It has about 60,000 domestic
                    employees, 50,000 of whom are nonunion. In May 1993, Rockwell added
                    arbitration to its existing dispute resolution procedures for its nonunion
                    employees.49 Eight of Rockwell’s 12 business units offer peer panel review
                    as another ADR technique to be used before arbitration.


                    A Rockwell employee who is unable to resolve a dispute through the
How the Processes   traditional chain of command can request a peer panel review in the eight
Work                Rockwell business units that offer this technique. The panel, randomly
                    selected by computer, has five members, three of whom are from the same
                    payroll group as the disputant, and two of whom are managers. The panel
                    normally meets within 30 days of the request, evaluates the facts
                    presented, and usually decides the outcome of cases within 1 day. The
                    panel can overturn or modify a disciplinary or discharge action and can
                    award back pay, but it cannot award exemplary or punitive damages.
                    Although Rockwell is bound by the peer panel decision, an employee who
                    is dissatisfied with the decision can request arbitration.

                    Arbitration, the final step in Rockwell’s dispute resolution process, is
                    mandatory for employees hired after January 1, 1993, who are required to
                    sign a “Mutual Agreement To Arbitrate Claims” as a condition of
                    employment.50 For those hired before January 1993, signing the agreement
                    is voluntary, except that they cannot be promoted into management or
                    exercise company stock options unless they sign the agreement. Rockwell
                    did not implement the arbitration policy for all employees hired before
                    1993, reasoning that in California (where many Rockwell employees
                    reside), courts would require specific consideration for the arbitration
                    agreement to be binding and would not consider merely continued
                    employment to constitute such consideration.

                    Arbitrators can award remedies, including monetary, exemplary, and
                    punitive damages, just as a court can. The disputant and the company
                    share arbitration costs equally, although the arbitrator may award


                    48
                     In December 1996, Rockwell’s aerospace and defense units were acquired by the Boeing Corporation.
                    This illustration discusses Rockwell’s dispute resolution processes before the acquisition.
                    49
                      Rockwell’s ADR program is known as the Employee Issue Resolution Process.
                    50
                     If an employee who has signed this agreement bypasses the company’s processes and files a lawsuit,
                    Rockwell will file a motion in court to compel arbitration.



                    Page 49                                                  GAO/GGD-97-157 ADR In the Workplace
                       Appendix V
                       Case Illustration: Rockwell International
                       Corporation




                       reasonable fees to the prevailing party.51 The arbitrator’s decision is final
                       and binding on both the company and the employee.


                       In 1993, after the company spent over $1 million in attorney’s fees in
Experiences in         winning a lengthy case that alleged wrongful discharge and handicap
Developing ADR         discrimination and having gained first-hand knowledge of the time and
Processes              expense that lawsuits can involve, Rockwell’s top executives decided to
                       incorporate arbitration into the company’s existing dispute resolution
                       process, according to the company’s Assistant General Counsel.

                       In implementing the arbitration program, Rockwell first asked its 950
                       highest paid executives to sign the Mutual Agreement to Arbitrate Claims,
                       reasoning, the Assistant General Counsel said, that it would not be fair to
                       ask employees to participate in a program from which top executives were
                       exempted. The arbitration program was then communicated to employees
                       through a letter explaining the program, an arbitration handbook
                       addressing questions employees would be likely to ask, and a video about
                       the arbitration process. The Assistant General Counsel said that it cost
                       between $18,000 to $23,000 for legal advice, developing and distributing
                       copies of videotapes, and printing and distributing booklets.

                       Rockwell then tasked its individual business units with updating their own
                       dispute resolution procedures to incorporate additional ADR approaches.
                       Based on the results of focus groups and other techniques, 8 of the 12
                       business units incorporated peer review panels, in addition to arbitration,
                       into their procedures.


                       Rockwell has not evaluated its ADR program but believes it has been
Resolving Workplace    successful because, according to Rockwell’s Assistant General Counsel,
Disputes and           (1) the “Mutual Agreement To Arbitrate Claims” has not been challenged
Lessening the Time     in court; (2) the company has been able to avoid the costs of litigation and
                       outside counsel, as the company was represented by its own counsel in
and Costs Associated   the arbitrations; and (3) only one employee who signed the arbitration
With Redress and       agreement has filed a lawsuit against the company.52
Litigation

                       51
                        Rockwell’s Assistant General Counsel explained that arbitrators follow court rules in making such
                       awards and that judges are very reluctant to award attorney’s fees to companies unless the plaintiff’s
                       action was frivolous.
                       52
                         At the time of our study, the company was filing a motion to dismiss and compel arbitration.



                       Page 50                                                    GAO/GGD-97-157 ADR In the Workplace
                     Appendix V
                     Case Illustration: Rockwell International
                     Corporation




                     The official also said he believes that there have been numerous instances
                     in which the arbitration agreement made it easier for Rockwell and a
                     former or current employee to resolve differences short of either
                     arbitration or litigation. He noted that from May 1993 (when the program
                     started) through June 1996, only two cases went to arbitration; the
                     company prevailed in the first one, while the employee received some
                     relief in the second case.53 A third case was pending arbitration at the time
                     of our study.

                     The Assistant General Counsel also pointed out the effectiveness of peer
                     panels in resolving disputes. Ten cases had been heard by a peer review
                     panel between May 1993 and June 1996, and while the company prevailed
                     in 9 of the 10 cases, none of them went on to arbitration.


                     Rockwell learned several lessons from its experiences, according to the
Lessons Learned by   company’s Assistant General Counsel. One lesson learned was that
the Organization     because many of Rockwell’s top corporate executives were involved in the
                     wrongful discharge/handicap discrimination case by testifying either at a
                     trial or at a deposition, they were keenly aware of the time and costs
                     involved in employment litigation. This led to a partnership and shared
                     vision among the top legal and human resource officials to exploring ways
                     to reduce such time and costs.

                     Another lesson the Assistant General Counsel said the company learned is
                     that for an arbitration process to be accepted, a good communications
                     process is needed on how the arbitration process works. Rockwell also
                     found it important for the communication to be frank. For example, while
                     Rockwell’s arbitration handbook explained that arbitration was a fair and
                     less expensive way to settle a dispute, it also explained that an employee
                     seeking to “hit the jackpot” would probably be disappointed because a
                     windfall award is less likely under arbitration than in a jury trial. The
                     handbook explained that an arbitrator’s award is more likely than a jury’s
                     to be based on the merits of a case rather than on extraneous or emotional
                     considerations.

                     A further lesson Rockwell learned involved the “Mutual Agreement To
                     Arbitrate Claims” that was made a condition of employment beginning in
                     1993, according to Rockwell’s Assistant General Counsel. He said there
                     was a “little” negative reaction from some management employees
                     because they would not be able to take advantage of employee stock

                     53
                       Neither of these cases were in business units that offered peer review.



                     Page 51                                                    GAO/GGD-97-157 ADR In the Workplace
Appendix V
Case Illustration: Rockwell International
Corporation




options without signing the “Mutual Agreement To Arbitrate Claims.” But,
Rockwell learned, the provision could be made acceptable to employees if
the company made sure that it was applied fairly and ethically by
(1) ensuring that the program did not take away from employees any of
their substantive rights; (2) including the company’s top executives in the
program; and (3) providing employees with consideration for signing the
agreement, instead of merely imposing the requirement as a condition of
employment.




Page 52                                     GAO/GGD-97-157 ADR In the Workplace
Appendix VI

Case Illustration: TRW Inc.


                    TRW Inc., headquartered in Cleveland, OH, provides products and services
                    for the space, automotive, and defense markets worldwide. More than
                    90 percent of its 33,000 U.S. employees are not covered under collective
                    bargaining agreements. In January 1995, TRW adopted a companywide ADR
                    program for these workers. The company made arbitration available
                    companywide.54 Some TRW business units offer mediation and peer
                    review in addition to traditional dispute resolution procedures. TRW also
                    operates a “hotline” to provide employees an independent and confidential
                    source of advice and assistance.


                    While arbitration is a companywide policy, TRW’s approximately 60
How the Processes   business units have the prerogative to develop their own dispute
Work                resolution processes, according to the company’s Senior Corporate
                    Counsel for Labor and Employment. Some business units, including TRW’s
                    Systems Integration Group (SIG), include ADR techniques along with
                    arbitration in the dispute resolution continuum. Under SIG’s procedures,
                    employees can choose a hearing before a peer panel or mediation before
                    taking a matter to arbitration.

                    In most instances, a SIG employee first submits his or her dispute for
                    management review, which includes internal mediation conducted by
                    human resources staff. If the matter is not resolved or dropped, the
                    employee can elect to have a hearing before a five-member peer review
                    panel55 that may be followed by external mediation, or bypass the panel
                    and request external mediation. A peer review panel’s decision is binding
                    on the company, although its remedies are limited to actual damages; for
                    example, it can order that a wrongfully discharged employee be reinstated
                    with back pay but cannot award damages. Before a SIG grievant who is
                    dissatisfied with a peer panel’s decision can take the matter to arbitration,
                    the dispute must be submitted for external mediation. Arbitration is the
                    final step at SIG as well as at all other TRW business units. Arbitrators may
                    award remedies just as a court would do.

                    With one exception, TRW pays all dispute resolution costs. Its share of
                    arbitration costs depends on the outcome of the case. An employee who
                    chooses to go to arbitration and does not prevail is liable for half the cost

                    54
                     TRW provides for two forms of arbitration. One model is the single arbitrator; the other is a panel
                    selected by the employee and management and may also include an arbitrator. Most TRW business
                    units have adopted the single arbitrator model.
                    55
                     The panel, called the Appeals Committee at SIG, is composed of five members selected from a pool
                    of employees nominated by other employees. The grievant selects three panelists and management
                    selects two.



                    Page 53                                                    GAO/GGD-97-157 ADR In the Workplace
                 Appendix VI
                 Case Illustration: TRW Inc.




                 of arbitration but not more than 2-days’ base pay.56 TRW expects its
                 employees to use the company’s dispute resolution processes before
                 litigating a matter. If an employee bypasses TRW’s processes and files suit,
                 the company will petition the court to compel the use of company
                 arbitration.


                 According to TRW’s Senior Corporate Counsel for Labor and Employment,
Experiences in   company downsizing efforts in the early 1990s and a general proliferation
Developing ADR   of employment-related lawsuits led to much employment litigation. She
Processes        said that Human Resource and Legal Department staff believed that ADR
                 could help resolve cases more quickly and less expensively. Consequently,
                 TRW required that its business units adopt arbitration to supplement
                 existing grievance procedures.

                 Before putting its arbitration program into effect in January 1995, TRW
                 trained key staff and marketed the program throughout the company,
                 according to the Senior Corporate Counsel for Labor and Employment.
                 She said that TRW contracted with a law firm for a 2-day program to give
                 human resource management staff (1) an overview of mediation and
                 arbitration and (2) instruction on how to conduct discovery, prepare a
                 brief, interview witnesses, and take depositions. The marketing initiative,
                 which began in the summer of 1994, included group meetings in field units,
                 video presentations, and articles in company newspapers. The company
                 also sent literature on the arbitration program to all employees. She also
                 said that before the program went into effect, TRW obtained employee
                 feedback through focus groups and surveys. SIG supplemented the parent
                 company’s initiatives with its “Dispute Resolution Process Guide”—a
                 step-by-step description of, and questions and answers about, the dispute
                 resolution processes at SIG.

                 Besides the costs of training staff and marketing the program (which the
                 company did not track), the start-up process required the near full-time
                 efforts of three staff from the human resources, communication, and legal
                 offices for about 6 months.




                 56
                   The extent to which employees share in arbitration costs was under review by the company at the
                 time of our study, according to the TRW’s Senior Corporate Counsel for Labor and Employment.



                 Page 54                                                  GAO/GGD-97-157 ADR In the Workplace
                       Appendix VI
                       Case Illustration: TRW Inc.




                       Although TRW has not formally evaluated its arbitration program, the
Resolving Workplace    company’s Senior Counsel for Labor and Employment said that the
Disputes and           program has succeeded in resolving disputes and avoiding the time and
Lessening the Time     expense associated with litigation. Information she provided showed that
                       from January 1995 to September 1996, companywide, 40 grievants
and Costs Associated   requested arbitration. Of these disputes, 27 had been submitted to
With Redress and       mediation; 16 (59 percent) of them were resolved. Of the 13 cases not
                       mediated, two were arbitrated; the entire process took 4 to 5 months. The
Litigation             other cases were pending.57

                       According to the Senior Counsel, there has been a significant drop in
                       discrimination and other employment litigation, although some of this
                       decrease is due to the company’s improved economic condition since 1994
                       and the end of downsizing. She also noted that existence of the arbitration
                       program redirected some court cases to TRW’s dispute resolution forum.
                       She explained that five employees had bypassed TRW’s arbitration process
                       and filed lawsuits. After TRW informed the plaintiffs’ attorneys about the
                       arbitration program, four of the five plaintiffs withdrew their suits to first
                       seek resolution through arbitration. The fifth plaintiff agreed to arbitration
                       after TRW filed a motion in federal district court to dismiss or stay a
                       lawsuit, pending arbitration. In addition, several employees who filed
                       lawsuits before the arbitration program went into effect subsequently
                       requested binding arbitration as an alternative to the judicial process.
                       TRW’s Senior Counsel further noted the fact that since only two cases had
                       been arbitrated in the program’s first 21 months, this showed the
                       effectiveness of mediation and other dispute resolution measures.

                       TRW’s Counsel’s Office surveyed human resources staff in mid 1996 about
                       their perception of the arbitration program. Among the staff’s responses
                       was that employees seemed willing to use ADR because a third party is
                       involved in the process. They also said that more concerted efforts are
                       made at each step to reach an acceptable solution. Further, the staff said
                       the process seems to have reduced the number of “frivolous” lawsuits.


                       TRW has learned several lessons, according to the company’s Senior
Lessons Learned by     Counsel for Labor and Employment: (1) that, contrary to expectations, the
the Organization       establishment of the arbitration program did not result in an
                       overwhelming number of complaints; (2) that most grievants simply want

                       57
                         Data on ADR use by all of TRW’s individual business units was not available. However, between
                       January 1995 and November 1996, 15 cases were filed at SIG in which the grievant had the option of
                       going to peer review or directly to external mediation. Of the 15 cases filed, 13 were resolved (12
                       through mediation).



                       Page 55                                                   GAO/GGD-97-157 ADR In the Workplace
Appendix VI
Case Illustration: TRW Inc.




to “have their day in court” to tell their story to a third party; and (3) that
an employee’s request for arbitration often opens the door to settlement,
whether through mediation or other settlement discussion. Finally,
responses by TRW human resources staff to a company survey indicated
that having the program keeps management “on their toes” as far as
documenting and addressing issues as they occur.




Page 56                                       GAO/GGD-97-157 ADR In the Workplace
Appendix VII

Case Illustration: U. S. Department of
Agriculture

                  The U. S. Department of Agriculture, headquartered in Washington, D.C.,
                  manages agriculture, food safety, nutrition, natural resources, community
                  development, and scientific research programs. Agriculture and its 16
                  agencies employ about 108,000 people. In 1993, Agriculture provided
                  mediation training to its full-time equal employment opportunity (EEO)
                  counselors.58 In January 1994, it established Dispute Resolution Boards to
                  handle the rapidly growing volume of EEO complaints.59 In 1996,
                  Agriculture announced a policy requiring its agencies to develop conflict
                  resolution programs outside the EEO complaint process that used
                  alternative dispute resolution (ADR) techniques like mediation, to intervene
                  early in disputes to prevent them from becoming formal EEO complaints.
                  This case illustration discusses the operation of Dispute Resolution
                  Boards.


                  The Dispute Resolution Boards operated in an adjudicatory-like fashion as
How the Process   an initial step in the formal EEO complaint process. The three-member
Works             boards required 1 day for preparation and 1 day for the hearing or
                  conference, which had two phases: fact-finding60 and resolution or
                  settlement. During fact-finding, the board heard sworn testimony from
                  both the employee and the supervisor and obtained other evidence.
                  Following deliberations, the board met jointly and separately with the
                  parties to facilitate resolution and offered them an assessment of (1) the
                  strengths and weaknesses of their respective positions and (2) which party
                  would likely prevail if the case proceeded further in the process. If
                  resolution resulted, the parties signed a written settlement. If there was no
                  resolution, information developed during fact-finding became part of the
                  investigation record.

                  Because the board lacked resolution authority, an agency official with
                  authority to enter into settlement agreements—called a resolving
                  official—participated in the proceedings. According to Agriculture’s
                  Washington Regional Service Center Director, the resolving official was
                  authorized under verbal Agriculture policy to commit the department to
                  monetary settlements up to $2,500, in addition to back pay and attorneys’
                  fees, without higher-level approval.


                  58
                    The 40-hour training was provided by the Justice Center of Atlanta.
                  59
                   As a result of the recommendation of an internal Agriculture evaluation (see p. 60), boards were
                  discontinued in April 1997.
                  60
                    Regulations governing the EEO complaint process require the parties to cooperate during
                  fact-finding.



                  Page 57                                                    GAO/GGD-97-157 ADR In the Workplace
                       Appendix VII
                       Case Illustration: U. S. Department of
                       Agriculture




                       The significant increase in EEO complaints, the inability to process them in
Experiences in         a timely manner, and a burgeoning complaint backlog prompted
Developing the ADR     Agriculture’s then Assistant Secretary for Administration to adopt the
Process                board concept to save time and money by reducing the number of cases
                       going through the entire complaint process.61

                       In April 1993, a task force of EEO and employee relations staff began
                       planning how the boards would operate. Agriculture conducted a pilot
                       from September 1993 to December 1993 with board members selected
                       from EEO and human resource staff for “their good common sense and
                       basic understanding of the complaint process and dispute resolution,”
                       according to Agriculture’s evaluation of the pilot. Diversity was also a
                       selection factor. According to agency officials, based on the pilot,
                       Agriculture decided that a board would have three members rather than
                       one because a three-person board would (1) more fully develop the record
                       and identify issues requiring further investigation, (2) be viewed as more
                       credible by the parties, and (3) allow for diversity among the members. In
                       January 1994, a board was established in the Washington Regional Service
                       Center. The officials also said that because of resource constraints, boards
                       operated in only four of the six regional service centers before being
                       discontinued in April 1997 and had been used in only about 12 to
                       15 percent of the EEO cases.


                       Agriculture evaluated the results of the 3-month pilot, comparing 48 cases
Resolving Workplace    going through the board process to 41 cases handled by the traditional EEO
Disputes and           complaint process. Evaluation results showed that of the 48 pilot cases, 16
Lessening the Time     were withdrawn, dismissed, or settled prior to the day of the hearing. Of
                       the 32 remaining cases, 23 settled on the day of the hearing. Another 8
and Costs Associated   settled after the day of the hearing. The one case not resolved continued to
With Redress and       be handled by the traditional process. Board cases were resolved in less
                       time than the traditional process, requiring an average of 152 days from
Litigation             filing of the complaint until closure (including 46 days from the time a case
                       was assigned to a board to closure); the comparison group averaged 238
                       days.62

                       The evaluation team reported that while it could not compare costs of the
                       board and traditional processes with any precision because exact records
                       of time and cost were not maintained, “it seems fairly certain” that EEO

                       61
                        The history of Agriculture’s Dispute Resolution Boards was discussed in USDA Dispute Resolution
                       Board Pilot Project Evaluation, May 1994.
                       62
                         Ibid.



                       Page 58                                                 GAO/GGD-97-157 ADR In the Workplace
                     Appendix VII
                     Case Illustration: U. S. Department of
                     Agriculture




                     complaint processing costs using boards were less than the costs under
                     the traditional process. However, when settlement costs were considered,
                     it was unclear whether boards were less costly because board-facilitated
                     settlements (averaging $19,737) were more costly than settlements and
                     decisions in the comparison group (averaging $4,665).63

                     Generally, employees and resolving officials had more favorable opinions
                     about boards than did the supervisors, according to the evaluation. Of
                     respondents to the evaluation team’s survey, 42 percent of the supervisors
                     were dissatisfied with the board process compared with 17 percent of the
                     employees and 25 percent of the resolving officials. Forty-two percent of
                     the supervisors said the process was unfair, compared with 17 percent of
                     the employees and 15 percent of the resolving officials. In addition,
                     53 percent of the supervisors were dissatisfied with the outcomes
                     compared with 25 percent of the employees and 30 percent of the
                     resolving officials.


                     Based on the evaluation, Agriculture learned that while boards had been
Lessons Learned by   helpful in dealing with the complaint inventory, they were labor intensive
the Organization     and expensive and did not deal with the underlying issues in disputes. This
                     is the reason why Agriculture has begun training counselors in mediation
                     and developed a conflict resolution policy encouraging its agencies to
                     intervene early in disputes, according to the former Deputy Director of the
                     Office of Civil Rights and Enforcement.

                     Another lesson learned relates to the politics of settlement. Officials said
                     that in the beginning, there was a push to settle and close cases. They said
                     that the settlement policy discouraged supervisors and affected their
                     attitude toward the board process because they perceived that their
                     authority was being undermined. At the same time, the settlement policy
                     may have encouraged employees to file complaints. Agriculture has since
                     stated that in making settlements, officials should ensure that appropriate
                     weight is given to the merits of a case. Additionally, some Agriculture
                     officials said that they believe the prospect of receiving a cash settlement
                     may have motivated some employees to file complaints, and the
                     expectation of receiving cash may have impeded resolution.

                     The above lessons were reinforced by the Civil Rights Action Team that
                     studied how Agriculture treated both customers and employees. In its


                     63
                      Includes cash settlements, compensatory damages, back pay and attorneys’ fees, and the monetary
                     value of noncash settlements such as training, travel, and tuition.



                     Page 59                                                 GAO/GGD-97-157 ADR In the Workplace
Appendix VII
Case Illustration: U. S. Department of
Agriculture




February 28, 1997, report,64 the team recommended sweeping changes to
how Agriculture resolves workplace disputes, including using more
interest-based ADR techniques outside the EEO process to resolve
complaints and their underlying issues at the lowest possible level. To deal
with the EEO case backlog, the team recommended using mediation and
voluntary binding arbitration. The team also recommended discontinuing
boards. The Executive Assistant to the Deputy Director of Agriculture’s
Office of Civil Rights said that criticism of the boards was not about their
design but about how they implemented the agency’s settlement policy.

In addition to recommending that Agriculture abandon a “settle at all
costs” policy, the team said that the performance of EEO counselors and
other Agriculture personnel with dispute resolution responsibilities should
not be assessed exclusively or primarily on their settlement or resolution
rates. Further, the team recommended that all Agriculture employees
receive civil rights training and that managers receive training to enhance
their “people skills.”

The Secretary of Agriculture has accepted the team’s findings. An
implementation team was established to draft new settlement and conflict
management policies as well as to set up a conflict management program.
Agriculture said that the team is expected to complete its work by the end
of the summer 1997.




64
 Civil Rights at the United States Department of Agriculture: A Report by the Civil Rights Action
Team.



Page 60                                                    GAO/GGD-97-157 ADR In the Workplace
Appendix VIII

Case Illustration: U.S. Air Force


                     The U.S. Air Force, with facilities worldwide, employed more than 571,000
                     personnel in fiscal year 1996, including about 183,000 civilians. In the Air
                     Force, the alternative dispute resolution (ADR) method that is emphasized
                     is mediation, which has been used in personnel issues since 1990,
                     particularly in civilian employee equal employment opportunity (EEO)
                     cases. The Air Force has trained its EEO counselors in mediation to foster
                     its use.


                     Civilian employees who believe they have been discriminated against can
How the Process      contact an EEO counselor who, if unable to resolve a particular matter, may
Works                suggest mediation.65 Both parties—employee and supervisor—must agree
                     to mediation, which can occur at any point in the dispute. The Air Force’s
                     goal is to provide mediation within 4 weeks of a request for its use,
                     according to the deputy dispute resolution specialist.

                     A mediator is selected depending on the issues involved (the Air Force
                     prefers to match a mediator to a case with issues in which he or she
                     specializes) and, to a limited extent, on the preferences of the parties. The
                     mediator could be the counselor whom the employee initially contacted;
                     another counselor not involved in the case; or an external mediator from
                     another Air Force installation, the Department of Defense’s shared
                     neutrals program, another federal agency, or a contract mediator. In
                     addition to the disputants, the mediator must arrange for an Air Force
                     official, who is authorized to agree to settlement terms, to directly
                     participate in, or at least be kept informed of, the mediation proceedings
                     in order to approve any proposed settlement terms. If a matter is resolved,
                     the parties sign a settlement agreement, which is subject to a higher-level
                     review before becoming final.


                     Air Force officials said workplace ADR efforts began in 1990, when the Air
Experiences in       Force started providing mediation training to grievance examiners and
Developing the ADR   complaint investigators. A more structured ADR program was established
Process              in January 1993 when the Secretary of the Air Force, in a memorandum,
                     called for using ADR in appropriate cases, designated the Deputy General
                     Counsel as the Air Force Dispute Resolution Specialist and, among other
                     things, required (1) development of an ADR implementation plan, and
                     (2) an annual progress report.


                     65
                       Kirtland Air Force Base is an exception. The base’s Mediation Center, established in December 1993,
                     is separate from all formal processes and handles disputes ranging from grievances under collective
                     bargaining agreements to EEO complaints.



                     Page 61                                                   GAO/GGD-97-157 ADR In the Workplace
Appendix VIII
Case Illustration: U.S. Air Force




In planning the program, General Counsel staff canvassed the public and
private sector legal communities about best practices and program
successes, according to a memorandum prepared by the Air Force’s
General Counsel describing the status of the Air Force’s ADR initiatives. An
ADR Working Group determined that the ADR program should emphasize
stakeholder education and awareness by briefing those most affected by
disputes, including EEO and senior military and civilian personnel.

In implementing the program, the Air Force continued training EEO
counselors in mediation; at the time of our study, over 1,000 Air Force
personnel (most of whom had dealt with employment disputes) had been
trained, according to the General Counsel’s memorandum. The training
course is a 24-hour program.66 To help less experienced mediators further
develop their skills and to promote ADR use, the Air Force established the
Mediator Mentoring Program, under which trained but inexperienced
mediators apprentice with highly skilled and experienced mediators.

A major marketing initiative began in 1996 with plans to brief key staff at
all major commands. Efforts have included on-site multimedia briefings
and briefings via satellite to more than 20 Air Force installations. Further,
the Office of the General Counsel has publicized ADR efforts through its
newsletter ADR News!.

The Air Force has been developing ADR guidance and information
resources. At the time of our study, the handbook Air Force Mediation
Handbook: Mediating Civilian Personnel Workplace Disputes was in final
drafting stages. In developing the handbook, the Air Force used input from
EEO counselors and personnel specialists. The Air Force is also developing
an Internet site called The ADR Source, which will offer information about
ADR programs in the Air Force, at other federal agencies, and in the private
sector. These and other efforts are being underwritten by a budget that in
fiscal year 1997 is $400,000.




66
 Training providers have included the Justice Center of Atlanta and the Federal Mediation and
Conciliation Service as well as other contractors.



Page 62                                                  GAO/GGD-97-157 ADR In the Workplace
                       Appendix VIII
                       Case Illustration: U.S. Air Force




                       An evaluation of the Air Force’s program, as it relates to the resolution of
Resolving Workplace    EEO complaints, is expected to be completed by late 1997, according to Air
Disputes and           Force officials.67 Preliminary data show that the Air Force ADR program is
Lessening the Time     successful in resolving workplace disputes and in lessening the time and
                       costs associated with redress, according to the memorandum from the Air
and Costs Associated   Force General Counsel. The extent to which costs are saved is a subject of
With Redress and       the ongoing evaluation. However, the General Counsel said that resolving
                       EEO disputes at the earliest possible time and at the lowest organizational
Litigation             levels helps keep both tangible and intangible costs (e.g., diversion of
                       resources from mission accomplishment and morale problems) low.

                       In fiscal year 1996, the Air Force reported using ADR in 1,807 EEO cases,
                       resolving 1,339 (74 percent) of them. It also reported that the amount of
                       time it takes to resolve cases has declined. The average number of days to
                       settle formal EEO complaints decreased from 329 to 136 between fiscal
                       years 1992 and 1995. The General Counsel said that this is explained, in
                       part, by the use of ADR. During this period, the average time to close formal
                       complaints (including through a settlement) declined from 401 to 201 days.
                       The Air Force also reported significant time savings in resolving informal
                       EEO complaints.



                       In her memorandum, the Air Force General Counsel said that the ADR
Lessons Learned by     program has achieved important results in a relatively short period of time
the Organization       because of (1) strong support from senior management, (2) the fact that at
                       least one employee has worked full-time on implementing ADR initiatives,
                       (3) training and awareness briefings, and (4) financial support for ADR
                       initiatives.

                       The Air Force learned additional lessons from a survey of Air Force
                       personnel who reported using ADR techniques to resolve personnel
                       disputes.68 Among the lessons learned was that early use of ADR enhances
                       the potential for resolving the dispute in a way that satisfies the parties’
                       underlying interests, whereas when time drags on without a resolution,
                       people tend to “dig in their heels” and fight for their position. Another
                       lesson was that mediation helps overcome disputes arising from poor
                       communication, which is at the root of many disputes. Mediators also

                       67
                         An evaluation of the Kirtland Air Force Base Mediation Center was in final review at the time of our
                       study. Preliminary data show the center resolved 51 of 72 (71 percent) cases mediated between
                       December 1993 and October 1996. In addition, 90 percent of users responding to a survey between
                       December 1993 and July 1995 reported they were satisfied with the services.
                       68
                         These lessons are documented in Air Force ADR Program (FY 94-96); Lessons Learned by Using ADR
                       to Resolve Civilian Workplace Disputes, in draft at the time of our study.



                       Page 63                                                    GAO/GGD-97-157 ADR In the Workplace
Appendix VIII
Case Illustration: U.S. Air Force




reported learning the importance of preparation, including explaining the
mediation process to the parties; becoming generally familiar with the
nature of the dispute; encouraging the disputants to review the facts of the
dispute before mediation begins; and coordinating with appropriate
officials (e.g., one authorized to agree to settlement terms). They also
learned that not every case is appropriate for mediation, such as cases
involving “chronic complainers” and those in which complainants have an
inflated sense of what they might be entitled to receive. However, Air
Force officials emphasized that even in such cases, if mediation might be
helpful, it should be tried. The officials told us that other cases that are not
appropriate for mediation are those involving fraud or those that are the
subject of an Inspector General investigation. Further, the mediators
reported that written agreements build trust, cooperation, and
understanding.

Finally, Air Force officials noted that providing mediation training to the
Air Force’s EEO counselors was worthwhile. Although not all counselors
became skilled in or comfortable with the mediation process, the training
helped many of them do a better job of resolving EEO matters, whether
they used mediation or more traditional counseling methods.




Page 64                                      GAO/GGD-97-157 ADR In the Workplace
Appendix IX

Case Illustration: U. S. Postal Service


                     The U. S. Postal Service, an independent governmental establishment
                     headquartered in Washington, D.C., is the nation’s largest civilian
                     employer with more than 800,000 workers. Although most employees are
                     covered under collective bargaining agreements under which they can file
                     equal employment opportunity (EEO)-related grievances, they can
                     simultaneously file complaints under the EEO complaint system for federal
                     employees. Mediation was introduced in 1986 in the EEO complaint
                     program in Santa Ana, now within the Postal Services’ Southern California
                     EEO Processing Center. In 1994, the Postal Service piloted a
                     headquarters-sponsored EEO complaint mediation program69 in its North
                     Florida District. At the time of our study, there were 20 pilot mediation
                     sites.


                     Postal Service workers who believe that they have been discriminated
How the Process      against can contact the EEO office where they receive information about
Works                mediation and a form to make a request. Mediation is offered in lieu of the
                     customary counseling in the informal phase of an EEO complaint. If a
                     senior complaint processing specialist approves mediation, it is to be
                     scheduled within approximately 2 weeks of the request. The Postal Service
                     representative at mediation is to have settlement authority or have access
                     to an official with that authority. If the parties achieve resolution, they are
                     to sign a settlement agreement.

                     The source of the mediators varies by location. The Southern California
                     EEO Processing Center uses EEO counselors trained in mediation. The
                     North Florida District uses contract mediators. Other locations, if they do
                     not use internal mediators, obtain mediators from a shared neutrals
                     program or contractor.


                     A variety of factors led to the Postal Service’s growing use of mediation,
Experiences in       according to Postal Service officials. The grass roots program in Santa Ana
Developing the ADR   was suggested by an EEO specialist experienced in mediation. In 1992,
Process              General Counsel and human resources staff at Postal Service headquarters
                     began developing an agencywide alternative dispute resolution (ADR)
                     policy in voluntary compliance with the Administrative Dispute Resolution
                     Act of 1990 and to take advantage of federal employee EEO complaint
                     system regulations encouraging ADR use. The first pilot under the
                     agencywide initiative was in the North Florida District, its selection

                     69
                      The Postal Service’s program is known as REDRESS (Resolve Employment Disputes, Reach
                     Equitable Solutions Swiftly).



                     Page 65                                              GAO/GGD-97-157 ADR In the Workplace
Appendix IX
Case Illustration: U. S. Postal Service




spurred by a need to comply with a consent decree resulting from a
lawsuit.70 The Postal Service expanded EEO complaint mediation to other
sites because of the high number of complaints and the sense that many
complaints are rooted in personality conflicts that should be resolved in
some other forum, according to the Manager, EEO Compliance and
Appeals.

In developing the agencywide ADR policy, the General Counsel and human
resources staff at headquarters researched ADR practices at large firms and
consulted with dispute resolution experts, according to Postal Service
officials. The officials said that the Postal Service contracted with a
marketing firm to conduct focus groups to obtain supervisor and
rank-and-file employee perceptions of the EEO complaint process and what
could be done to improve it. On the basis of their research, focus group
results, and other input, the Postal Service decided to use outside
mediators in North Florida provided under contract by the Justice Center
of Atlanta, to lend more credibility to the process. Before implementing
this first pilot, the Postal Service obtained feedback from supervisors and
union representatives.

Officials told us that support for expanding the ADR program came from
the Postal Service’s quality improvement program known as “Customer
Perfect,” which provided top-level policy endorsement, funding, and
publicity. Under this program, they said that the Postal Service has
provided conflict management and ADR training to about 1,100 managers
and supervisors. It also held two week-long conferences to help managers
from the cities with pilot programs design an ADR program and develop an
implementation plan. Further, it trained staff as mediators in each
location, developed a video and brochure about the program, and provided
on-site program development assistance. Headquarters program staff have
conducted numerous briefings at locations across the nation. The Postal
Service has also worked with the unions to get their support.

Finally, the Postal Service’s program implementation plans include a
comprehensive evaluation of user satisfaction and cost effectiveness of
mediation at the pilot locations. The evaluation is being conducted by an
assistant professor at Indiana University’s School of Public and
Environmental Affairs as a research project at no cost; the Postal Service
is paying for administrative support.



70
 Under the terms of the consent decree, which sunset in October 1996, the Postal Service had offered
binding arbitration.



Page 66                                                  GAO/GGD-97-157 ADR In the Workplace
                       Appendix IX
                       Case Illustration: U. S. Postal Service




                       As of June 1997, the Postal Service’s evaluation was still under way.
Resolving Workplace    However, data reported from North Florida and Southern California show
Disputes and           that mediation resolved a higher proportion of complaints in the informal
Lessening the Time     stage than did the traditional process. Resolution rates were 74 percent
                       (139 of 188 cases between October 1994 and December 1996) in North
and Costs Associated   Florida and 94 percent (1,605 of 1,714 cases between October 1988 and
With Redress and       September 1996) in Southern California. In the Southern California EEO
                       Processing Center, for example, only 57 percent of cases that went
Litigation             through traditional counseling were resolved. In the North Florida
                       program’s first year, the “flow-through” rate (the rate of informal
                       complaints becoming formal complaints) dropped from 43 to 22 percent,
                       according to the ADR Counsel.

                       Postal Service surveys of employees and supervisors in North Florida who
                       had used mediation and of those in a comparison group (in other
                       locations) who had used the traditional process showed user satisfaction
                       with mediation far exceeded user satisfaction with the traditional process.
                       For example, 90 percent of mediation users said the process was fair
                       compared with 41 percent of the comparison group. Seventy-two percent
                       of the mediation users were satisfied with the outcomes compared with
                       40 percent of the comparison group.

                       Mediation was not very time consuming. In the Southern California EEO
                       Processing Center, the typical mediation required about 90 minutes; cases
                       in North Florida averaged 197 minutes.


                       Foremost among the lessons the Postal Service learned is the importance
Lessons Learned by     of top-level support in establishing and sustaining a program, according to
the Organization       Postal Service officials. For example, the Southern California program,
                       established with the support of the human resources director, saw the use
                       of mediation in informal cases decline from 58 percent in fiscal years 1989
                       through 1992 to about 10 percent following management changes resulting
                       from restructuring in 1992.

                       Postal officials said that keys to a program’s growth are demonstrable
                       results and early successes. The ongoing evaluation should be particularly
                       helpful in this regard. Because starting a mediation program requires a
                       Postal Service district to pay start-up costs, officials said they learned that
                       some managers need convincing data to decide whether mediation is a
                       worthwhile investment.




                       Page 67                                      GAO/GGD-97-157 ADR In the Workplace
Appendix IX
Case Illustration: U. S. Postal Service




Officials said they also learned that the user-friendly dispute resolution
program increased the number of informal complaints. However, based on
North Florida’s experience, a lower proportion of informal complaints
turned into formal complaints, and the overall number of formal
complaints declined. Postal Service officials attribute this reduction to
employees’ (especially supervisors) having developed conflict
management competencies after having gone through mediation, some on
several occasions. Officials also said that it is important to intervene
promptly in a dispute while the issue is fresh in the disputants’ minds and
their positions have not hardened.




Page 68                                   GAO/GGD-97-157 ADR In the Workplace
Appendix X

Case Illustration: U. S. Department of State


                    The Department of State, headquartered in Washington, D.C., advises the
                    President in formulating and executing foreign policy. State’s
                    approximately 13,000 U.S.-based employees are classified either as foreign
                    service (58 percent) or civil service (42 percent). In 1989, State
                    implemented a legislative mandate that created the Ombudsman for Civil
                    Service Employees to address concerns about the treatment of its civil
                    service employees in relation to its foreign service employees. In
                    May 1995, State launched a pilot mediation program to deal with equal
                    employment opportunity (EEO) complaints. State also tested dispute
                    resolution boards in EEO complaints in 1995 and 1996. Further, in
                    June 1997, State developed procedures for mediating grievances.


                    A State employee can choose from several channels when seeking
How the Processes   assistance to resolve a workplace dispute, including the Ombudsman for
Work                Civil Service Employees, the Office of Equal Employment Opportunity and
                    Civil Rights (S/EEOCR), and the grievance office.

                    The Ombudsman for Civil Service Employees reports directly to the
                    Secretary of State and is to provide (1) advice on how programs and
                    policies affect the interests of civil service employees and (2) counseling
                    to employees on career and work-related matters. The ombudsman’s office
                    is to assist individual employees by providing confidential counseling on
                    workplace issues, such as answers to their questions about employee
                    rights. Although rarely a party to dispute resolution, the ombudsman is to
                    outline approaches for employees dealing with conflict and resolving
                    disputes.

                    S/EEOCR  has used mediation and dispute resolution boards to deal with EEO
                    complaints. It uses mediation in the informal phase of an EEO complaint.
                    Employees are provided information about mediation by counselors and
                    when they visit the S/EEOCR office. Participating in mediation is voluntary
                    for the employee but mandatory for management. In addition to the
                    employee and the supervisor, a management representative with the
                    authority to approve a settlement is party to the mediation. During the
                    pilot, State has used internal mediators and mediators from a Washington,
                    D.C.-based shared neutrals program. If the matter is resolved, the parties
                    sign an agreement that is reviewed and monitored by S/EEOCR.




                    Page 69                                    GAO/GGD-97-157 ADR In the Workplace
                 Appendix X
                 Case Illustration: U. S. Department of State




                 In 1995 and 1996, S/EEOCR used dispute resolution boards71 on a trial basis
                 to resolve formal complaints. The three-member board operated in an
                 adjudicatory-like fashion. While the board had no resolution authority, it
                 offered the parties an assessment of (1) the strengths and weaknesses of
                 their respective positions and (2) which party would likely prevail if the
                 case proceeded further in the process. If a resolution resulted, the parties
                 signed a written settlement. If there was no resolution, information that
                 was developed during the fact-finding phase became part of the
                 investigation record.

                 Under procedures developed in June 1997, an employee visiting the
                 grievance office may be offered mediation. If mediation is opted for,
                 grievance office staff will contact State’s dispute resolution specialist to
                 obtain the services of a mediator.


                 For advice on implementing the ombudsman mandate, the Office of the
Experiences in   Ombudsman said it contacted the Ombudsman Association and federal
Developing ADR   agencies with an ombudsman. The ombudsman (a collateral responsibility
Processes        for a senior executive) has a full-time assistant (a mid-level civil service
                 employee) who has received mediation training. State publicized the
                 ombudsman’s office by issuing an announcement when the first
                 ombudsman was appointed. At the outset, the ombudsman’s office said it
                 held approximately 30 meetings with U.S.-based employees to learn their
                 concerns. The ombudsman’s office has continued to get a sense of
                 employee concerns through its participation in task forces and working
                 groups, according to the ombudsman’s assistant. Publicity has also been
                 provided through the Department of State magazine and through
                 departmental notices and bulletin board postings.

                 In late 1994, State appointed its first dispute resolution specialist; and the
                 current dispute resolution specialist said that he works closely with the
                 Office of the Ombudsman and S/EEOCR, among others. In early 1995, State
                 established the Alternative Dispute Resolution (ADR) Working Group, with
                 representatives from several department bureaus. The working group
                 invites employee representatives to its monthly meetings. Also, in
                 March 1995, a group of State employees received mediation training at the
                 Foreign Service Institute; as of July 1997, the dispute resolution specialist
                 said that there was a roster of 15 foreign and civil service employees from
                 which State could draw for mediation services. Additionally, State said

                 71
                  Board members were from the Department of Agriculture. See app. VII for further discussion on the
                 operation of dispute resolution boards at the Department of Agriculture.



                 Page 70                                                 GAO/GGD-97-157 ADR In the Workplace
                       Appendix X
                       Case Illustration: U. S. Department of State




                       that the Foreign Service Institute enhanced the mediation module in its
                       negotiations art and skills course.

                       According to the Associate Director, S/EEOCR, State initiated the pilot
                       mediation program in May 1995 to (1) deal with the EEO case backlog,
                       (2) find a more cost-effective way to resolve EEO-related disputes in the
                       early stages, and (3) provide an alternative forum for employees who do
                       not want to file EEO complaints. He said that the mediation program has
                       been publicized in State’s magazine and in a department notice.

                       The Associate Director, S/EEOCR, said that State’s use of dispute resolution
                       boards occurred when it accepted an offer from the Department of
                       Agriculture for six trial board hearings without charge, with the
                       understanding that State would pay Agriculture between $3,000 to $4,000
                       plus court reporter fees for each case beyond the trial period. He said that
                       State opted not to use the Agriculture-operated boards beyond the trial
                       period.

                       The dispute resolution specialist told us that State’s more recent initiative
                       to mediate grievances came about as a result of the efforts of the ADR
                       Working Group and himself.


                       The ombudsman does not keep records of counseling outcomes, believing
Resolving Workplace    that this would undermine confidentiality, according to the ombudsman’s
Disputes and           assistant. However, she estimates that an average of three to five civil
Lessening the Time     service employees visit the office weekly (in addition to phone inquiries)
                       and, based on feedback she has received from them, believes that their
and Costs Associated   needs have been met. Although the ombudsman is generally not involved
With Redress and       in resolving workplace disputes, State believes that his availability to
                       address employee concerns prior to their filing a formal action has helped
Litigation             reduce the EEO caseload.

                       According to the Associate Director, S/EEOCR, mediation has been used in
                       only about 3 percent of State’s EEO cases. Between May 1995 and
                       December 1996, mediation was used in nine cases, achieving closure in
                       three of them (one case was still in process at the time). He attributed this
                       low utilization to complainants’ aversion to the process as well as State’s
                       failure to give ADR higher priority.

                       Of the five cases heard by boards, State reported that two were resolved.
                       Although State discontinued using the Agriculture-operated boards, it may



                       Page 71                                        GAO/GGD-97-157 ADR In the Workplace
                     Appendix X
                     Case Illustration: U. S. Department of State




                     consider adopting boards using State staff as board members, according to
                     the Associate Director, S/EEOCR, because a board (1) facilitates
                     communication between the parties, (2) costs about the same as an EEO
                     investigation, and (3) produces an immediate investigation report.


                     State has learned numerous lessons in implementing its ADR initiatives.
Lessons Learned by   The ombudsman’s assistant said that the fact that the ombudsman’s office
the Organization     initially set modest goals for achieving organizational change avoided
                     inflated expectations of what the ombudsman’s office could do to deal
                     with workplace conflict and discontent. She said that the downside to that
                     strategy, however, was that the ombudsman’s accomplishments may not
                     have been recognized in the first few years. She also said that outreach
                     efforts and the program’s confidentiality feature, however, helped
                     overcome initial employee skepticism.

                     Another lesson, the Associate Director, S/EEOCR noted, was that a program
                     can stagnate when there is a lapse in program leadership, which occurred
                     when the dispute resolution specialist position remained unfilled between
                     January and August 1996.

                     More lessons have come out of the mediation pilot. The Associate
                     Director, S/EEOCR said he came to understand complainants’ aversion to
                     mediation. He said they do not want to confront their supervisors but want
                     an investigation and hearing to vindicate their position. Also, complainants
                     avoid mediation because they want an advocate and mistakenly believe
                     S/EEOCR will be their advocate. He also said outside mediators carry more
                     credibility than internal mediators and that the shared neutrals program is
                     not only a source of mediators but a way of matching a mediator’s
                     experiences and demographics to that of the parties and the issues.
                     Further, he said he learned mediation training alone does not equip a
                     person to mediate EEO cases. The position also requires a person with the
                     right temperament and an understanding of EEO issues.

                     A February 1996 State briefing memorandum discussed other lessons
                     about mediation. One lesson was a recognition of the need to remove
                     management from direct involvement in the mediation process and instead
                     appoint management representatives who have been briefed on ADR.
                     Another lesson was to exclude as possibilities for mediation any cases that
                     set precedent or involve large monetary settlements, significant
                     investigation, a violation of criminal law, or issues dealing with security.




                     Page 72                                        GAO/GGD-97-157 ADR In the Workplace
Appendix XI

Case Illustration: Walter Reed Army Medical
Center

                     The Walter Reed Army Medical Center, in Washington, D.C., providing
                     medical services to active and retired military personnel and their
                     dependents, has approximately 3,900 civilian employees, about a third of
                     whom are covered under collective bargaining agreements. In
                     October 1994, Walter Reed established the Alternative Dispute Resolution
                     (ADR) Center to achieve quick resolutions of workplace disputes and to
                     avoid more costly redress channels mostly by using mediation. Its services
                     are available to all employees, except those employees who are covered
                     under a collective bargaining agreement must obtain written approval
                     from their union.


                     A Walter Reed employee visits (or is referred to) the ADR Center—a
How the Process      separate unit within Walter Reed’s personnel office—where the dispute
Works                resolution officer is to determine whether a matter is appropriate for the
                     center to handle. Besides the employee and supervisor (who must
                     participate), the parties to mediation usually include a senior manager
                     (called a resolving official) with the authority to commit Walter Reed to
                     the terms of a settlement agreement. If a resolution is reached, the parties
                     sign a settlement agreement.


                     According to Walter Reed officials, the ADR Center was established at a
Experiences in       time when EEO cases were at an all time high, workplace tensions were
Developing the ADR   high, the workforce was discontented, and Walter Reed’s image was
Process              suffering. The base commander, civilian personnel officer, EEO officer, and
                     the Diversity Council developed the ADR Center in response to these
                     conditions.

                     In the 6-month period before opening the ADR Center, the civilian
                     personnel officer said she researched ADR principles and practices, studied
                     ADR programs at other organizations, consulted with an outside expert, and
                     examined the culture of conflict within Walter Reed. She said that as a
                     result of the study, Walter Reed established the ADR Center as a separate
                     branch of the civilian personnel office to intervene early in a given dispute
                     before the employee sought assistance from the EEO office, believing that
                     many disputes resulted from poor communications or other interpersonal
                     problems. Another reason for locating the ADR Center within the civilian
                     personnel office was because of the importance of expertise in personnel
                     rules and regulations when dealing with workplace disputes.




                     Page 73                                    GAO/GGD-97-157 ADR In the Workplace
                       Appendix XI
                       Case Illustration: Walter Reed Army Medical
                       Center




                       Walter Reed originally assigned three persons to the ADR Center and
                       trained them in mediation.72 To publicize the program, the base
                       commander issued a memorandum to all employees; a later memorandum
                       from the U.S. Army Medical Command also endorsed the use of ADR. To
                       further acquaint employees with the program, the center conducted over
                       1,000 1-hour briefings. In addition, because Walter Reed believes that most
                       disputes can be prevented or quickly resolved if employees have the right
                       kind of skills, the ADR Center arranged for about 160 staff to receive
                       one-half to 1 day of training in conflict resolution. The training materials
                       included workbooks and videotapes.


                       Although there has been no formal evaluation of Walter Reed’s ADR
Resolving Workplace    program, the ADR Center officials presented indicators that they said they
Disputes and           believed show the program to be successful. Of the 160 cases that went
Lessening the Time     through the Center’s ADR processes in its first 2 years of operation, 108
                       (67.5 percent) were resolved. The typical mediation required no more than
and Costs Associated   two sessions and a total of from 4 to 6 hours. Because the center operated
With Redress and       outside the EEO complaint process, cases dealt with issues other than
                       those the Center classified as EEO. The cases that were most frequently
Litigation             dealt with were ones that the Center called “communication” issues
                       (36 percent), disciplinary actions (23 percent), and performance appraisals
                       (16 percent). Only 15 percent of the cases dealt with EEO issues. The ADR
                       Center resolved two-thirds of the EEO cases. It was most successful in
                       resolving communication cases (83 percent) and least successful in cases
                       involving disciplinary actions (43 percent). Settlement agreements often
                       involved handshakes, apologies, training, or other reasonable relief the
                       employees requested.

                       Walter Reed’s Office of Internal Review and Audit Compliance reported
                       that the number of EEO complaints, grievances and appeals, and
                       disciplinary and adverse actions dropped substantially in the ADR Center’s
                       first 2 years of operation (fiscal years 1995 and 1996), compared with the 2
                       years before the center opened (fiscal years 1993 and 1994). EEO
                       complaints decreased 47 percent from 76 to 40, grievances and appeals
                       dropped almost 80 percent from 147 to 30, and disciplinary and adverse
                       actions decreased 55 percent from 369 to 165. In addition, informal EEO
                       complaints dropped from 204 in fiscal years 1993 and 1994 to 25 in fiscal
                       years 1995 and 1996. There was, however, some disagreement among
                       Walter Reed officials about the extent to which Center efforts contributed
                       to these reductions.

                       72
                         The ADR Center was authorized two staff at the time of our study.



                       Page 74                                                   GAO/GGD-97-157 ADR In the Workplace
                     Appendix XI
                     Case Illustration: Walter Reed Army Medical
                     Center




                     The decline in formal redress cases reduced the workload of the civilian
                     personnel and EEO offices, which was able to meet its responsibilities even
                     though it was being downsized, according to the Office of Internal Review
                     and Audit Compliance. Precise cost savings created by avoiding formal
                     redress were not available, but the dispute resolution officer said that for
                     each EEO investigation avoided, Walter Reed saves between $2,000 and
                     $3,000 that the Defense Department charges for an investigation, plus
                     court reporter costs. Walter Reed’s Chief of Internal Review and Audit
                     Compliance reported that ADR has resulted in better and cheaper ways of
                     resolving disputes, but he did not quantify savings. He also reported that
                     the ADR Center’s personnel costs for fiscal years 1995 and 1996 were about
                     $344,000. According to Walter Reed’s dispute resolution officer, the
                     investment in training (mostly provided by contractors) totaled about
                     $36,000.

                     Employee satisfaction with the ADR services was high, according to ADR
                     Center surveys of first-year users. Of the respondents, 90 percent rated the
                     overall performance of the ADR program and the performance of mediators
                     from good to excellent, 73 percent reported that they would use the
                     program again, and 72 percent reported that they would recommend the
                     program to others. Seventy percent of the respondents reported that their
                     working relationships and environment had improved.


                     Walter Reed officials said that one important lesson they learned is that it
Lessons Learned by   is necessary to understand the culture of conflict within an organization in
the Organization     order to establish an appropriate ADR program. Another important lesson
                     is that the support of top management is essential to a program’s success.
                     The dispute resolution officer said Walter Reed’s ADR program was
                     established in large measure with the strong support of the former base
                     commander. Despite this support, he found that Center staff have had to
                     constantly nurture the program through continuous marketing and
                     education efforts.

                     The dispute resolution officer also said he learned that merely giving an
                     employee an opportunity to tell his or her side of the story—whether or
                     not the employee prevails—can give the employee some measure of
                     satisfaction. He also said that although employee satisfaction with the ADR
                     services was high, he had learned that some managers viewed settlements
                     with suspicion, believing that settlements undermined their authority and
                     seemed to “give away the store.” He said that, as a result, resolving
                     officials have become more judicious in making settlements.



                     Page 75                                       GAO/GGD-97-157 ADR In the Workplace
Appendix XI
Case Illustration: Walter Reed Army Medical
Center




One further lesson Walter Reed officials said they learned is that by
establishing the ADR Center, they opened a less formal channel for
employees to seek assistance before an issue erupts. They said Center
staff have been able to get to the underlying issues and direct employees
to the most appropriate resource, such as cases in which the underlying
source of the employee’s problem is outside the workplace.




Page 76                                       GAO/GGD-97-157 ADR In the Workplace
Appendix XII

Case Illustration: Seattle Interagency ADR
Consortium

                  The Seattle Federal Executive Board’s73 Interagency Alternative Dispute
                  Resolution (ADR) Consortium is a “shared neutrals” program that began
                  providing services in April 1993. The interagency group, comprised mostly
                  of volunteer federal employees, offers low- or no-cost mediation services
                  to more than 25 participating federal agencies in the Seattle, WA, area.74
                  The consortium uses the comediation model (two mediators working in
                  tandem on each case) to deal with various types of employment-related
                  disputes, including discrimination complaints, interpersonal conflicts, and
                  grievances filed by collective bargaining unit members.


                  The consortium offers agencies access to mediation services without
How the Process   necessarily having to invest in training their own mediators or purchasing
Works             mediation services. The consortium also fills agencies’ needs for external
                  mediators. Agencies generally participate in the consortium by
                  contributing volunteer employees to be trained as mediators, although this
                  is not a requirement. There is no cost to an agency unless it contributes
                  personnel to the pool. In such case, costs to the agency are for mediation
                  training ($650 per mediator) and for the amount of time the employee
                  spends in training and performing consortium-sponsored mediation. There
                  is no charge to agencies for mediation services, but agencies have paid
                  mediators’ travel expenses. As of July 1997, the consortium had a pool of
                  78 mediators who provided their services as a collateral duty.

                  Consortium mediation services are arranged by a person chosen by the
                  participating agency to be the contact between the agency and the
                  consortium. This person functions as a gatekeeper, determining whether
                  the consortium’s mediation process is appropriate to a specific dispute. A
                  request for services then goes to the consortium. When the request for
                  mediation services has been accepted, a designated consortium member
                  first considers the nature of the dispute and the characteristics of the
                  disputants (e.g., race and gender), and then selects two members of the
                  consortium’s mediation pool best suited for the mediation team. The
                  disputants (an employee and his or her supervisor or peer) then agree on a
                  mutually acceptable site and time for the mediation to take place. When
                  appropriate, an official of the disputants’ agency, identified during the
                  intake process, who has authority to approve the terms of a resolution is
                  present at the mediation.

                  73
                    Federal Executive Boards are comprised of the top executives of federal agencies represented in a
                  federal region to provide closer coordination among the agencies.
                  74
                   The consortium has expanded to include the governments of the City of Seattle, King County, and the
                  Port of Seattle.



                  Page 77                                                   GAO/GGD-97-157 ADR In the Workplace
                 Appendix XII
                 Case Illustration: Seattle Interagency ADR
                 Consortium




                 Mediation generally takes about 3-1/2 to 5 hours, during which time either
                 party may end the mediation if dissatisfied with the process. If a
                 settlement is reached, the parties sign a settlement agreement. If there is
                 no agreement, the employee can pursue the matter through the
                 conventional redress channels. Whether or not there is a settlement, the
                 disputants are asked to complete an evaluation of the mediation. The
                 mediators themselves also evaluate the process.


                 The idea for establishing the consortium belonged to two federal
Experiences in   employees who, in November 1992, had recently completed mediation
Developing ADR   training and believed that mediation was a useful alternative to formal
Resources        redress processes. They proposed the idea to the Seattle Federal
                 Executive Board in January 1993, which approved it in March 1993. One of
                 the reasons for establishing the mediator pool was to make available to
                 agencies a cadre of mediators with the diverse backgrounds appropriate to
                 a wide variety of situations. The price of contributing to this pool would be
                 small compared with that of developing similar capabilities at multiple
                 agencies.

                 The consortium chose the comediation model for two main reasons. One
                 reason was that new mediators could be trained by having them work
                 side-by-side with more experienced, certified mediators. The other reason
                 was that the consortium would be better able to respond to the diversity of
                 issues and disputants.

                 The consortium’s mediator training program is extensive, consisting of
                 classroom training, role playing, and on-the-job experience. The training,
                 administered by a local county dispute resolution center, consists of 40
                 hours of classroom training, a written 10-hour take-home test, and
                 observation of at least 6 mediations. In addition, each trainee conducts a
                 mock mediation that is judged by the training provider’s certified
                 mediators. The successful trainee then apprentices as a comediator with a
                 certified mediator. The apprenticeship consists of about 10 comediations,
                 each of which is critiqued by the certified mediator. At the
                 apprenticeship’s conclusion, the training provider evaluates the critiques
                 and determines whether the apprentice should be certified at the
                 journeyman level. In addition to formal training, there are monthly
                 in-service meetings.




                 Page 78                                      GAO/GGD-97-157 ADR In the Workplace
                       Appendix XII
                       Case Illustration: Seattle Interagency ADR
                       Consortium




                       According to a consortium cochairman, the consortium has filled the need
Resolving Workplace    of the 25 participating federal agencies in the Seattle area by providing
Disputes and           high quality mediation services for nearly any kind of situation at low cost.
Lessening the Time     The consortium’s results have not been formally evaluated; however, the
                       consortium cochairman said he believed that the high resolution rate has
and Costs Associated   helped participating agencies avoid the time and costs of redress and
With Redress and       litigation.
Litigation             Between May 1993 and February 1997, the consortium mediated 171 cases,
                       settling 153 (89 percent) of them. Data on the nature of settlements were
                       being analyzed at the time of our study, according to the consortium
                       member responsible for the effort.

                       User satisfaction with the process and with the mediators is also high,
                       according to the consortium’s surveys of users. Of evaluations received
                       from 75 users (survey results were not broken out by successful and
                       unsuccessful mediations), 84 percent reported that their overall level of
                       satisfaction with the mediation process was good to excellent, while
                       73 percent of the respondents who reached agreement said that their level
                       of satisfaction with the agreement was good to excellent.


                       The cochairman attributes the consortium’s success to the training,
Lessons Learned by     development, and evaluation process for the volunteer mediators and to
the Organization       the evaluations completed after each mediation. The post mediation
                       evaluations have been valuable in making improvements to the program,
                       according to the cochairman. Some of the improvements include
                       scheduling for longer and multiple sessions and having more caucuses
                       between individual parties and mediators. A major change was made as
                       well in the intake process, which at first was managed by the training
                       provider. Because the employees of the training provider were not familiar
                       with government agencies, early mediations did not always include an
                       agency representative with the authority to approve the terms of a
                       resolution. As a result, consortium mediators with an understanding of
                       government organizational structures now handle the intake process.

                       Another lesson learned, according to the consortium cochairman, was that
                       some benefits derive even in cases not resolved through the consortium
                       mediation. In these cases, issues in dispute often become clarified, which
                       may help bring about later resolution.




                       Page 79                                      GAO/GGD-97-157 ADR In the Workplace
Appendix XII
Case Illustration: Seattle Interagency ADR
Consortium




The cochairman said that there have also been lessons learned about
trends in agencies’ use of consortium mediation services. Initially, the
consortium’s mediation services were underutilized. However, through
marketing efforts and as consortium successes became known by
word-of-mouth, use of the consortium’s services has increased to a point
at which the pool of volunteer mediators is now being used to its limits.
Still, the cochairman believes, more federal agencies in the Seattle area
could be participating. Some of these agencies, he learned, are reluctant to
expose their operations to mediators from outside the agency. The
cochairman said he believes that outreach geared to individual agencies is
needed to encourage them to participate in the consortium.




Page 80                                      GAO/GGD-97-157 ADR In the Workplace
Appendix XIII

Major Contributors to This Report


                     Stephen E. Altman, Assistant Director, Federal Management and
General Government   Workforce Issues
Division             Anthony P. Lofaro, Evaluator-in-Charge
                     Geraldine C. Beard, Senior Evaluator


                     Michael L. Gorin, Evaluator
Denver Regional      Pamela K. Tumler, Communications Analyst
Office
                     In addition to the above individuals, the contributions of the following GAO
Other                staff are acknowledged: Gary V. Lawson and Brenda J. Lindsey, General
Acknowledgements     Government Division, for their assistance in developing information about
                     federal agency ADR use; Robert D. Sampson, Health and Human Services
                     Division, for providing information about private sector ADR use; James M.
                     Rebbe, Office of General Counsel, for legal assistance; William Trancucci,
                     General Government Division, and Rudolfo G. Payan, Denver Regional
                     Office, for their assistance in ensuring the accuracy of the information
                     reported; and Lessie M. Burke, General Government Division, for editing
                     assistance.




(410038)             Page 81                                    GAO/GGD-97-157 ADR In the Workplace
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