Adoption of Internal Dispute Resolution Systems by Non-union Employers
| Publication year | 1993 |
| Pages | 975 |
| Citation | Vol. 05 No. 1993 Pg. 975 |
1993, May, Pg. 975. Adoption of Internal Dispute Resolution Systems by Non-Union Employers
Both employers and employees benefit from exploring options to litigation of wrongful discharge disputes. Several years ago, an article in this column highlighted some of the problems with judicial resolution of wrongful discharge claims and suggested that parties explore arbitration as an alternative.(fn1) More recently, another article publicized a U.S. Supreme Court decision requiring arbitration of a statutory discrimination claim.(fn2) This article continues exploration of the alternatives to litigation. Focusing on internal dispute resolution systems ("DRS"), the article describes several different systems and discusses their legal and practical advantages and disadvantages to employers. The article concludes with anecdotal information regarding the experience of one major Colorado employer.
Most employers are familiar with only three types of DRS. First, collective bargaining agreements usually provide for a multi-step grievance procedure culminating in arbitration before a neutral third party. Second, individual employment contracts routinely provide for arbitration and are enforceable under the Uniform Arbitration Act of 1975 and the Federal Arbitration Act.(fn3) Third, many employers have some sort of informal "open door" policy in place for both management and nonmanagement employees.
There are other alternatives in dispute resolution. One is to permit grievances to be appealed formally through a sequential process of review by different levels of management. This culminates in a decision, if necessary, by some chief administrative officer or in a recommendation, either binding or nonbinding, by a third-party neutral to the officer. Another alternative is to have a committee comprised of management and nonmanagement employees perform the final review. Like the third-party neutral in the example above, the committee makes either a binding or nonbinding recommendation to the chief administrative officer. The Adolph Coors Company, a large nonunion Colorado employer, has had success with this last alternative, as discussed below.
The type of system an employer implements depends on several factors.(fn4) A system to challenge major events such as discharges, suspensions and statutory violations should be more structured and formal than a procedure challenging only minor discipline. Employers may wish to restrict the use of the system to such major events only. A system that covers both management and nonmanagement employees may be perceived as more fair if the system itself includes both types of employees.
If the DRS is implemented to prevent litigation, employers should include as many procedural rights for the grievant as possible. Courts may be reluctant to bar a lawsuit if the internal DRS does not meet minimum standards of procedural fairness.(fn5) One guideline to consider is the Uniform Arbitration Act, which provides the right to be represented by an attorney, to be present at the dispute resolution hearing, to present evidence, to be heard, to cross-examine witnesses and to receive a decision by a neutral third party.(fn6) Of course, the parties can always agree on a procedure which varies from these requirements. For example, Coors and its employees have agreed to use a system which contains different procedures.
However, no matter which system an employer selects, there are several key requirements. First, the employer should communicate to employees, and have them agree, that the chosen DRS is a final and binding system to resolve their disputes.(fn7) Second, the DRS should plainly state that the burden is on the employee to show that the adverse action was not justified. Third, accurate records should be maintained on the use and impact of the DRS.
Colorado courts have not yet addressed many of the legal issues raised by the use of an in-house DRS. However, there is a growing body of case law from jurisdictions around the country on these issues. It is only a matter of time before Colorado courts rely on this case law.
A common claim litigated by employees is that an employee handbook created
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