A recent survey of Fortune 1000 companies in the US shows an increase in the use of mediation to resolve employment disputes and a move towards conflict management strategies that rely principally on interest-based options.

At a recent presentation as part of the ESRC Workplace Conflict Seminar series, Prof. David Lipsky of Cornell University compared the findings of a 2011 survey of Fortune 1000 companies on emerging policies and practices for the management of workplace conflict in US corporations with the findings of the Fortune 1000 survey conducted in 1997, outlined in the seminal Emerging Systems for Managing Workplace Conflict (2003), that he co-authored with Ron Seeber and Richard Fincher.

Lipsky observes that the ADR revolution in the US has effectively led to the privatisation of the US system of justice, moving a significant proportion of employment complaints from the courts and public agencies into the hands of private arbitrators and Mediators retained by employers to resolve employment disputes that would otherwise go to litigation.

According to Lipsky, the shift towards alternative dispute resolution (ADR) policies was largely driven by the litigation explosion, which drove employers to seek more appropriate mechanisms to resolve employment conflict without incurring the very high costs and delays of litigation.

The new survey entailed interviews with top attorneys in 368 Fortune 1000 corporations.

Key findings:

A growing proportion of Fortune 1000 companies have adopted ADR as their principal approach to resolving disputes:

  • 97% used mediation at least once in the previous three years (85% in 1997)

Principal reasons cited by the companies in the 2011 survey for using ADR:

  • Saves time (71%)
  • Saves money (69%)
  • Preserves good relationships (44%)
  • More satisfactory settlements (26%)
  • More satisfactory process (38%)
  • Court mandated (55%)
  • Allows parties to resolve disputes themselves (52%)

The proportion of corporations that used mediation at least once in the three years prior to 2011 survey by type of dispute:

  • Employment dispute (81%)
  • Commercial/contract disputes (80%)
  • Personal injury disputes (58%)
  • Intellectual property disputes (41%)
  • Construction disputes (39%)
  • Product liability disputes (38%)
  • Real estate disputes (32%)
  • Environmental disputes (28%)
  • Consumer rights disputes (26%)
  • Corporate finance disputes (17%)
  • Other (14%)

The findings indicate an increase in the number of F1000 companies using mediation to resolve employment disputes – from 85% in 1997 to 97% in 2011 – and a move towards the use of a wider array of ADR techniques by the companies including early neutral evaluation, early case assessment and conflict coaching.