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A Word to the Wise

BY Alfred G. Feliu
March 03, 2004

Many major employers have adopted internal dispute resolution programs designed to resolve internally employment disputes, and the numbers of such programs are only increasing. In prior years, these programs typically included a mediation step and ended in a final step of binding arbitration. Under such programs, employees were barred from opting out of the program to bring their claims in court. This is still the case with many employer dispute resolution programs. A growing number of employers, however, have moved away from this binding arbitration model and instead have provided employees with the option of opting out of the program after the mediation stage and permitting the employee to take his or her claim to court.

This is generally viewed as a positive development by the plaintiffs' bar. This “employee choice” model provides employees with the best of both worlds: an internal program that costs little or nothing to invoke while still permitting the employee to assert his or her legal rights in court.

Counsel representing an employee with a claim subject to the employer's ADR program providing such a choice needs to be cognizant, however, of two potential landmines: the possible need to exhaust internal remedies and the tolling, or better put the lack thereof, of applicable filing deadlines and statutes of limitation during the processing of claims internally.

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