In a previous blog post I wrote about arbitration. As a reminder, arbitration is essentially an alternative venue to litigate claims – a private venue companies are often willing to pay a lot for because it keeps disputes out of the public record and tends to be more favorable to employers. In this blog I will talk about how some companies go even further by requiring employees to not only agree to arbitration, but to agree to an entire alternative dispute resolution (ADR) process/procedure.

Theoretically, an ADR process can require, or at least attempt to require, an employee to jump through all kinds of hoops to preserve their right to pursue a claim. In reality, companies that have full ADR procedures in place tend to have similar steps. Typically, the process is a four-step process with the first two steps being entirely internal and which can be used for any issue the employee has, even issues that are not violations of the law. Then, the final two steps are reserved for only those issues that involve a violation of a legally protected right – a right the employee could seek remedy for despite the ADR procedure, likely by filing with an external administrative agency and/or filing a lawsuit in court. These final two steps are typically mediation and then arbitration.

At first glance, an ADR process might sound good to employees because it provides an opportunity to dispute issues that may be wrong or unethical even if they are not illegal. Moreover, it provides for mediation prior to arbitration where an impartial, third-party professional attempts to help both sides work together to resolve the dispute early on. Certainly, the company will sell the ADR process to its employees as a wonderful thing put in place for the benefit of its employees.

However, all too often these sometimes extremely convoluted ADR procedures do the exact opposite of helping workers facilitate a resolution by creating strict deadlines and causing procedural confusion. Meanwhile, while the company forces strict deadlines on the employee, the company often provides itself with a get out of jail free card by writing into the policy that its failure to respond to an employee’s claim within a certain timeframe will simply be considered a denial of the claim. Quite frankly, this dual standard is absurd.

To further illustrate the issue with procedural confusion, let’s think about the following example. Employee X works for a private company that is violating required health and safety protocols and creating an unsafe work environment for its workers. Employee X complains about these violations to her supervisor and reports it to the company’s compliance department. In retaliation for making health and safety complaints, the company fires Employee X.

Now, Employee X knows she would normally go to OSHA and file a whistleblower retaliation claim. However, she also knows the company has an ADR procedure which she agreed to follow when she was hired. In fact, the company even gave her another copy of it at the time it terminated her just as a friendly reminder. So now what does she do? Does she go ahead and file her complaint with OSHA? Does she file her complaint internally to initiate the ADR process? Should she file with both? Can she file with both? And also, when should she file? These are all extremely important questions because one wrong move and she could lose her ability to pursue her whistleblower claim entirely.

The safest strategy would be to file both internally to initiate the ADR process and externally with OSHA within whatever the shortest statute of limitations is. However, what happens if the employee only files externally (OSHA, EEOC, TWC, etc.)  or only files internally? The answer to that question is even more complicated and will likely depend on two things: (1) what type of claim you have, and therefore which external agency you are dealing with, and (2) what the terms of your company’s ADR procedure are.

Overall, there is no one-size-fits-all answer. If you find yourself in a position where you think you have a claim, you should consult with a Texas Employment Lawyer as soon as possible to ensure any and all deadlines are met.