Sometimes the best way to resolve an employment dispute is to stay out of the courts. Employment litigation can be expensive, time-consuming and adversarial, distracting managers and employees from performing their jobs and the company from pursuing its business goals. Well-drafted employment policies can prevent many problems in the workplace, but when inevitable disputes arise, there are effective alternative dispute resolution (ADR) options.

Mediation is a flexible ADR method in which a neutral person helps the parties work toward a negotiated settlement of their dispute. The mediator works with the parties to discover their interests and goals for resolving the matter, but does not impose any settlement on the parties. Mediation can be effective in resolving employment disputes, especially when the dispute involves a current employee or when the parties need to continue their relationship after the dispute is resolved.

Mediation is usually voluntary, although some courts have mediation programs that require the parties in certain types of cases to attempt mediation early in the case. Mediation is confidential, which may alleviate an employer's concern that resolving a dispute with one employee will set a precedent for other employees.

Practical Law has resources to assist employment lawyers in determining whether mediation is right for a particular dispute and how to effectively represent a client in a mediation, including:

Arbitration is a non-court ADR method in which an arbitrator or panel of arbitrators hears the parties' dispute and issues a binding decision to resolve the dispute. There are limited grounds under which an arbitrator's decision may be challenged. The Federal Arbitration Act (FAA) governs the basic principles of arbitration in the US, although all 50 states and the District of Columbia have arbitration laws that address issues the FAA does not address.

Arbitration is common in unionized workplaces and Practical Law has helpful resources on labor arbitration practice, including:

Employers are increasingly using arbitration in their non-union workplaces to resolve employment disputes more quickly and less expensively. Practical Law has resources to help employers draft enforceable and effective arbitration agreements, such as Drafting a Mandatory Arbitration Agreement: Best Practices Checklist and Practice Note, Contractually Shortened Statutes of Limitations for Employee Claims.

In addition, Practical Law has sample documents for state-specific arbitration agreements that comply with the laws in:

Find more helpful content in Practical Law's US Arbitration Toolkit and Settling Employment Disputes Toolkit. In addition to Practical Law's Labor & Employment offerings, we offer a full spectrum of arbitration materials in our Arbitration service.