Alternative Dispute Resolution: Employers' Experiences With ADR in the
Workplace (Letter Report, 08/12/97, GAO/GGD-97-157).

Pursuant to a congressional request, GAO provided information on
alternative dispute resolution (ADR), focusing on: (1) private sector
companies' and federal agencies' reasons for using ADR; (2) the types of
ADR these organizations have made available to their employees through
procedures other than those under collective bargaining agreements and
the extent to which they have put these ADR processes in place; and (3)
the results, if any, they have achieved by using ADR.

GAO noted that: (1) many private companies and federal agencies have
used ADR to avoid more formal dispute resolution processes; (2) one
reason for the use of ADR was that traditional dispute resolution
processes have been costly, both in time and money, and became
especially so as the number of discrimination complaints rose sharply in
the early 1990s; (3) through a broad examination of ADR use involving
interview with experts and practitioners, a review of the literature,
and GAO's earlier survey of the private sector, GAO identified five main
ADR methods available to private sector employees and, in some
instances, to federal employees: ombudsmen, mediation, peer panels,
management review and dispute resolution boards, and arbitration; (4)
according to GAO's survey, in 1994, about 52 percent of private
companies reported having some type of ADR process in place of
discrimination complaints; these companies reported that they generally
instituted ADR organizationwide; (5) private companies responding to
GAO's survey generally reported employing a wider variety of ADR methods
than did federal agencies; (6) experts and officials at organizations
using ADR generally considered it to be successful in resolving
workplace disputes; (7) the five companies and five federal agencies
that GAO studied as case illustrations reported having varied but
generally positive experiences with ADR; (8) most of the organizations
GAO studied gave only limited attention to evaluating the results of
their ADR programs and the time or cost savings these programs may have
generated; (9) data were limited regarding time and cost savings; (10)
the lessons that the organizations reported learning in planning,
implementing, and evaluating their ADR programs varied, but many of them
centered on ensuring that the appropriate ADR methods were adopted and
that they fulfilled their potential; and (11) some of the lessons
organizations reported learning were: (a) the importance of top
management commitment in establishing and maintaining a program; (b) the
importance of involving employees in the development of their ADR
programs; (c) the advantage of intervening in the early stages of
disputes so as to focus more on underlying interests than on hardened
positions; (d) the necessity to balance the desire to settle and close
cases against the need for fairness to all concerned; and (e) that ADR
programs could help improve managers' understanding of the roots of
conflict in their organizations.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-97-157
     TITLE:  Alternative Dispute Resolution: Employers' Experiences With 
             ADR in the Workplace
      DATE:  08/12/97
   SUBJECT:  Arbitrators
             Employment discrimination
             Federal employees
             Mediators
             Administrative remedies
             Federal personnel administrative law
             Non-government enterprises
             Surveys

             
******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO report.  Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved.  Major          **
** divisions and subdivisions of the text, such as Chapters,    **
** Sections, and Appendixes, are identified by double and       **
** single lines.  The numbers on the right end of these lines   **
** indicate the position of each of the subsections in the      **
** document outline.  These numbers do NOT correspond with the  **
** page numbers of the printed product.                         **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
** A printed copy of this report may be obtained from the GAO   **
** Document Distribution Center.  For further details, please   **
** send an e-mail message to:                                   **
**                                                              **
**                                            **
**                                                              **
** with the message 'info' in the body.                         **
******************************************************************


Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Civil Service, Committee on
Government Reform and Oversight, House of Representatives

August 1997

ALTERNATIVE DISPUTE RESOLUTION -
EMPLOYERS' EXPERIENCES WITH ADR IN
THE WORKPLACE

GAO/GGD-97-157

ADR In the Workplace

(410038)


Abbreviations
=============================================================== ABBREV

  AAA - American Arbitration Association
  ADR - alternative dispute resolution
  ACUS - Administrative Conference of the United States
  EEAC - Equal Employment Advisory Council
  EEO - equal employment opportunity
  EEOC - Equal Employment Opportunity Commission
  FMCS - Federal Mediation and Conciliation Service
  MSPB - Merit Systems Protection Board
  OPM - Office of Personnel Management
  S/EEOCR - U.S.  Department of State Office of Equal Employment
     Opportunity and Civil Rights

Letter
=============================================================== LETTER


B-274297

August 12, 1997

The Honorable John L.  Mica
Chairman, Subcommittee on Civil Service
Committee on Government Reform and Oversight
House of Representatives

Dear Mr.  Chairman: 

In testimony before your Subcommittee in late 1995, we stated that
the administrative redress system for federal employees was
inefficient, time consuming, and costly.\1 A number of federal
agencies have recognized these problems and, in recent years, have
looked for some means of alternative dispute resolution (ADR) to help
lessen the burdens associated with the redress system, which was
designed to protect federal employees against arbitrary agency
actions and prohibited personnel practices, such as discrimination or
retaliation for whistleblowing.  Based not only on the fact that
Congress has endorsed ADR in the past, but also that individual
agencies have taken ADR initiatives and the Equal Employment
Opportunity Commission (EEOC) has encouraged its use, it is apparent
that policymakers and agency managers have been considering the
advantages of using ADR to resolve federal workplace disputes. 

As part of the Subcommittee's efforts to reform the redress system,
you asked us to provide information on (1) private sector companies'
and federal agencies' reasons for using ADR; (2) the types of ADR
these organizations have made available to their employees through
procedures other than those under collective bargaining agreements
and the extent to which they have put these ADR processes in place;
and (3) the results, if any, they have achieved by using ADR.  You
also requested that, for illustrative purposes, we select a small
number of private companies and federal agencies and examine (1)
their experiences in planning and implementing ADR processes; (2) the
extent to which they evaluated their ADR processes and the extent to
which they reported that these processes have been successful in
resolving workplace disputes and in lessening the costs--in time and
money-- associated with formal redress processes and litigation; and
(3) the lessons they reported learning in planning, implementing, and
evaluating their ADR processes. 


--------------------
\1 Federal Employee Redress:  An Opportunity for Reform
(GAO/T-GGD-96-42, Nov.  29, 1995). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Many private companies and federal agencies have used ADR to avoid
more formal dispute resolution processes:  lawsuits and--especially
in the federal sector--formal administrative redress procedures.  One
reason for the use of ADR, as reflected in the literature and
reported by private and federal officials, was that traditional
dispute resolution processes have been costly, in both time and
money, and became especially so as the number of discrimination
complaints rose sharply in the early 1990s.  In addition, a number of
new laws and regulatory changes in the 1990s encouraged organizations
to use ADR in workplace disputes.  Moreover, ADR often focuses on
disputants' underlying interests; and the EEOC, among others, has
noted the potential advantages of techniques that focus on
understanding the disputants' underlying interests over techniques
that focus on the validity of their positions (e.g., a complaint of
discrimination or a defense against a complaint). 

Through a broad examination of ADR use involving interviews with
experts and practitioners, a review of the literature, and our
earlier survey of the private sector,\2

we identified five main ADR methods available to private sector
employees and, in some instances, to federal employees:  ombudsmen,
mediation, peer panels, management review and dispute resolution
boards, and arbitration.  According to our survey, in 1994, about 52
percent of private companies reported having some type of ADR process
in place for discrimination complaints; these companies reported that
they generally instituted ADR organizationwide.  In contrast, 31
percent of the 75 federal agencies responding to a 1994 EEOC survey
made ADR available for discrimination complaints.  By 1996, this
percentage had increased to 49 percent, based on responses from 87
federal agencies to an October 1996 EEOC survey.  But as our review
of the literature, our interviews with experts and knowledgeable
officials, and our case illustrations showed, ADR availability or use
was not pervasive--or even necessarily widespread--within agencies
that reported having some ADR capability. 

Private companies responding to our survey generally reported
employing a wider variety of ADR methods than did federal agencies. 
Of the private firms that reported using ADR, about 80 percent used
mediation, about 39 percent used peer review panels, and about 19
percent used arbitration.  EEOC's surveys showed that most federal
agencies that reported having ADR used only mediation. 

No comprehensive data were available on ADR results in the private
and federal sectors; but, as our broad examination of ADR use and our
case illustrations showed, experts and officials at organizations
using ADR generally considered it to be successful in resolving
workplace disputes, thereby avoiding more formal dispute resolution
processes.  Comprehensive data were unavailable on the extent to
which ADR has saved organizations time and money, largely because
most ADR programs are relatively new, and because time and cost
savings have not been widely tracked or evaluated.  Experts and
officials at organizations using ADR generally believed, however,
that avoiding litigation or more formal redress processes produced
savings. 

The five companies and five federal agencies that we studied as case
illustrations reported having varied but generally positive
experiences with ADR (only one--the Department of Agriculture--found
serious flaws in its ADR program).  Officials at nine of these
organizations reported that efforts had been made to involve
employees in developing their ADR programs, to train key
participants, and to make their ADR programs known and understandable
throughout the organization.  The fact that the companies were not
subject to the rules that govern the federal employee administrative
redress system, which provides for hearings before an administrative
judge, allowed them to establish ADR practices--particularly in the
area of arbitration--that are not found among federal agencies.  The
extent to which the companies established these practices varied from
one company to the next. 

Most of the organizations we studied gave only limited attention to
evaluating the results of their ADR programs and the time or cost
savings these programs may have generated.  All 10 organizations
gathered at least some data on dispute resolution rates, although
these data were not generally conclusive.  To the extent that data
were available, mediation, peer panels, management review boards, and
arbitration (which is generally not available to federal employees
outside of the collective bargaining process) all appeared to
contribute to the resolution of workplace disputes.  Mediation
appeared to be particularly useful, leading to resolution in a high
percentage of cases in all but one of the organizations we studied. 

Data were limited regarding time and cost savings.  None of the
companies and only two of the agencies reported data on the amount of
time saved by the use of ADR.  The two federal agencies indicated
that using ADR had cut about one-third to one-half the time it had
normally taken to resolve discrimination complaints.  (Two other
agencies indicated that ADR processes, by resolving discrimination
complaints in their early stages, had reduced the number of formal
complaints that were filed, along with the necessity to spend time on
the associated formal procedures.) Cost savings were difficult to
establish.  Only one company and one federal agency had performed
evaluations that produced data regarding cost savings.  The company
reported that with ADR in place, the overall cost of dealing with
employment conflicts, including the total cost of the ADR program,
was now less than half of what the company used to spend on legal
fees for employment-related lawsuits.  The agency that had gathered
data on cost savings found that, when the cost of settlements was
factored in, it was unclear whether its ADR process was less costly
than the traditional equal employment opportunity (EEO) complaint
process. 

The lessons that the organizations we studied reported learning in
planning, implementing, and evaluating their ADR programs varied, but
many of them centered on ensuring that the appropriate ADR methods
were adopted and that they fulfilled their potential.  Some of the
lessons organizations reported learning were the importance of top
management commitment in establishing and maintaining a program, the
importance of involving employees in the development of their ADR
programs, the advantage of intervening in the early stages of
disputes so as to focus more on underlying interests than on hardened
positions, the necessity to balance the desire to settle and close
cases against the need for fairness to all concerned, and the fact
that ADR programs could help improve managers' understanding of the
roots of conflict in their organizations. 


--------------------
\2 We sent a questionnaire to a nationally representative sample of
businesses with more than 100 employees according to reports filed
with EEOC in 1992.  Survey results were reported in Employment
Discrimination:  Most Private-Sector Employers Use Alternative
Dispute Resolution (GAO/HEHS-95-150, July 5, 1995). 


   BACKGROUND
------------------------------------------------------------ Letter :2

Federal employees have long had substantial workplace protections
through an administrative redress system that was designed to
safeguard them against arbitrary agency actions and prohibited
personnel practices, such as discrimination or retaliation for
whistleblowing.  But the redress system--especially insofar as it
affects workplace disputes involving claims of discrimination--has
been criticized by federal managers, as well as by employee
representatives, as adversarial, inefficient, time consuming, and
costly. 

For executive branch employees, the first opportunity for redress is
within their own agencies.  For matters that are not resolved at the
agency level, or not handled solely under the terms of collective
bargaining agreements, three independent federal bodies process
employee complaints and appeals. 

  -- EEOC adjudicates employee complaints of discrimination, which
     generally are investigated first by the agencies for which the
     employees work;

  -- the Merit Systems Protection Board (MSPB) adjudicates, among
     other things, employee appeals of firings or suspensions of more
     than 14 days; and

  -- the Office of Special Counsel investigates employee complaints
     of prohibited personnel practices--in particular, retaliation
     for whistleblowing. 

In some cases, a single complaint may be handled by more than one of
these agencies, adding to the time and costs involved in its
resolution.  Finally, the law allows for further review of these
agencies' decisions in the federal courts. 

The Administrative Dispute Resolution Act of 1990, which required
federal agencies to develop ADR policies, charged the Administrative
Conference of the United States (ACUS) with (1) assisting agencies in
developing ADR policies and (2) compiling information on agencies'
use of ADR.  The act sunset in September 1995, and ACUS was abolished
in October 1995.  The Administrative Dispute Resolution Act of 1996
permanently reauthorized the 1990 act and charged the President with
naming a successor to ACUS to facilitate and encourage agency use of
ADR.  As of July 1997, no successor had been designated.\3

The term ADR covers a variety of dispute resolution techniques,
usually involving intervention or facilitation by a neutral third
party.  ADR methods--arbitration and mediation in particular--date
back to the early 1900s.  Originally, ADR was used mostly to resolve
disputes involving employees who were covered by collective
bargaining agreements.  More recently, organizations began applying
ADR methods to disputes involving other employees as well.\4

Although ADR has been used as a tool--especially in resolving
disputes that arise from miscommunication, personality conflicts, or
alleged discrimination--many experts and practitioners cautioned that
ADR is not appropriate in all cases.  Inappropriate situations, they
said, include incidents of violence or cases of severe sexual
harassment.  Under the Administrative Dispute Resolution Act, ADR is
also considered inappropriate when authoritative resolution of a
matter is required for precedential value, the matter in dispute has
significant government policy implications, or it is important to
produce a full public record of the proceedings. 


--------------------
\3 When ACUS was abolished, the Federal Mediation and Conciliation
Service (FMCS), which shared responsibility with ACUS for helping
agencies develop ADR policies, assumed sponsorship of the Federal ADR
Network (FAN), an interagency group that provides assistance to
agencies in designing ADR systems, obtaining resources, or acquiring
neutrals.  In addition, FMCS assumed responsibility for ACUS' ADR
research and clearinghouse activities. 

\4 In discussing the availability of ADR to federal employees, this
report does not include procedures available under collective
bargaining process. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3

To provide information on private sector companies' and federal
agencies' reasons for using ADR, the types of ADR these organizations
have made available through procedures other than those under
collective bargaining agreements, the extent to which they have put
these processes in place, and the results they may have achieved, we
spoke with experts and practitioners knowledgeable about the use of
ADR in the private and federal sectors, and reviewed the literature
about ADR and information available from past reports and surveys. 

To illustrate private and federal sector organizations' experiences
in planning and implementing ADR processes, the extent to which they
evaluated their ADR processes and the extent to which they reported
that these processes have been successful in resolving workplace
disputes and lessening costs, and the lessons they reported having
learned, we judgmentally selected for study five private sector
companies and five federal agencies that had some experience with
ADR.  These organizations reflected a range of ADR practices; had ADR
processes in place a sufficient length of time to provide information
about use, outcome, and lessons learned; and had at least some use or
outcome data available.  In the private sector, we studied Brown &
Root, Inc.; Hughes Electronics Corporation; the Polaroid Corporation;
Rockwell International Corporation; and TRW Inc.  In the federal
sector, we studied the Department of Agriculture, the Department of
the Air Force, the Postal Service,\5 the Department of State, and the
Walter Reed Army Medical Center.  We also studied the Seattle Federal
Executive Board's Interagency ADR Consortium, a "shared neutrals"
program, which provides for the sharing of ADR resources among
federal agencies in the Seattle area.  In doing these studies, we
obtained information about the organizations either on-site or from
telephone interviews with responsible officials, from material and
data they provided, and from published information. 

There are limitations to the information we present in this report. 
First, the case illustrations and the observations that we are
reporting only illustrate ADR approaches that have been put into
practice and are not intended to be considered "best practices."
Second, organizations identified through literature searches and
leads from experts in the field are more likely than not to have
reported successful outcomes.  Third, the participation of the
private sector companies in our study was voluntary, and the
companies reserved the right to withhold proprietary information;
this limited our ability to analyze their programs with the assurance
that we had obtained all relevant data.  Fourth, the views we
obtained were those of agency and company management and not of
employees.  Finally, we did not verify the data that were provided to
us. 

We conducted our review between July 1996 and April 1997 in
accordance with generally accepted government auditing standards.  We
sent copies of a draft of this report to the Chairman, EEOC; the
Director, FMCS; and the Director, Office of Personnel Management
(OPM) for review and comment.  In addition, we asked cognizant
officials from each case illustration organization to review and
comment on a draft of the case illustration describing their
respective organization's ADR experiences.  Their comments are
presented at the end of this letter.  Details of our objectives,
scope, and methodology appear in appendix I. 


--------------------
\5 In this report we included the Postal Service under the grouping
of "federal agencies," even though it is an independent governmental
establishment.  We have done so because the Postal Service is bound
by most of the same discrimination complaint processes that apply to
most federal agencies.  A Postal Service worker who alleges
discrimination can take two courses of action concurrently:  (1) the
employee can file a discrimination complaint under the federal
employee discrimination complaint process, and also (2) file a
grievance through procedures covered by the union's collective
bargaining agreement.  Although both courses of action are available
to Postal Service workers, this report deals only with the ADR
processes that the Postal Service has made available to workers who
file discrimination complaints under the federal employee
discrimination complaint process. 


   ORGANIZATIONS TURNED TO ADR FOR
   SEVERAL REPORTED REASONS
------------------------------------------------------------ Letter :4

According to the ADR literature as well as experts and practitioners
in the private and federal sectors, organizations turned to ADR as a
means of avoiding more formal dispute resolution processes.  Many
private sector firms turned to ADR to supplement their traditional
ways of handling disputes (e.g., through the chain of command) with
the intent of reducing the number of litigations.  For federal
organizations, ADR offered a way to avoid the burdens associated with
both the administrative redress system and litigation by federal
employees.\6 Additionally, the use of ADR in the private and federal
sectors was spurred in the early 1990s by a dramatic increase in the
number of discrimination complaints, along with the costs, time, and
frustration involved in attempting to resolve them.  Several new laws
and regulatory changes made companies and agencies even more likely
to develop ADR processes.  Moreover, in some quarters--such as
EEOC--a recognition emerged that the interest-based approach that is
the basis for some ADR techniques can be a constructive alternative
to adversarial, position-based processes. 


--------------------
\6 For further discussion, see Civil Service Reform:  Redress System
Implications of the Omnibus Civil Service Reform Act of 1996
(GAO/T-GGD-96-160, July 16, 1996). 


      ORGANIZATIONS TURNED TO ADR
      TO AVOID THE TIME AND COSTS
      INVOLVED IN RESOLVING
      WORKPLACE DISPUTES
---------------------------------------------------------- Letter :4.1

Private and federal organizations alike turned to ADR to reduce their
involvement in costly and time-consuming processes:  lawsuits
and--especially in the federal sector--formal administrative redress
procedures.  In 1995, we reported that private employers were
adopting ADR approaches because of their concerns about the costs--in
time, money, and good employee relationships--of dealing with
employment-related lawsuits and discrimination complaints.\7 Among
the five private companies we studied as case illustrations, four
cited significant litigation costs as a reason for developing their
ADR processes.  One of the companies--Brown & Root--turned to ADR
after spending over $400,000 to defend itself in a discrimination
suit.  Although the company prevailed in the case, an official
referred to it as "the case nobody won," because of the human and
financial costs it involved.  (See app.  II.)

Among federal agencies, the primary reason officials reported for
making ADR processes available has been to avoid the
costs--especially those involving time and organizational
efficiency--associated with the redress system.\8 For example,
according to EEOC data, the average length of time it took for
federal agencies to close a discrimination complaint in fiscal year
1995 was 305 days.  For cases that involved both a hearing and a
later appeal to EEOC, the average processing time was 801 days.\9 As
we stated in our November 1995 testimony, the prospect of having to
deal with the lengthy and complex dispute resolution system can have
a broader impact:  it can affect the willingness of federal managers
to deal with conduct and performance issues. 


--------------------
\7 Employment Discrimination:  Most Private-Sector Employers Use
Alternative Dispute Resolution (GAO/HEHS-95-150, July 5, 1995). 

\8 Individual federal agencies do not bear all of the costs of
redress.  They do not pay for the services of EEOC and MSPB
administrative judges or the cost of Justice Department defense
services.  In addition, agencies do not generally pay the costs of
court judgments or settlements resulting from discrimination
lawsuits; these costs are generally paid from the Judgment Fund,
which provides a permanent indefinite appropriation to pay such
costs.  The Postal Service is an exception; it is required to use its
own funds to pay judgment and settlement costs resulting from
lawsuits. 

\9 EEOC reported that for cases closed in fiscal year 1995 that
involved a hearing, the average processing time was 572 days.  The
average processing time for a subsequent appeal to EEOC was 229 days
in fiscal year 1995. 


      INTEREST IN ADR GREW WITH
      THE RISING TIDE OF
      DISCRIMINATION COMPLAINTS
---------------------------------------------------------- Letter :4.2

In both the private and federal sectors, the time and cost pressures
that helped spur the use of ADR increased when the number of
discrimination complaints rose sharply in the early 1990s.  In the
private sector, the number of discrimination complaints filed with
EEOC\10 grew by 43 percent between fiscal years 1991 and 1994--from
63,898 to 91,189--before beginning to decline.  In the federal
sector, the increase in the number of discrimination complaints filed
with federal agencies\11 was also substantial, rising by 55 percent
between fiscal years 1991 and 1995--from 17,696 to 27,472.\12 In
December 1994, the Commission on the Future of Worker-Management
Relations reported that the rise in complaints lodged with
administrative agencies and the increase in employment litigation had
led employers, employee groups, and lawmakers to seek
alternatives.\13

The increase in discrimination complaints in the early 1990s can be
attributed to several factors, according to EEOC, dispute resolution
experts, and officials of organizations that we studied.  They said
that downsizing efforts resulted in a surge of complaints in both the
private and federal sectors.  In addition, the Americans with
Disabilities Act of 1990 established new grounds for
employment-related complaints by the disabled.  (Federal workers had
gained similar protections under the Rehabilitation Act of 1973.)
Further, the Civil Rights Act of 1991 allows for the award of
compensatory damages of up to $300,000 to employees in cases where
the employer has engaged in unlawful intentional discrimination. 
While monetary damages had previously been available to private
sector complainants, under the Civil Rights Act of 1991 federal as
well as private sector workers can be awarded compensatory damages,
and private sector workers can also receive punitive damages in
certain circumstances.  The act also provided for jury trials;
according to the literature we reviewed, in jury trials, a plaintiff
has a greater chance of prevailing and receiving a higher award than
in a hearing before a judge alone.  At each of the five federal
agencies we studied as case illustrations, officials said the
increase in complaints at their agencies was driven partly by the
availability of monetary awards in addition to the previously
available forms of relief.  Officials at four federal agencies said
it was typical for a complainant to request compensatory damages,
regardless of the severity of the allegation. 


--------------------
\10 The EEOC investigates complaints filed by private sector
employees against employers.  Before a private sector worker can take
an unresolved matter to court, he or she must obtain a "right-to-sue
letter" from EEOC or a similar state or local agency. 

\11 A federal employee files a discrimination complaint with his or
her agency, which investigates the complaint in accordance with
regulations promulgated by EEOC.  EEOC adjudicates an unresolved
complaint at the request of an employee. 

\12 The number of private sector complaints declined by 14.5 percent
between fiscal years 1994 and 1996, while the increase in federal
sector complaints has continued unabated.  (Fiscal year 1996 data on
federal sector complaints were not available at the time of our
study.) EEOC attributes the abatement in private sector complaints
partly to its 1995 policy of screening and prioritizing complaints by
private sector employees.  Although EEOC has not yet introduced a
similar policy with regard to federal employees' discrimination
complaints, it is studying ways to streamline the complaint process. 

\13 The Commission of the Future of Worker-Management Relations
(commonly known as the Dunlop Commission after its chairman, former
Secretary of Labor John T.  Dunlop) was established by the President
in May 1993 and asked to investigate several issues.  One of these
issues involved what could be done to enable employers and employees
to resolve workplace problems themselves, rather than turn to state
and federal courts and government regulatory bodies.  In December
1994, the Commission completed its tasks and issued its final report. 


      RECENT LAWS AND REGULATORY
      CHANGES ENCOURAGED ADR USE
---------------------------------------------------------- Letter :4.3

New legislative and regulatory developments in the 1990s have
supported the use of ADR in resolving workplace disputes.  The
Americans with Disabilities Act of 1990 encouraged the use of ADR
where appropriate; and the Civil Rights Act of 1991 encouraged the
use of ADR in EEO complaints lodged by workers in the private and
federal sectors alike.  Other examples include the Administrative
Dispute Resolution Act of 1990, which required federal agencies to
develop policies to address the use of ADR, and the Civil Justice
Reform Act of 1990, which encouraged federal courts to use ADR in
managing their caseloads.  In addition to these statutory
encouragements, regulatory features came into being as well.  For
example, EEOC issued regulations in 1992 that encouraged the use of
ADR in the federal discrimination complaint process.\14

And in 1995, EEOC established a policy encouraging the use of ADR for
dealing with discrimination complaints by private sector employees. 


--------------------
\14 In June 1997, after we concluded our field work, EEOC's
Washington Field Office announced a program of mandatory mediation in
federal employee cases that are suitable for a hearing before an
administrative judge.  The program was expected to get under way in
July 1997.  Mediation will be conducted by mediators from EEOC and
volunteers from the D.C.  Bar Labor and Employment section. 


      SOME HAVE POINTED OUT THE
      VALUE OF INTEREST-BASED
      DISPUTE RESOLUTION
---------------------------------------------------------- Letter :4.4

Another factor in the widening adoption of ADR practices has been a
recognition that traditional methods of dispute resolution do not
always get at the real or underlying issues involved between
disputants and that methods that focus on the disputants' interests
may have advantages.  Traditional methods of dispute
resolution--lawsuits in the private sector, formal administrative
redress procedures in the federal sector--are predominately
position-based.  Simply stated, each disputant stakes out a
position--such as a complaint of discrimination or a defense against
a complaint--and hopes to win the case.  But interest-based dispute
resolution, which is the basis for some ADR techniques, focuses on
determining the disputants' underlying interests and working to
resolve their conflict at a more basic level, perhaps even bringing
about a change in the work environment in which their conflicts
developed. 

EEOC, among others, has noted the potential value of the
interest-based approach to dispute resolution in reducing the number
of formal discrimination complaints.  Reflecting on the high number
of discrimination complaints among federal employees, an EEOC study
recently concluded that ".  .  .  there may be a sizable number of
disputes in the 1614 process [so named for the regulations governing
the process--29 C.F.R.  Part 1614] which may not involve
discrimination issues at all.  They reflect, rather, basic
communications problems in the workplace.  Such issues may be brought
into the EEO process as a result of a perception that there is no
other forum available to air general workplace concerns.  There is
little question that these types of issues would be especially
conducive to resolution through an interest-based approach."\15


--------------------
\15 ADR Study, U.S.  Equal Employment Opportunity Commission, Office
of Federal Operations, Oct.  1996. 


   THE TYPES AND EXTENT OF ADR
   AVAILABLE IN THE PRIVATE AND
   FEDERAL SECTORS VARY
------------------------------------------------------------ Letter :5

ADR, a term that covers various techniques that many organizations
have used to avoid or reduce the burden of more traditional dispute
resolution processes, can include a variety of approaches, usually
involving intervention or facilitation by a neutral third party.  We
identified five main ADR methods available to many private sector
employees and, in some instances, to federal employees:  ombudsmen,
mediation, peer panels, management review and dispute resolution
boards, and arbitration.  The extent to which ADR has been made
available in the private sector has been greater than in the federal
sector; so has the variety of ADR methods generally made available to
employees. 


      ADR COVERS A RANGE OF
      METHODS FROM THE LESS FORMAL
      TO THE MORE FORMAL
---------------------------------------------------------- Letter :5.1

The ADR methods we identified in our research cover a range of
approaches.  (These approaches are briefly defined in table 1.) At
one end of the range are relatively informal processes in which a
neutral party, such as an ombudsman or mediator, assists the
disputants in crafting mutually acceptable solutions that satisfy
their respective interests.\16 At the other end are more formal
processes--such as peer panels, management review boards, and
arbitration--in which a neutral body or person may rule on the merits
of the parties' positions and impose a solution.  The less formal
processes tend to be employed at the earlier stages of disputes,
before disputants' positions have solidified; the more formal
processes tend to come into play at the later stages of disputes,
often just before the point at which grievants must decide whether or
not to take their cases to adjudicatory forums--court in the private
sector, MSPB or EEOC in the federal sector. 



                                     Table 1
                     
                             Predominant ADR Methods

                     Definitions of Predominant ADR Methods
--------------------------------------------------------------------------------
Method          Definition
--------------  ----------------------------------------------------------------
Ombudsman       A neutral third party designated by an organization to assist a
                complainant in resolving a conflict. An ombudsman provides
                confidential counseling, develops factual information, and
                attempts conciliation between disputing parties. The power of
                the ombudsman lies in his or her ability to persuade the parties
                to accept his or her recommendations. Ombudsmen are also called
                advisors.

Mediation       A process in which a trained neutral third party helps
                disputants negotiate a mutually agreeable settlement. The
                mediator has no authority and does not render a decision but may
                suggest some substantive options to encourage the parties to
                expand the range of possible resolutions under consideration.
                Any decision must be reached by the parties themselves.

Peer Review     A panel of employees (or employees and managers) who review
                evidence and listen to the parties' arguments to decide an issue
                in dispute. Peer review panel members are trained in the
                handling of sensitive issues. The panel's decision may or may
                not be binding on the parties.

Management      Similar to peer review, a panel of managers who review evidence
Review Boards   and listen to the parties' arguments to decide an issue in
                dispute. Board members are trained in the handling of sensitive
                issues. The decision of the board may or may not be binding on
                the parties. Also called dispute resolution boards.

Arbitration     An adjudicatory process in which a neutral third party is
                empowered to decide disputed issues after hearing evidence and
                arguments from the parties. The arbitrator's decision may be
                binding on the parties either through agreement or operation of
                law. Arbitration may be voluntary (i.e., where the parties agree
                to use it), or it may be mandatory and the exclusive means
                available for handling certain disputes.
--------------------------------------------------------------------------------
Source:  Adapted by GAO from materials developed by OPM and ACUS. 

For a fuller discussion of how these processes worked at the private
firms and federal agencies that we looked at in detail, see the case
illustrations (apps.  II through XI).  Table 2 shows the ADR
processes used at each of these organizations. 



                                     Table 2
                     
                     ADR Techniques Used by Selected Private
                          Companies and Federal Agencies

                                  Mediatio      Peer    Management
Organization           Ombudsman         n     Panel  Review Board   Arbitration
--------------------  ----------  --------  --------  ------------  ------------
Private Sector
--------------------------------------------------------------------------------
Brown & Root                  --        --                                   \f
Hughes Electronics            --        \a                      --           \f
Polaroid                      --        --        --            --           \g
Rockwell                                          --                         \f
TRW                                     --        --                         \g

Federal agencies
--------------------------------------------------------------------------------
Agriculture                            \b                     \c            \c
Air Force                               --
Postal Service                          --                                    \d
State                         --        --                      \e
Walter Reed Army                        --
 Medical Center
--------------------------------------------------------------------------------
Legend:

indicates use of a technique by an organization. 

\a Mediation is used infrequently at Hughes; no written policy
requires it. 

\b Mediation is a recent initiative at Agriculture. 

\c In February 1997, an internal task force recommended that
Agriculture discontinue its Dispute Resolution Boards and adopt
voluntary binding arbitration to deal with discrimination case
backlogs.  Boards were discontinued in April 1997. 

\d Binding arbitration was used in discrimination cases in a pilot
project (North Florida) but was later discontinued. 

\e A board process was used on a trial basis but was later
discontinued. 

\f Employees are required, as a condition of employment, to use
arbitration in lieu of litigation to settle workplace disputes. 
Arbitration is binding on the firm and the employee. 

\g Arbitration is not required as a condition of employment, but
employees are expected to use arbitration before taking a matter to
court, and the firm's policy is, if necessary, to seek a court order
compelling the employee to do so.  Arbitration is binding on the
company but not on the employee. 

Source:  Information provided by the organizations included in the
table. 


--------------------
\16 Facilitation is another technique used in the early stages of a
dispute, according to OPM officials.  A facilitator attempts to
improve the communication process between the parties but typically
does not become as involved as a mediator would be in the substantive
issues.  In addition, FMCS officials said another method that is
becoming more widely used in the early stages of a dispute is early
neutral evaluation, in which a neutral provides a nonbinding
evaluation that gives the parties a more objective assessment of
their positions. 


      ADR WAS MORE WIDESPREAD IN
      THE PRIVATE SECTOR AND MORE
      VARIED
---------------------------------------------------------- Letter :5.2

Overall, ADR has been more widely available among private sector
firms than among federal agencies.  In addition, ADR has been more
widely available within private firms that have it than within
federal agencies that have it.  In 1994, according to a survey we
did,\17 about 52 percent of private firms had some type of ADR
process in place for discrimination complaints.\18 In contrast, in
the federal sector, a 1994 EEOC survey\19

showed that about 31 percent of the 75 federal agencies responding to
the survey had made ADR processes available for discrimination
complaints.  For the years after 1994, no data were available on the
scope of private sector use of ADR in the workplace, but based on
discussions with experts at the American Arbitration Association, the
CPR Center for Dispute Resolution, and the Equal Employment Advisory
Council, use of ADR in the private sector has increased since 1994. 
The most recent data on the use of ADR in the federal sector are from
EEOC's 1996 survey.  Based on responses of 87 federal agencies to
that survey, the percentage of federal agencies making ADR available
had risen to 49.\20 We found, however, that in using percentages to
compare the availability of ADR in the private and public sectors, a
significant difference should be kept in mind.  According to our July
1995 report, private firms using ADR generally made it available
organizationwide.  But as our review of the literature, our
interviews with experts and knowledgeable officials, and our case
illustrations showed, ADR availability or use was not pervasive--or
even necessarily widespread--within federal agencies that reported
having some ADR capability. 

Private firms also reported that they made available a wider variety
of ADR techniques than those reported by federal agencies.  For
example, our July 1995 report showed that of the private firms using
ADR in 1994, about 80 percent used mediation, about 39 percent used
peer review panels, and about 19 percent used arbitration.  But
according to both EEOC's 1994 and 1996 surveys, most federal agencies
using ADR made only one technique available:  mediation. 

The availability of ADR techniques among our case illustrations was
consistent with the findings of previous reports and surveys.  As
shown in table 2, the private firms we studied generally used a wider
variety of ADR techniques than did the federal agencies.  The private
firms we studied had from two to five ADR methods in place, while the
federal agencies generally had only one.  The private firms we
studied applied ADR to all types of workplace disputes; all but one
of the federal agencies we studied--Walter Reed Army Medical
Center--tended to limit the application of ADR to claims of
discrimination. 


--------------------
\17 Employment Discrimination:  Most Private-Sector Employers Use
Alternative Dispute Resolution (GAO/HEHS-95-150, July 5, 1995). 

\18 This figure includes the use of mediation, peer review, and
arbitration.  The survey did not include questions relating to the
use of ombudsmen or management review boards.  However, because very
few of the survey respondents included these techniques in response
to a survey question asking if any other dispute resolution methods
were used, we believe that the estimate of private sector ADR use
would be only marginally higher to account for companies with an
ombudsman or management review board as their only ADR technique.  In
addition, this figure does not include the use of negotiation and
fact-finding, which were widely practiced in the private sector. 
Under the Administrative Dispute Resolution Act of 1996, "settlement
negotiations" are no longer considered an ADR technique because (1)
they do not use a neutral third party and (2) Congress wanted to
clarify that standard negotiations did not fulfill the intent of the
act, according to a former ACUS official. 

\19 Cited in ADR Study, U.S.  Equal Employment Opportunity
Commission, Office of Federal Operations, Oct.  1996. 

\20 ADR Study, U.S.  Equal Employment Opportunity Commission, Office
of Federal Operations, Oct.  1996.




   COMPREHENSIVE DATA WERE
   LACKING, BUT ADR PROGRAMS WERE
   PERCEIVED AS BENEFICIAL
------------------------------------------------------------ Letter :6

No comprehensive evaluative data were available on ADR results in the
private and federal sectors, but the information we gathered in our
broad examination of ADR was largely positive, as was the additional
information we gathered in our case illustrations.  The experiences
of the specific organizations we studied was consistent with the
findings of earlier reports, surveys, and literature.  Although these
organizations varied in the extent to which they had evaluated their
ADR programs, officials at all of them generally believed these
programs had been beneficial in resolving workplace disputes. 

Most of the organizations we studied had data to show that their ADR
processes, especially mediation, resolved a high proportion of
disputes, thereby helping them avoid formal redress processes and
litigation.  Objective data were not generally available on the time
and cost savings achieved by avoiding formal redress and litigation,
nor on how the costs of dispute resolution involving ADR compared
with the costs of more traditional methods.  For the most part,
however, managers believed that avoiding formal redress and
litigation saved their organizations time and money.  The
organizations also reported that user satisfaction--another indicator
of effectiveness or the lack of it--was generally high, with the
exception of supervisors who participated in the Department of
Agriculture's dispute resolution boards. 


      ADR--ESPECIALLY
      MEDIATION--APPEARED TO BE
      USEFUL IN RESOLVING DISPUTES
---------------------------------------------------------- Letter :6.1

To the extent data were available at the organizations we studied,
mediation, peer panels, management review and dispute resolution
boards,\21 and arbitration all appeared to be useful in resolving
workplace disputes, thereby avoiding more formal dispute resolution
processes.\22 Mediation appeared particularly useful.  Table 3, which
includes all of the organizations we examined that offered mediation,
shows that mediation led to a high percentage of resolutions (at
least 59 percent) in all but one. 



                                Table 3
                
                  Experiences of Private Companies and
                  Federal Agencies That Used Mediation

                                                                 Perce
                                                   Cases  Cases     nt
                                                   media  resol  resol
Organization                 Time frame involved     ted    ved    ved
-----------------------  --  --------------------  -----  -----  -----
Private Sector\a
----------------------------------------------------------------------
Brown & Root                 June 1993 to Dec.       155    140     90
                              1996
TRW                          Jan. 1995 to Sept.       27     16     59
                              1996

Federal agencies
----------------------------------------------------------------------
Air Force                    Oct. 1995 to Sept.    1,982  1,455     73
                              1996                    \b     \b
Postal Service,              Oct. 1994 to Dec.       188    139     74
 North Florida                1996
Postal Service,              Oct. 1988 to June     1,714  1,605     94
 Southern California          1992,
                              Oct. 1993 to June
                              1994,
                              and
                              Oct. 1994 to Sept.
                              1996
State                        May 1995 to Dec.          8      3     38
                              1996
Walter Reed Army             Oct. 1994 to Sept.      160    108     68
 Medical Center               1996
----------------------------------------------------------------------
\a Polaroid routinely offered mediation but did not provide data. 

\b Predominately mediation but includes other early stage ADR
techniques. 

Source:  Data provided by the organizations studied. 

The Seattle Interagency ADR Consortium is not included in table 3
because it is neither a company nor a federal agency.  The Consortium
reported resolving 153 of 171 cases (89 percent) mediated between May
1993 and February 1997.  Overall, the reported resolution rates for
the Seattle Interagency ADR Consortium and the private and federal
organizations using mediation were similar to rates reported in the
literature and in past studies.  The Justice Center of Atlanta, for
example, reported a resolution rate of about 70 percent among the
more than 50,000 cases it has mediated since 1977.\23 The private
sector organizations we studied applied mediation to a variety of
workplace disputes, but whether the resolution rates varied with the
nature of the dispute was unknown.  Among the federal agencies we
studied, only one--Walter Reed Army Medical Center--applied mediation
to a variety of workplace disputes.  At Walter Reed's ADR Center, the
resolution rate varied with the nature of the dispute:  83 percent
for disputes that the center classified as "communication" cases, 67
percent for EEO cases, and 43 percent for cases involving
disciplinary actions.  The other three agencies using mediation
generally used this technique almost exclusively in cases of alleged
discrimination.\24

Among three of the four federal agencies we studied with experience
in mediation, the limited data available suggested that mediation was
more useful than the traditional processes for resolving
discrimination complaints.  For example, data from the Postal
Service's Southern California EEO Processing Center showed that from
fiscal year 1988 to fiscal year 1996, about 94 percent of the
informal cases that were mediated were settled, compared with 57
percent of those that went through traditional counseling. 

Peer panels and management review boards also contributed to bringing
cases to closure at the organizations we examined.  Moreover, in the
four private firms, where employees receiving unfavorable decisions
through the peer or management review process could take their
complaints to arbitration, relatively few did.  (See Hughes
Electronics and Polaroid case illustrations, apps.  III and IV.) The
one federal agency we studied that used a board process to resolve
formal discrimination complaints--Agriculture--collected data on
results during a pilot study and found that of the 32 cases heard, 23
(72 percent) were settled on the day of the hearing. 

Arbitration has not traditionally been one of the procedures made
available to federal employees seeking redress outside the terms of
collective bargain agreements.  But, according to the ADR Counsel at
the Federal Mediation and Conciliation Service, the laws and
regulations governing matters appealable to EEOC and MSPB do not
prohibit its use.  The Administrative Dispute Resolution Acts of 1990
and 1996 allow federal agencies to use arbitration if all the parties
consent to its use, so long as the agency does not require any
participant to consent to arbitration as a condition of entering into
a contract or obtaining a benefit (e.g., employment).\25 The 1996 act
also requires that before using binding arbitration, the agency
consult with the Department of Justice on its appropriateness.  The
act also requires that the arbitrator interpret and apply relevant
statutory and regulatory requirements, legal procedures, and policy
directives. 

More widely available in the private sector than in the federal
sector, arbitration was available to employees outside the collective
bargaining process at all five companies we studied.\26 All five
companies reported that arbitration helped them avoid or reduce the
amount of employment-related litigation.  Moreover, at Rockwell, the
company's Assistant General Counsel said he believed that in many
cases the mere availability of arbitration made it easier for the
company and former or current employees to resolve disputes without
resorting to either arbitration or litigation.  Similarly, TRW and
Brown & Root officials told us that having an arbitration program
opened the door to settlements; at Brown & Root, 43 of 74 arbitration
requests between June 1993 and December 1996 were either settled or
dropped without an arbitration decision. 


--------------------
\21 Officials at Agriculture found Dispute Resolution Boards were
helpful with the discrimination complaint inventory.  The boards were
criticized, however, as being labor intensive and expensive and not
dealing with the underlying issues in disputes.  (See app.  VII.)

\22 A case was considered resolved if it was either settled or
dropped. 

\23 The Justice Center of Atlanta is a private, nonprofit
organization recognized as one of the leading institutions in the
United States for the practice and teaching of mediation. 

\24 Contacting the EEO office and consulting with a counselor is the
first step in the federal discrimination complaint process and is
commonly referred to as an "informal" complaint.  The counselor is to
explore the nature of the issue, determine whether the basis for the
issue is covered under EEO regulations, conduct a limited inquiry,
and attempt to facilitate a resolution.  If a resolution cannot be
reached, the employee can file a "formal" written complaint with the
agency. 

\25 At the time of our review, Agriculture was considering the
recommendation of an agency study to incorporate voluntary binding
arbitration into its dispute resolution program on an interim basis
to deal with its backlog of discrimination cases.  Also, under
authority contained in legislation exempting it from most federal
personnel laws, the Federal Aviation Administration has established a
three-member panel to hear appeals made by its nonbargaining unit
employees of adverse personnel actions previously appealed to MSPB. 
The panel is composed of a management representative, an employee
representative, and an arbitrator. 

\26 At Brown & Root, Hughes Electronics, and Rockwell, use of
arbitration in lieu of litigation is a condition of employment (see
apps.  II, III, and V).  At Polaroid and TRW, arbitration is not
mandatory, but employees are expected to use arbitration before
taking a matter to court, and the firm will, if necessary, seek a
court order compelling the employee to do so (see apps.  IV and VI). 


      ALTHOUGH COMPREHENSIVE DATA
      WERE LACKING, ADR WAS
      PERCEIVED TO HAVE SAVED TIME
      AND MONEY
---------------------------------------------------------- Letter :6.2

Comprehensive evaluative data on the extent to which ADR has saved
time and money by avoiding formal redress or litigation in the
federal and private sectors were not available, largely because (1)
most ADR programs are relatively new and (2) time and cost savings
have not been widely tracked or evaluated.  Moreover, according to
the CPR Institute for Dispute Resolution, there is no central source
of information on ADR cost savings and benefits (or even the typical
costs of litigation) in the private sector.\27 An official of the
American Arbitration Association said that information about ADR cost
savings and benefits in the private sector is limited because
companies are not always forthcoming with proprietary data and
because many companies' ADR programs are relatively new.  Similarly,
there is no central source of information on ADR cost savings and
benefits in the federal sector.  Before ACUS was abolished in October
1995, it reported on the status of federal government ADR
initiatives, stating that "there are few measurable data documenting
hard savings or substantive impact.  This is true in part because
many programs are still quite new; however, developing this type of
information has proven difficult even for established programs."\28

Likewise among the five private firms and five federal agencies we
studied, data generally were not available on the time and cost
savings achieved by avoiding redress and litigation through ADR, nor
on how the costs of dispute resolution involving ADR compared with
the costs of more traditional methods.  Nevertheless, managers said
they generally believed that by avoiding redress and litigation, ADR
saved their organizations time and money. 

Regarding time saved by the speedier resolution of disputes, data
from two of the federal agencies we studied indicated that the use of
ADR had decreased the time it had normally taken to resolve
discrimination complaints by between 36 and 52 percent.  (See case
illustrations for Agriculture and Air Force, apps.  VII and VIII.)
Data from two other agencies indicated that ADR processes, by
resolving discrimination complaints in their early stages, had
reduced the number of formal complaints filed as well as the time
required for seeing them through to resolution.  (See case
illustrations for Postal Service and Walter Reed, apps.  IX and XI.)

Regarding cost savings, objective information was sparse.  Among the
private companies we studied, Brown & Root provided the most
extensive information.  (See app.  II.) In the first 3 years in which
it used ADR, Brown & Root reported that the overall cost of dealing
with workplace disputes (including the annual cost of the ADR program
itself) was less than half of what the company had been accustomed to
spending on legal fees for employment-related litigation. 

Cost savings among federal agencies were as difficult to determine as
those among private firms.  No federal agency quantified with
precision cost savings from ADR.  The primary reason may be reflected
in the experience of Agriculture, the only federal agency in our
study that evaluated costs.  Agriculture's pilot evaluation team,
which attempted to compare the costs of Agriculture's Dispute
Resolution Boards with the traditional dispute resolution process for
EEO complaints, found that it could not do so with any precision
because of the lack of detailed records.  (See app.  VII.) The team
reported that estimates of complaint processing costs under
traditional procedures were inconsistent and that there were no data
with which to track the costs of cases processed by the boards.  With
this caveat, the team reported "it seems fairly certain" that EEO
complaint-processing costs using boards were less than those under
the traditional process.  However, when settlement costs were
considered, it was unclear whether boards were less costly because
board-facilitated settlements were more costly than settlements and
decisions in a comparison group of cases handled by the traditional
process.  The team said that creating an accurate recordkeeping
system would be critical to the operation of the boards as well as to
the EEO complaint system as a whole. 


--------------------
\27 ADR Cost Savings and Benefits Studies, CPR Institute for Dispute
Resolution, 1994. 

\28 Toward Improved Agency Dispute Resolution:  Implementing the ADR
Act, Administrative Conference of the United States, Feb.  1995. 


      REPORTED USER SATISFACTION
      GENERALLY WAS HIGH AT THE
      ORGANIZATIONS WE STUDIED
---------------------------------------------------------- Letter :6.3

Comprehensive data on user satisfaction with ADR was not available
for the private or federal sectors.  Among the organizations we
studied, five--Brown & Root, Hughes Electronics, Postal Service,
Agriculture, and Walter Reed--had surveyed their ADR program users. 
Brown & Root reported that users were satisfied with its procedures
while Hughes did not provide the results of its surveys.  (See apps. 
II and III.) Two of the three federal agencies also reported
generally high user satisfaction, but Agriculture reported
significant disparities among the parties to disputes. 

The Postal Service's survey approach was unique in that it compared
satisfaction rates among mediation users (in this case, at its North
Florida pilot) with those among participants in the traditional EEO
process (at other Postal Service locations).  The Postal Service
surveys found, for example, that 90 percent of the mediation users
believed that the process was fair, compared with 41 percent of the
participants in the traditional EEO process.  Further, 72 percent of
mediation users were satisfied with the outcomes of their disputes,
compared with 40 percent of the participants in the traditional
process.  (See app.  IX.)

Unlike the Postal Service surveys, Walter Reed's surveys were not
comparative.  Further, only employee participants in the program were
surveyed.  Of the survey respondents, 90 percent rated the overall
performance of the ADR program and of the mediators themselves from
good to excellent, 73 percent indicated that they would use the
program again, and 72 percent indicated that they would recommend the
program to others.  (See app.  XI.)

Agriculture's surveys and focus groups involving participants in its
Dispute Resolution Board process revealed that supervisors who had
been charged with discrimination had less favorable opinions of the
process than did employees and resolving officials.\29 For example,
42 percent of the supervisors did not believe the process to be fair,
compared with 17 percent of the employees and 15 percent of the
resolving officials.  Moreover, 53 percent of the supervisors were
dissatisfied with the outcomes of their disputes, compared with 25
percent of the employees and 30 percent of the resolving officials. 
According to Agriculture officials, supervisors felt the Dispute
Resolution Board process undermined their authority.  They also said
that a "settle at all costs" policy encouraged employees to file
complaints.  A recent Agriculture report recommended significant
changes in Agriculture's ADR program, including discontinuing boards. 
Agriculture discontinued the boards in April 1997.  (See app.  VII.)


--------------------
\29 Under the Dispute Resolution Board process, a "resolving
official" representing the department would be present to negotiate a
settlement with the employee. 


   THE CASE ILLUSTRATIONS:  VARIED
   BUT GENERALLY POSITIVE
   EXPERIENCES WITH ADR WERE
   REPORTED
------------------------------------------------------------ Letter :7

As reflected in the case illustrations (see apps.  II-XII), the
companies and federal agencies we studied took various approaches to
planning and implementing ADR.  Most of them made efforts to involve
employees in developing their ADR programs, to train key
participants, and to make their ADR programs known and understandable
throughout the organization.  Because the private firms were not
subject to the rules that govern the federal employee administrative
redress system, some of them had established ADR
practices--particularly in the area of arbitration--that are not
found among federal agencies.  These practices varied from one
company to the next.  While most of the organizations we studied gave
only limited attention to formally evaluating their ADR programs, the
common thread among our case illustrations was a continuing use of
ADR and a perception that ADR was worthwhile.  The lessons learned by
these organizations in planning, implementing, and evaluating their
ADR programs centered on how to ensure that the appropriate ADR
methods were used and that they fulfilled their potential. 


      EFFORTS TO INVOLVE EMPLOYEES
      AND TRAIN KEY STAFF WERE
      WIDESPREAD BUT VARIED
---------------------------------------------------------- Letter :7.1

The organizations we studied varied in the ways in which they
involved their employees in planning their ADR programs as well as
how they made employees aware of these programs.  The extent to which
these organizations involved and trained their employees related to
whether they were overhauling their dispute resolution systems or
adding or integrating into their existing systems a particular ADR
technique.  Although nine of the organizations involved their
employees in designing their ADR programs, and all but Agriculture
provided training to employees and managers who would play key roles
in the ADR process, some provided greater opportunities for
involvement or more widespread or extensive training than others. 

Officials at nine of the organizations we studied reported that
measures had been taken to make their ADR processes known and
understandable to employees.  When Hughes Electronics, for example,
initiated its dispute resolution boards, it not only trained
prospective board members in their duties, but it trained executives
and managers throughout the company in conflict resolution techniques
and introduced all employees to the new program through brochures,
newsletters, and supervisory guidance, according to the Corporate
Manager for Equal Employment Opportunity and Workforce Diversity
Programs.  To introduce its pilot mediation program, the Postal
Service conducted two 1-week conferences for managers, trained staff
as mediators in each location, and developed a video about the
program.  Walter Reed gave mediation training to its ADR Center
staff, which then conducted numerous briefings for employees.  In
addition, Walter Reed's commander issued a memorandum explaining the
ADR program and encouraging its use. 


      ORGANIZATIONS TOOK DIFFERING
      APPROACHES TO ADR
---------------------------------------------------------- Letter :7.2

Of the five main ADR methods we identified, the most widely available
were mediation and arbitration.  Seven of the organizations we
studied reported routinely making mediation available; the differing
ways in which they implemented their mediation programs illustrated a
variety of possible approaches.  All five of the companies we studied
offered arbitration, which, as noted earlier, is generally
unavailable to federal employees outside the collective bargaining
process.  The arbitration policies of the five companies illustrated
some key differences between their redress systems and those of the
federal agencies we studied. 

Mediation was the most widely used technique among the organizations
we studied.  Most of the organizations reported using both internal
and external mediators.  Among the private firms, for example, Brown
& Root and Polaroid reported they used their own employee volunteers
as mediators most of the time.  However, employees at these companies
could ask for a mediator from an external source (such as the
American Arbitration Association).  Among the federal agencies, the
Air Force selected mediators according to the issues involved--its
practice is to assign mediators to the kinds of cases in which they
specialized--and gave some consideration to the preference of the
parties involved.  The mediator could be an EEO counselor trained in
mediation or an external mediator from another Air Force
installation, another federal agency, a contractor, or a "shared
neutrals" program.  A shared neutrals program, such as the Seattle
Interagency ADR Consortium (see app.  XII) is a cooperative venture
in which federal agencies create a pool of mediators who are
available to agencies that do not have their own mediators or that
want a mediator from outside the agency. 

Variation existed in the types of issues that were subject to
mediation and in the point at which an employee could elect to use
it.  Two of the three private sector companies that reported they
regularly used mediation--Brown & Root and Polaroid--offered
mediation for a wide array of issues and at any point in the dispute
resolution process.  The other company, TRW, usually offered external
mediation as a step before arbitration.  Among the federal agencies,
the Walter Reed Army Medical Center was alone in having established
mediation for a wide array of disputes.  The others generally
reported confining the use of mediation to discrimination and to a
point very early in the discrimination complaint process.  This point
occurred after an employee had contacted his or her agency's EEO
office (the first step in the federal discrimination complaint
process) but before the employee had filed a formal complaint.  Among
the agencies we studied, mediation was offered at this point as an
alternative to the counseling that is required by the regulations
governing the discrimination complaint process. 

Just as federal employees are generally expected to exhaust the
administrative processes available to them before going to court,\30
employees of the private companies we studied were expected by their
employers to use arbitration before initiating a lawsuit.  In some
ways, arbitration is to the private sector what the administrative
redress system is to the federal sector:  for example, both are
adjudicatory in nature and intended to provide due process, and both
are meant to provide employees with a means of being heard on issues
that could be taken to court.  But the arbitration policies of the
private firms we studied provided at least two examples of ways in
which this private sector dispute resolution method can differ
significantly from the federal government's approach. 

First, at three of the firms we studied--Brown & Root, Hughes
Electronics, and Rockwell--employees were required, as a condition of
employment, to use arbitration in lieu of litigation to settle
disputes.  (See apps.  II, III, and V.) At each of these three firms,
the arbitrator's decision was binding on both the company and the
employee.  The employee's judicial recourse was limited to
petitioning a court to review the arbitration decision.\31 In
contrast, federal employees have recourse to the administrative
redress process and the courts.  A discrimination complainant who is
dissatisfied with the available administrative remedies may take his
or her case to federal district court for a de novo\32 trial. 

Second, all five of the private companies we studied required their
employees to share in the costs of arbitration.  In contrast, federal
employees do not share in the costs of the administrative redress
processes available to them.\33 Officials at each of the firms we
studied said the requirement that employees share in the costs of
arbitration was intended to ensure the impartiality of arbitrators as
well as to discourage frivolous complaints.  Sharing of arbitration
costs by employees and employers was one of the key quality standards
for private arbitration recommended by the Commission on the Future
of Worker-Management Relations. 

So that they would not discourage legitimate complaints, four of the
private firms we studied charged employees only a nominal fee or
capped the employee's share.  Two companies imposed a nominal fee: 
Brown & Root required employees to pay $50; Polaroid required them to
pay $100.  The other three companies--Hughes, Rockwell, and
TRW--required employees to pay up to half of the arbitration costs. 
But TRW capped the employee share at 2 days' gross pay, and Hughes
limited the employee share to 2 weeks' net pay in cases of hardship. 
Rockwell did not cap the employee's share. 


--------------------
\30 29 C.F.R.  Part 1614. 

\31 EEOC opposes mandatory binding arbitration as a condition of
employment because it views such policies as interfering with
individual protected rights under civil rights statutes.  Employers
with mandatory binding arbitration, such as the companies we studied,
believe that arbitration does not impinge on the substantive rights
of employees. 

\32 In a de novo trial, a matter is tried anew as if it had not been
heard before. 

\33 In addition to sharing in arbitration costs, workers at the five
private sector companies are responsible for their attorney fees and
the costs of discovery that they initiate.  Similarly, federal
workers are responsible for their attorney fees, costs of discovery
that they initiate, and related expenses, such as for copying and
mailing.  Generally, employees can recover these expenses if they are
the prevailing party. 


      EVALUATION WAS GENERALLY NOT
      EXTENSIVE, BUT ORGANIZATIONS
      CONTINUED USING ADR AND
      BELIEVED IT WAS WORTHWHILE
---------------------------------------------------------- Letter :7.3

Most of the organizations we studied gave only limited attention to
formally evaluating their ADR programs.  Among the companies, the
evaluation efforts reported by Brown & Root were the most extensive,
including routine data gathering on program costs and benefits and
employee satisfaction as well as annual evaluations by persons
outside the firm (see app.  II).  Among the federal entities, the
Postal Service had under way an extensive evaluation by an outside
consultant, and the Air Force had an evaluation in the design stage. 
Agriculture had evaluated its Dispute Resolution Boards in the pilot
phase but not in the 3 years in which the boards operated.  More
recently (between December 1996 and February 1997), Agriculture's
Civil Rights Action Team conducted 12 "listening sessions" that
included an opportunity to hear participants' perceptions of the
board process.  This was not an evaluation per se, but led to
recommendations that resulted in discontinuing the boards (see app. 
VII). 

Although extensive evaluation has generally been lacking, the
organizations we studied, as discussed earlier, almost all had
positive perceptions of the results of their ADR programs.  To the
extent data were available, they supported these perceptions,
including the belief that ADR lessened the costs--in time and
money--associated with formal redress processes and litigation. 
Brown & Root, as discussed earlier, reported that in the first 3
years of ADR use, the overall cost of dealing with workplace disputes
(including the annual cost of the ADR program itself) was less than
half of what it had been just for legal fees to cover
employment-related litigation.  Brown & Root also reported that the
number of employment-related lawsuits had been reduced to nearly
zero, and the number of cases filed with the EEOC or similar entities
had been reduced by half.  While other organizations had only limited
data, they said they believed that early resolution of disputes and
the avoidance of formal redress and litigation not only saved time
but avoided costs as well.  Perhaps the best indicator of the
organizations' belief in ADR was that all of them continued to use
some form of ADR. 

The only instance among our case illustrations in which the operation
of an ADR program was found to be seriously flawed was at
Agriculture, where the report of the Civil Rights Action Team
recommended that dispute resolution boards be discontinued (see app. 
VII).  The same report recommended that Agriculture use more
interest-based ADR techniques outside the EEO process and that
mediation and voluntary binding arbitration be used. 


      ORGANIZATIONS CITED LESSONS
      ABOUT MAKING ADR WORK
---------------------------------------------------------- Letter :7.4

The organizations we studied each cited lessons learned in planning,
implementing, and evaluating their ADR programs.  These lessons were
varied, but many of them centered on ensuring that the appropriate
ADR methods were used and that they fulfilled their potential. 

Six of the organizations reported emphasizing the need for visible
support of ADR by top management, citing the difficulty of marketing
and sustaining ADR efforts in its absence.  Four of the organizations
said they had learned the importance of involving employees in the
development of their ADR programs.  One reason was to ensure that the
choice of ADR approaches meshed with the organization's culture;
another was to establish trust in the ADR process. 

Six of the organizations said they learned that dispute resolution
efforts have a greater likelihood of success if they occur early in a
dispute before positions have solidified and underlying interests
have been obscured.  Postal Service officials, for example, said
their organization had this lesson in mind when it adopted a policy
of providing mediation of complaints within approximately 2 weeks of
a request for mediation services (see app.  IX).  Agriculture, having
found that its dispute resolution boards did not deal with the
underlying issues in workplace disputes, has begun giving mediation
training to its counselors and developing a conflict resolution
policy that encourages early intervention (see app.  VII). 

Two federal agencies--Walter Reed and Agriculture--said they learned
that special care must be given to balancing the desire to settle and
close cases against the need for fairness to employees and managers
alike.  For example, at Walter Reed, where the ADR program received
largely positive responses in its employee participant surveys, the
dispute resolution officer said he had learned that some supervisors
viewed settlements with suspicion, feeling that settlements seemed to
"give away the store." As a result, he said, resolving officials at
Walter Reed have become more judicious in making settlements.  (See
app.  XI.)

Five organizations reported finding that ADR served a purpose merely
by giving employees an opportunity to be heard.  Employees, they
said, got something worthwhile merely out of having their "day in
court." Further, four organizations also reported finding that by
following the outcomes of ADR processes, management became more aware
of the causes of workplace disputes, of the organizational policies
or decisions that led to complaints, and of systemic concerns that
had not otherwise been apparent.  Brown & Root's Associate General
Counsel for Human Resources, for example, said some of the mediation
settlements and arbitration awards alerted management to problems
within the company, and this brought about changes in its sexual
harassment and drug testing policies and procedures (see app.  II). 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :8

We sent copies of a draft of this report to the Chairman, EEOC; the
Director, FMCS; and the Director, OPM for review and comment.  In
addition, we asked cognizant officials from each case illustration
organization to review and comment on a draft of the case
illustration describing their respective organization's ADR
experiences.  We received responses from all organizations except
Polaroid; their comments were of a technical or clarifying nature. 
We considered the comments and made changes as appropriate in
finalizing this report. 


---------------------------------------------------------- Letter :8.1

We are sending copies of this report to the Ranking Minority Member
of this Subcommittee; to the Chairmen and Ranking Minority Members of
the House Committee on Government Reform and Oversight and the Senate
Committee on Governmental Affairs and its Subcommittee on
International Security, Proliferation, and Federal Services; and the
Directors of the Office of Personnel Management, the Federal
Mediation and Conciliation Service, and the Office of Management and
Budget; the Chairman of the Equal Employment Opportunity Commission;
and other interested parties.  We will also make this report
available to others upon request. 

Major contributors to this report are listed in appendix XIII. 
Please contact me at (202) 512-9039 if you or your staff have any
questions concerning this report. 

Sincerely yours,

Michael Brostek
Associate Director, Federal Management
 and Employment Issues


OBJECTIVES, SCOPE, AND METHODOLOGY
=========================================================== Appendix I

In his letter of July 1, 1996, the Chairman of the Subcommittee on
Civil Service, House Committee on Government Reform and Oversight,
asked us to assist the Subcommittee in its efforts to reform the
administrative redress system for federal employees by developing
information about federal and private sector experiences in using
alternative dispute resolution (ADR) processes to resolve workplace
disputes.  Specifically, he asked us to provide information on (1)
private sector companies' and federal agencies' reasons for using
ADR, (2) the types of ADR these organizations have made available to
their employees through procedures other than those under collective
bargaining agreements and the extent to which they have put ADR
processes in place, and (3) the results, if any, they have achieved
by using ADR.  In addition, he asked that we illustrate the practices
of selected federal agencies and private sector firms in using ADR
processes to resolve workplace disputes for employees not covered
under collective bargaining agreements by addressing the following
questions. 

1.  What were the experiences of the selected federal and private
sector employers in planning and implementing ADR processes? 

2.  To what extent did these employers evaluate their ADR processes
and to what extent did they believe that their ADR practices have
been successful in resolving workplace disputes and in lessening the
costs--in time and money--associated with formal redress procedures
and litigation? 

3.  What lessons did the selected agencies and companies report that
they learned in planning, implementing, and evaluating their ADR
processes? 

Because of the Chairman's interest in reforming the federal employee
redress system, we primarily focused on ADR use in the types of
disputes that federal employees can appeal to the Merit Systems
Protection Board (MSPB) or the Equal Employment Opportunity
Commission (EEOC), and not those generally grieved under collective
bargaining procedures.  For the private sector, we developed
information about ADR processes for employees not covered under
collective bargaining agreements. 

To develop information about federal agencies' and private sector
companies' reasons for using ADR, the types of ADR they have made
available other than those under collective bargaining agreements,
the extent to which they have put these processes in place, and
results derived from using ADR, we reviewed available literature and
spoke to experts in the field.  Among the experts with whom we spoke
were officials from MSPB, EEOC, the Office of Personnel Management
(OPM), the Administrative Conference of the United States (ACUS), the
National Academy of Public Administration, the Federal Mediation and
Conciliation Service (FMCS), the American Arbitration Association
(AAA), the CPR Center for Dispute Resolution, and the Equal
Employment Advisory Council (EEAC).  To develop information about the
types of ADR processes offered by federal employers and the extent to
which these processes are offered, we used the results of EEOC
surveys of federal agencies that were reported in February 1994 and
October 1996.\34 To develop information about the types of ADR
processes offered by private sector employers and the extent to which
these processes are offered, we used the results from one of our
surveys.\35

In identifying the predominant ADR methods used in the private and
federal sectors, we applied definitions based on materials developed
by OPM and ACUS.  Because ADR is an evolving field, there is some
inconsistency among practitioners in the terms they use to describe
their ADR approaches.  For this reason, we occasionally grouped
different organizations' ADR approaches under the same names,
although the organizations themselves called these approaches by
different names.  We discussed this practice with each of the
affected organizations and obtained their concurrence. 

To illustrate private and federal sector organizations' experiences
in planning and implementing ADR processes, the extent to which they
evaluated their ADR processes and the extent to which they reported
that these processes have been successful in resolving workplace
disputes and lessening costs, and the lessons they reported having
learned, we judgmentally selected for study five private sector
companies and five federal agencies that had had some experience with
ADR.  Because there is no readily identifiable inventory of federal
and private sector\36 ADR users, we used a variety of methods to
identify candidates for case illustrations.  To identify federal
agencies using ADR, we reviewed surveys of federal agencies by EEOC
and ACUS, reviewed literature about federal agencies using ADR,
reviewed information that federal agencies reported to EEOC, and
spoke to officials knowledgeable about ADR use in the federal
government, including officials from MSPB, EEOC, OPM, ACUS, and FMCS. 
To identify private sector companies using ADR, we reviewed available
literature and spoke to experts on the private sector's use of ADR,
including officials from the AAA, CPR Center for Dispute Resolution,
and EEAC. 

We judgmentally selected agencies and companies (1) that reflected a
range of ADR practices; (2) that had ADR processes in place a
sufficient length of time to provide information about use, outcome,
and lessons learned; and (3) that had at least some use or outcome
data available.  The federal agencies we selected were the Department
of Agriculture, the Department of the Air Force, the Postal Service,
the Department of State, and Walter Reed Army Medical Center.  We
included the Postal Service, even though it is an independent
governmental establishment, because it is bound by most of the same
rules governing the resolution of discrimination complaints that
apply to most other agencies.  We also studied the Seattle Federal
Executive Board's Interagency ADR Consortium, a shared neutrals
program in the Seattle, WA area, because it is a cooperative
interagency effort to make mediation services available at little or
no cost to users.  In the private sector, we studied the following
large companies:  Brown & Root, Inc; Hughes Electronics Corporation;
the Polaroid Corporation; Rockwell International Corporation; and TRW
Inc.  Our final selection of companies was dependent on their
willingness to participate in the study.  We obtained information
about the organizations either on-site or from telephone interviews
with responsible agency and company officials, material and data that
they provided (e.g., policies, procedures, employee handbooks,
statistical information, and evaluations), and published information. 

There are five limitations to the information we present in this
report.  First, the case illustrations and the observations that we
are reporting are not representative of a broader universe.  They are
intended only to illustrate ADR approaches that have been put into
practice and that have, to some extent, reported demonstrable
results.  We do not intend that they be considered "best practices."
Second, organizations--particularly private sector
companies--identified through literature searches and leads from
experts in the field, are more likely than not to have reported
successful outcomes.  While it is possible that some private sector
companies have had poor experiences with ADR, these companies are
less likely than others to have made their experiences public or to
have drawn attention to themselves.  Third, while federal agencies
are required to cooperate with us, the participation of the private
sector companies in our study was voluntary.  Moreover, the companies
reserved the right to withhold proprietary information, which limited
our ability to analyze their programs with the assurance that we had
obtained all relevant data.  Fourth, the views we obtained were those
of agency and company management.  We report the results of employee
or ADR participant surveys provided by some of the agencies and
companies, but we did not directly obtain the views of employees. 
Finally, we did not verify data that were provided to us; some of the
data provided was testimonial. 

We did our work in Denver, CO; New York, NY; Seattle, WA; and
Washington, D.C.  from July 1996 to April 1997 in accordance with
generally accepted government auditing standards. 


--------------------
\34 EEO ADR Survey (Feb.  1994) and ADR Study (Oct.  1996), U.S. 
Equal Employment Opportunity Commission, Office of Federal
Operations. 

\35 We sent a questionnaire to a nationally representative sample of
businesses with more than 100 employees according to reports filed
with EEOC in 1992.  The results of this survey were reported in
Employment Discrimination:  Most Private-Sector Employers Use
Alternative Dispute Resolution (GAO/HEHS-95-150, July 5, 1995). 

\36 Our survey reporting the percentage of private sector employers
using ADR did not include the names of companies. 


CASE ILLUSTRATION:  BROWN & ROOT,
INC. 
========================================================== Appendix II

Brown & Root, Inc., headquartered in Houston, Texas, provides
construction, engineering, and maintenance services worldwide. 
Together, its two business units employ about 27,000 people in the
United States, all of whom are covered by the company's alternative
dispute resolution (ADR) program.\37 The program, implemented in June
1993, includes an ombudsman-like role, mediation, and arbitration as
well as a toll-free hotline for employee assistance. 


--------------------
\37 Called the Brown & Root Dispute Resolution Program. 


   HOW THE PROCESSES WORK
-------------------------------------------------------- Appendix II:1

A Brown & Root employee unable to resolve a dispute through the chain
of command can contact the dispute resolution program administrator
or an ombudsman--at Brown & Root referred to as an advisor.  The
advisor (or the program administrator) is to provide independent and
confidential assistance to the employee, which can include such
things as simply listening to the problem, answering questions,
acting as a go-between, getting the facts, coaching the employee on
how to independently resolve the problem, and providing referrals to
other company resources.  The advisors are trained mediators and
often provide informal mediation.  Should the dispute remain
unresolved at this point, the employee can opt for in-house
mediation, provided by trained employee volunteers. 

The next two steps--external mediation and arbitration--are generally
used only for issues involving statutorily protected rights.  The
employee pays a $50 processing fee to take his or her dispute to
external mediation or arbitration; Brown & Root pays additional
costs. 

An unusual feature of Brown & Root's dispute resolution program is
its Legal Consultation Plan that provides financial assistance to
help employees obtain their own attorneys to assist them in their
employment disputes.  The employees pay a $25 deductible (for each
dispute); the plan then pays 90 percent of the attorney fees, up to a
maximum benefit of $2,500 annually. 

According to Brown & Root's dispute resolution program brochure, its
program is intended as the exclusive means for the final resolution
of employment disputes and is mandatory for all employees.  The
company advised its employees in advance of the program
implementation date of June 1993, that by continuing or accepting
employment with Brown & Root after this date, they were agreeing to
use the program, rather than the court system, to resolve all
employment-related claims against the company.  Company literature
about the program further advises that if an employee were to file a
lawsuit, Brown & Root would ask the court to dismiss the case and
refer it to the company's dispute resolution program.\38


--------------------
\38 As of December 1996, Brown & Root had obtained court orders
compelling arbitration in three cases. 


   EXPERIENCES IN DEVELOPING ADR
   PROCESSES
-------------------------------------------------------- Appendix II:2

The impetus for looking for better ways to manage employee conflicts
and resolve employment disputes grew, in part, from "the lawsuit that
nobody won," according to the Brown & Root's Associate General
Counsel for Human Resources.  In this case, the company paid over
$400,000 in legal fees to its outside counsel in successfully
defending itself in a discrimination suit.  The Associate General
Counsel said that because of the tremendous financial and human cost
of litigation, in the summer of 1992, Brown & Root assembled task
forces to evaluate its dispute resolution process.  These task forces
were composed of company managers from the legal, employee relations,
and operations functions as well as outside experts and consultants. 
A conflict management consultant interviewed nearly 300 employees
about their views on the existing dispute resolution process and on
various alternatives.  The program design resulting from the task
forces overhauled the company's dispute resolution system and
provided for the installation of processes through which employees
could bring their workplace disputes.  The program design was
approved in February 1993 and was implemented the following June.  A
communications consulting firm assisted in the marketing effort that
included briefings, mailings, and brochures. 

In implementing the program, Brown & Root established a full-time
program administration position\39 to oversee the program and trained
a cadre of employees who had volunteered to serve, as a collateral
duty, as mediators and advisors.  Between 125 and 150 employees
received 40 hours of mediation training; about 75 of them received an
additional 10 hours of advisor training.  The company also provided a
1-day orientation to between 30 and 40 human resource and training
staff, who in turn provided training to other company employees.  In
addition, Brown & Root created two management training programs as
part of the implementation strategy:  a half-day program on
interpersonal conflict management and a 16 to 20-hour course on
interorganizational conflict management.  The rest of Brown & Root's
employees were sent various pieces of literature to educate them
about the program. 


--------------------
\39 The program administrator reports to a policy committee made up
of the general counsel, employee relations vice president, and the
senior U.S.  operating officer in addition to other operating
officers. 


   RESOLVING WORKPLACE DISPUTES
   AND LESSENING THE TIME AND
   COSTS ASSOCIATED WITH REDRESS
   AND LITIGATION
-------------------------------------------------------- Appendix II:3

Brown & Root routinely collects and analyzes data to evaluate the
costs and benefits of its dispute resolution program as well as
employee satisfaction.  A key indicator of the program's success is
that of achieving prompt resolution early in a dispute, according to
the Associate General Counsel for Human Resources.  He said that,
overall, between 80 and 90 percent of disputes are resolved in 2
months or less, mostly through the advisor program.  From June 1993
through December 1996, according to information the company provided,
about 88 percent of the 1,600 cases handled were resolved without
resorting to formal mediation or arbitration.  As of December 1996,
155 cases had been mediated, with a resolution rate of 90 percent. 
Also as of December 1996, decisions had been made on 31 of 74
arbitration requests, the remainder having been settled or dropped. 
Arbitration is the lengthiest process, taking from 6 to 18 months
from the filing of a complaint to the issuing of an arbitration
decision. 

According to information provided by the company, in the dispute
resolution program's first 3 years, the overall cost of dealing with
employment conflicts, including the total cost of the program (the
program's current annual budget is about $500,000) is less than half
of what the company used to spend on legal fees for
employment-related litigations.  Legal fees alone are down about 90
percent (for the first 3 years of the program).  Settlement costs
have remained about the same since the program's inception, although
there have been more settlements under the new program.  In addition
to the operating costs of Brown & Root's dispute resolution program,
the company invested about $250,000 in development costs, including
outside consultant fees, legal fees, and the cost of mailing
literature about the program. 

Another indicator of the program's success, according to the
company's Associate General Counsel, is that the number of
employment-related lawsuits has been reduced to nearly zero, and the
number of cases filed with the Equal Employment Opportunity
Commission or similar state entities has been reduced by half. 

Brown & Root employees appear to be satisfied with the program. 
According to a speech by the Associate General Counsel, confidential
anonymous surveys of the users of the dispute resolution program
reported satisfaction with its procedures. 


   LESSONS LEARNED BY THE
   ORGANIZATION
-------------------------------------------------------- Appendix II:4

According to the company's Associate General Counsel for Human
Resources, Brown & Root has learned several lessons about what makes
a dispute resolution program effective.  One lesson learned is that
management's unwavering commitment and constant attention are
prerequisites to the growth of an effective program.  Brown & Root
said, for example, that the general counsel's active role and
organizational stature were crucial in launching the program and in
maintaining its success.  Also, Brown & Root said it learned that the
effectiveness of a program is directly related to a company's
investment in training and to its frequency of communication. 

Also crucial to creating a program that will be widely accepted, in
Brown & Root's experience, is ensuring the users' involvement in
designing the program.  The company said it learned that most
employees prefer a collaborative dispute resolution process to an
adjudicatory one. 

The company also said it learned that mediation settlements and
arbitration awards can alert management to problems within the
organization.  Upward communication by the dispute resolution program
administrator has had a like effect. 

Finally, Brown & Root said it learned the program has not been
subjected to overwhelming use by chronic complainers, and the legal
consultation plan has not been a financial burden.  As of December
1996, 149 employees had received about $169,000 under the legal
consultation program. 


CASE ILLUSTRATION:  HUGHES
ELECTRONICS CORPORATION
========================================================= Appendix III

The Hughes Electronics Corporation, headquartered in Los Angeles, CA,
designs and produces high technology systems for military,
scientific, and commercial applications.  The company's various
domestic business units employ approximately 69,000 workers--about 84
percent of whom are not covered under a collective bargaining
agreement.\40 In January 1993, Hughes added to its dispute resolution
system\41 an ombudsman-like role, a management review board, and an
arbitration process for its employees who are not covered under a
collective bargaining agreement.\42


--------------------
\40 As a result of the sale of its defense business and a
reorganization expected to take place in the latter part of 1997,
Hughes Electronics will be divested of certain business units and
retain about 15,000 employees. 

\41 Called the Employee Problem Resolution Procedure. 

\42 Some variance exists, across Hughes' business units, in the
specifics of the dispute resolution system. 


   HOW THE PROCESSES WORK
------------------------------------------------------- Appendix III:1

The first step for a Hughes employee who is unable to resolve a
grievance through the chain of command is to talk with an "executive
advisor" whose role is similar to that of an ombudsman.  The advisor,
whom the employee chooses from a pool of senior executives, helps the
employee evaluate the grievance's merits and attempts to facilitate
resolution.  Failing resolution, the employee can have a hearing
before a management review board (called the Consensus Review Board)
composed of three managers outside the chain of management of both
the employee and management respondent.\43 The board convenes within
60 days of the date of a written complaint, meets with each party
separately, and issues its decision usually within 10 working days. 
The executive advisor may help the employee prepare for the hearing
and assist the employee during the hearing.  The board can order
corrective action, such as rescinding a discharge or modifying a
performance rating, but it cannot alter company policy or award
monetary damages.  Although the company is bound by the board's
decision, the employee may request arbitration if dissatisfied. 

Arbitration, the final step in Hughes' dispute resolution process, is
mandatory for employees hired after January 1, 1993, who are
required, as a condition of employment, to sign an agreement to use
binding arbitration to resolve disputes not resolved through other
processes.  For employees hired before January 1993, arbitration is
optional.  Whether mandatory or elected, arbitration is binding on
both the company and the employee.\44 An arbitrator can award
remedies, including monetary damages, the same as a court can. 
Arbitration costs are divided equally between the disputant and the
company.  The cost-sharing arrangement for arbitration, as explained
by Hughes' Corporate Manager for Equal Employment Opportunity and
Workforce Diversity Programs, was to let all parties to a dispute
have a stake in the process and to help avoid frivolous use of
arbitration.  In cases of hardship, however, the company will limit
the employee's share to 2 weeks' net pay. 


--------------------
\43 Management selects the board members from a pool of senior
executives and managers. 

\44 If an employee hired after January 1, 1993, bypasses binding
arbitration and files a lawsuit, Hughes will ask the court to dismiss
the suit and compel use of the company processes. 


   EXPERIENCES IN DEVELOPING ADR
   PROCESSES
------------------------------------------------------- Appendix III:2

The rising costs of employment-related litigation served as the
catalyst for Hughes to change its program.\45 According to the
Corporate Manager for Equal Employment Opportunity and Workforce
Diversity Programs, the company researched the "best practices" in
dispute resolution used by other companies.  The company also
conducted a "cultural audit" to find out what types of complaints
were being surfaced, what the issues were, who was complaining, and
what workplace values were prevalent.  Additionally, according to an
article coauthored by Hughes' Vice President for Workforce Diversity,
employee focus groups and surveys showed that employees considered
the existing dispute resolution program too time consuming and too
management oriented and felt that it denied employees the opportunity
to tell their own stories.\46 Hughes also used pilot tests to gauge
the likely success of various ADR techniques. 

In implementing the program, Hughes trained prospective board members
in how to conduct hearings, assess the merits of parties' arguments,
and render fair and impartial decisions.  Hughes also trained
executives and managers throughout the company in conflict resolution
techniques, and educated employees--through brochures, supervisory
guidance, and newsletters--about the new program, according to the
Corporate Manager for Equal Employment Opportunity and Workforce
Diversity Programs.  Hughes rolled out the new program in January
1993. 


--------------------
\45 David R.  Barclay and William A.  Carmell, "Benefits of a
Resolution-Centered ADR Program," Corporate Counsel's Guide: 
Alternative Dispute Resolution in the Employment Context, Business
Laws Inc., ch.  16 (Chesterland, Ohio:  Dec.  1995).  Mr.  Barclay is
Hughes' Vice President for Workforce Diversity; Mr.  Carmell is a
labor and employment attorney with experience in developing
alternative dispute resolution programs. 

\46 Ibid. 


   RESOLVING WORKPLACE DISPUTES
   AND LESSENING THE TIME AND
   COSTS ASSOCIATED WITH REDRESS
   AND LITIGATION
------------------------------------------------------- Appendix III:3

According to the Corporate Manager for Equal Employment Opportunity
and Workforce Diversity Programs, Hughes has not formally evaluated
the program but views the program as successful.  Although there is
no empirical evidence to suggest that the dispute resolution system
has reduced overall costs associated with external complaints and
litigation, he cited some positive trends.  One was the downward
trend in the number of complaints filed with the Equal Employment
Opportunity Commission and corresponding state agencies, which
dropped from 154 in 1992 (the year before the new program was
implemented) to 29 in 1995, and to 45 in 1996.  Another trend was a
reduction in employment-related lawsuits, which dropped from 54 in
1992 to 23 in 1995, and to 47 in 1996.  He cited incentive programs
during downsizing and improved business conditions as possible
factors contributing to these trends. 

Most cases are closed with the decision of the management review
board.  From January 1993 through December 1996, of 80 management
review board hearings, 29 cases were decided in the employee's favor. 
Resolutions included rescinded disciplinary actions, terminations,
and layoffs as well as modifications to performance appraisals.  Of
the 51 cases not decided in the employee's favor, only 1 went to
arbitration, with the employee prevailing.  The Corporate Manager for
Equal Employment Opportunity and Workforce Diversity Programs said
one reason why others may not have chosen to arbitrate their dispute
is because they had had their "day in court" before the management
review board. 

Hughes surveys employee attitudes about the company's dispute
resolution process in two ways, according to the Corporate Manager
for Equal Employment Opportunity and Workforce Diversity Programs. 
One way is in a written survey provided to all employees who use the
company's dispute resolution program.  The other way is periodic
focus groups of employees and managers.  Although the official did
not provide the results of these processes, he said that Hughes has
not received any indication that its cost-sharing arrangement for
binding arbitration discouraged employees from pursuing their
complaints. 


   LESSONS LEARNED BY THE
   ORGANIZATION
------------------------------------------------------- Appendix III:4

Hughes has learned several lessons from its Employee Problem
Resolution Procedure.  For example, according to the aforementioned
article, the review board hearing serves an important function just
by giving an employee the chance to tell his or her own story.  Also,
according to the article, "Key to any such program is effective
planning and implementation by both in-house counsel and the human
resources department in devising a process that is not simply
adversarial, but focuses on resolution." It is also important,
according to the Corporate Manager for Equal Employment Opportunity
and Workforce Diversity Programs, to obtain employee input on how
well the dispute resolution process is working in order to add to the
trust between management and employees. 

Additionally, Hughes developed a greater understanding of the roots
of conflict and discovered the need to reexamine the role that human
resources personnel play in conflict resolution, according to the
article coauthored by Hughes' Vice President for Workforce Diversity. 
The article also stated that the company learned to focus on the
underlying reasons for reversals of company decisions, which has led
to an in-depth reexamination of the management decisions that led to
specific employee complaints. 


CASE ILLUSTRATION:  POLAROID
CORPORATION
========================================================== Appendix IV

The Polaroid Corporation, headquartered in Cambridge, MA, employs
6,500 nonunion workers in manufacturing imaging products.  Polaroid
has long offered alternative dispute resolution (ADR) techniques as
part of its traditional dispute resolution process.  Since the 1950s,
Polaroid has offered all grievants a hearing before a panel of three
company officers; and nonmanagerial employees have had access to
arbitration.  In January 1995, Polaroid added mediation, peer panels,
an ombudsman program, and a program to help grievants take part in
the dispute resolution process. 


   HOW THE PROCESSES WORK
-------------------------------------------------------- Appendix IV:1

A Polaroid employee is encouraged to use mediation at any stage of a
grievance or appeal.  The employee may choose from among 60 in-house
mediators or, if the employee prefers, an external mediator.  If the
matter is not resolved earlier in the dispute resolution process, the
employee can request a hearing before a panel of three company
officers or a peer panel.\47 Panel decisions are binding on the
company, but a panel's prerogatives are limited.  For example, a
panel may order the reinstatement of a wrongfully discharged
employee, but it cannot order Polaroid to pay damages to the
employee.  Arbitration is the final step for nonmanagerial employees
appealing disciplinary or discharge actions.  An arbitrator may award
the employee the same remedies as a court, including monetary
damages.  Although Polaroid expects its employees to use the
company's dispute resolution processes, an employee who is unable to
resolve a grievance to his or her satisfaction through those
processes can take the matter to court. 

Polaroid provides grievants with training about its dispute
resolution processes.  In addition, the company's four full-time
ombudsmen hear employee concerns, conduct investigations and
inquiries, and help employees decide on their course of action. 
Polaroid also provides coaching and training for grievants and a
company "grievance assistant" can help grievants throughout the
process by suggesting strategies, preparing written statements, and
developing oral presentations. 

With one exception, Polaroid pays all ADR program costs.  An employee
who takes his or her case to arbitration must pay $100 toward
expenses.  If the employee prevails in an arbitration hearing,
Polaroid refunds the $100 payment. 


--------------------
\47 For nonmanagerial employees, the peer panel is composed of three
nonmanagerial and two managerial-level employees.  For managerial
employees, the panel consists of three managerial-level and two
nonmanagerial employees.  Under policy changes that had been proposed
at the time of our study, Polaroid would replace officer or peer
panels with "appeal panels" composed of a variety of managerial and
nonmanagerial employees. 


   EXPERIENCES IN DEVELOPING ADR
   PROCESSES
-------------------------------------------------------- Appendix IV:2

Polaroid's current dispute resolution program has its roots in a
pilot that began in October 1993 at its plant in New Bedford, MA at
the suggestion of a small group of plant employees.  While the pilot
was under way, a Polaroid task force, assembled to redesign the
company's entire dispute resolution program, researched the best
practices of 22 companies, obtained the views of various employee
groups, and examined the results of the New Bedford pilot.  The task
force's proposals were critiqued by focus groups drawn from all
levels of company staff before being finalized and put into practice
in January 1995. 

Polaroid established the Grievance Administration Office to oversee
the appeals processes and train employees, according to the Human
Resources Manager, Corporate Dispute Resolution.  The company trained
selected employees as ombudsmen, mediators, peer panelists, and
grievance assistants.  Peer panelists, for example, were given 2 days
of training on due process and the proper conduct of hearings; and
grievance assistants were given training in company policies, problem
solving, and conflict resolution, according to information provided
by the company.  Supervisors received the same training as grievance
assistants; Polaroid's rationale was that supervisors are the first
line in preventing and resolving disputes, according to the former
Senior Corporate Counsel.  Further, Polaroid trained its human
resource management staff in facilitating conflict resolution. 
Finally, Polaroid educated its employees about the company's dispute
processes, using video presentations, small meetings, newsletters,
and other printed materials. 


   RESOLVING WORKPLACE DISPUTES
   AND LESSENING THE TIME AND
   COSTS ASSOCIATED WITH REDRESS
   AND LITIGATION
-------------------------------------------------------- Appendix IV:3

Polaroid has not formally evaluated and does not track the costs of
its ADR processes, but management officials believe that the
company's ADR processes have been successful in resolving disputes
and avoiding the time and expense associated with litigation. 

Management officials noted that most cases in Polaroid's dispute
resolution program are resolved before they reach the panel or
arbitration levels.  They said that each year, only about 30 to 40
cases are heard by peer or company officer panels (for the most part,
grievants select peer rather than company officer panels) while three
or four cases go to arbitration.  Employees have prevailed in about
one-third to one-half of the panel hearings and in about one-fourth
of arbitration hearings.  The peer panel and arbitration processes
are not very time consuming, according to Polaroid's former Senior
Corporate Counsel.  She said peer panelists generally spend several
hours in preparing for and hearing a case; they deliver their
decisions in 7 to 10 days.  An arbitration hearing usually takes
about a half day (although prehearing conferences add time to the
process) with a decision rendered within 30 days. 

Also, according to Polaroid's former Senior Corporate Counsel, no
employee has ever gone to court after losing an arbitration decision. 
She attributes this success to the fact that grievants get "their day
in court" within Polaroid's dispute resolution program. 

Polaroid officials also spoke highly of the company's experience with
mediation, which was used extensively in grievances associated with
downsizing.  They told us that mediation techniques expedited the
grievance process and, at a minimum, made settlements more likely by
clarifying the issues. 

There is some indication that employees generally have a favorable
view of the company's dispute resolution processes.  About two-thirds
of the employees Polaroid surveyed at its New Bedford plant indicated
that the pilot program as a whole was "somewhat" to "extremely"
effective. 

Although it revamped its dispute resolution system in 1995, Polaroid
is considering further revisions to decrease the resolution time for
serious cases--such as firings, which currently take 12 to 18
months--to a maximum of 14 weeks.  The policy under consideration
would require mediation to be used, reduce the number of grievance
steps below the panel and arbitration levels, and impose stricter
process time deadlines. 


   LESSONS LEARNED BY THE
   ORGANIZATION
-------------------------------------------------------- Appendix IV:4

Polaroid learned two important lessons, according to the former
Senior Corporate Counsel.  The first was that most disputes could be
resolved through informal processes.  The second lesson was that one
outgrowth of progressive dispute resolution processes is the
enhancement of personnel management.  She said that since Polaroid
provided the processes and the climate for employees to raise issues
and concerns, supervisors and managers have become more accountable
for adhering to company policies.  And because a cluster of
grievances can indicate a problem in a work unit or dissatisfaction
with a company policy, the system helps keep management aware of
systemic or organizational concerns. 


CASE ILLUSTRATION:  ROCKWELL
INTERNATIONAL CORPORATION
=========================================================== Appendix V

Rockwell International Corporation, headquartered in Seal Beach, CA,
designs and builds automation, communications, semiconductor, and
automotive products worldwide.\48 It has about 60,000 domestic
employees, 50,000 of whom are nonunion.  In May 1993, Rockwell added
arbitration to its existing dispute resolution procedures for its
nonunion employees.\49 Eight of Rockwell's 12 business units offer
peer panel review as another ADR technique to be used before
arbitration. 


--------------------
\48 In December 1996, Rockwell's aerospace and defense units were
acquired by the Boeing Corporation.  This illustration discusses
Rockwell's dispute resolution processes before the acquisition. 

\49 Rockwell's ADR program is known as the Employee Issue Resolution
Process. 


   HOW THE PROCESSES WORK
--------------------------------------------------------- Appendix V:1

A Rockwell employee who is unable to resolve a dispute through the
traditional chain of command can request a peer panel review in the
eight Rockwell business units that offer this technique.  The panel,
randomly selected by computer, has five members, three of whom are
from the same payroll group as the disputant, and two of whom are
managers.  The panel normally meets within 30 days of the request,
evaluates the facts presented, and usually decides the outcome of
cases within 1 day.  The panel can overturn or modify a disciplinary
or discharge action and can award back pay, but it cannot award
exemplary or punitive damages.  Although Rockwell is bound by the
peer panel decision, an employee who is dissatisfied with the
decision can request arbitration. 

Arbitration, the final step in Rockwell's dispute resolution process,
is mandatory for employees hired after January 1, 1993, who are
required to sign a "Mutual Agreement To Arbitrate Claims" as a
condition of employment.\50 For those hired before January 1993,
signing the agreement is voluntary, except that they cannot be
promoted into management or exercise company stock options unless
they sign the agreement.  Rockwell did not implement the arbitration
policy for all employees hired before 1993, reasoning that in
California (where many Rockwell employees reside), courts would
require specific consideration for the arbitration agreement to be
binding and would not consider merely continued employment to
constitute such consideration. 

Arbitrators can award remedies, including monetary, exemplary, and
punitive damages, just as a court can.  The disputant and the company
share arbitration costs equally, although the arbitrator may award
reasonable fees to the prevailing party.\51 The arbitrator's decision
is final and binding on both the company and the employee. 


--------------------
\50 If an employee who has signed this agreement bypasses the
company's processes and files a lawsuit, Rockwell will file a motion
in court to compel arbitration. 

\51 Rockwell's Assistant General Counsel explained that arbitrators
follow court rules in making such awards and that judges are very
reluctant to award attorney's fees to companies unless the
plaintiff's action was frivolous. 


   EXPERIENCES IN DEVELOPING ADR
   PROCESSES
--------------------------------------------------------- Appendix V:2

In 1993, after the company spent over $1 million in attorney's fees
in winning a lengthy case that alleged wrongful discharge and
handicap discrimination and having gained first-hand knowledge of the
time and expense that lawsuits can involve, Rockwell's top executives
decided to incorporate arbitration into the company's existing
dispute resolution process, according to the company's Assistant
General Counsel. 

In implementing the arbitration program, Rockwell first asked its 950
highest paid executives to sign the Mutual Agreement to Arbitrate
Claims, reasoning, the Assistant General Counsel said, that it would
not be fair to ask employees to participate in a program from which
top executives were exempted.  The arbitration program was then
communicated to employees through a letter explaining the program, an
arbitration handbook addressing questions employees would be likely
to ask, and a video about the arbitration process.  The Assistant
General Counsel said that it cost between $18,000 to $23,000 for
legal advice, developing and distributing copies of videotapes, and
printing and distributing booklets. 

Rockwell then tasked its individual business units with updating
their own dispute resolution procedures to incorporate additional ADR
approaches.  Based on the results of focus groups and other
techniques, 8 of the 12 business units incorporated peer review
panels, in addition to arbitration, into their procedures. 


   RESOLVING WORKPLACE DISPUTES
   AND LESSENING THE TIME AND
   COSTS ASSOCIATED WITH REDRESS
   AND LITIGATION
--------------------------------------------------------- Appendix V:3

Rockwell has not evaluated its ADR program but believes it has been
successful because, according to Rockwell's Assistant General
Counsel, (1) the "Mutual Agreement To Arbitrate Claims" has not been
challenged in court; (2) the company has been able to avoid the costs
of litigation and outside counsel, as the company was represented by
its own counsel in the arbitrations; and (3) only one employee who
signed the arbitration agreement has filed a lawsuit against the
company.\52

The official also said he believes that there have been numerous
instances in which the arbitration agreement made it easier for
Rockwell and a former or current employee to resolve differences
short of either arbitration or litigation.  He noted that from May
1993 (when the program started) through June 1996, only two cases
went to arbitration; the company prevailed in the first one, while
the employee received some relief in the second case.\53 A third case
was pending arbitration at the time of our study. 

The Assistant General Counsel also pointed out the effectiveness of
peer panels in resolving disputes.  Ten cases had been heard by a
peer review panel between May 1993 and June 1996, and while the
company prevailed in 9 of the 10 cases, none of them went on to
arbitration. 


--------------------
\52 At the time of our study, the company was filing a motion to
dismiss and compel arbitration. 

\53 Neither of these cases were in business units that offered peer
review. 


   LESSONS LEARNED BY THE
   ORGANIZATION
--------------------------------------------------------- Appendix V:4

Rockwell learned several lessons from its experiences, according to
the company's Assistant General Counsel.  One lesson learned was that
because many of Rockwell's top corporate executives were involved in
the wrongful discharge/handicap discrimination case by testifying
either at a trial or at a deposition, they were keenly aware of the
time and costs involved in employment litigation.  This led to a
partnership and shared vision among the top legal and human resource
officials to exploring ways to reduce such time and costs. 

Another lesson the Assistant General Counsel said the company learned
is that for an arbitration process to be accepted, a good
communications process is needed on how the arbitration process
works.  Rockwell also found it important for the communication to be
frank.  For example, while Rockwell's arbitration handbook explained
that arbitration was a fair and less expensive way to settle a
dispute, it also explained that an employee seeking to "hit the
jackpot" would probably be disappointed because a windfall award is
less likely under arbitration than in a jury trial.  The handbook
explained that an arbitrator's award is more likely than a jury's to
be based on the merits of a case rather than on extraneous or
emotional considerations. 

A further lesson Rockwell learned involved the "Mutual Agreement To
Arbitrate Claims" that was made a condition of employment beginning
in 1993, according to Rockwell's Assistant General Counsel.  He said
there was a "little" negative reaction from some management employees
because they would not be able to take advantage of employee stock
options without signing the "Mutual Agreement To Arbitrate Claims."
But, Rockwell learned, the provision could be made acceptable to
employees if the company made sure that it was applied fairly and
ethically by (1) ensuring that the program did not take away from
employees any of their substantive rights; (2) including the
company's top executives in the program; and (3) providing employees
with consideration for signing the agreement, instead of merely
imposing the requirement as a condition of employment. 


CASE ILLUSTRATION:  TRW INC. 
========================================================== Appendix VI

TRW Inc., headquartered in Cleveland, OH, provides products and
services for the space, automotive, and defense markets worldwide. 
More than 90 percent of its 33,000 U.S.  employees are not covered
under collective bargaining agreements.  In January 1995, TRW adopted
a companywide ADR program for these workers.  The company made
arbitration available companywide.\54 Some TRW business units offer
mediation and peer review in addition to traditional dispute
resolution procedures.  TRW also operates a "hotline" to provide
employees an independent and confidential source of advice and
assistance. 


--------------------
\54 TRW provides for two forms of arbitration.  One model is the
single arbitrator; the other is a panel selected by the employee and
management and may also include an arbitrator.  Most TRW business
units have adopted the single arbitrator model. 


   HOW THE PROCESSES WORK
-------------------------------------------------------- Appendix VI:1

While arbitration is a companywide policy, TRW's approximately 60
business units have the prerogative to develop their own dispute
resolution processes, according to the company's Senior Corporate
Counsel for Labor and Employment.  Some business units, including
TRW's Systems Integration Group (SIG), include ADR techniques along
with arbitration in the dispute resolution continuum.  Under SIG's
procedures, employees can choose a hearing before a peer panel or
mediation before taking a matter to arbitration. 

In most instances, a SIG employee first submits his or her dispute
for management review, which includes internal mediation conducted by
human resources staff.  If the matter is not resolved or dropped, the
employee can elect to have a hearing before a five-member peer review
panel\55 that may be followed by external mediation, or bypass the
panel and request external mediation.  A peer review panel's decision
is binding on the company, although its remedies are limited to
actual damages; for example, it can order that a wrongfully
discharged employee be reinstated with back pay but cannot award
damages.  Before a SIG grievant who is dissatisfied with a peer
panel's decision can take the matter to arbitration, the dispute must
be submitted for external mediation.  Arbitration is the final step
at SIG as well as at all other TRW business units.  Arbitrators may
award remedies just as a court would do. 

With one exception, TRW pays all dispute resolution costs.  Its share
of arbitration costs depends on the outcome of the case.  An employee
who chooses to go to arbitration and does not prevail is liable for
half the cost of arbitration but not more than 2-days' base pay.\56
TRW expects its employees to use the company's dispute resolution
processes before litigating a matter.  If an employee bypasses TRW's
processes and files suit, the company will petition the court to
compel the use of company arbitration. 


--------------------
\55 The panel, called the Appeals Committee at SIG, is composed of
five members selected from a pool of employees nominated by other
employees.  The grievant selects three panelists and management
selects two. 

\56 The extent to which employees share in arbitration costs was
under review by the company at the time of our study, according to
the TRW's Senior Corporate Counsel for Labor and Employment. 


   EXPERIENCES IN DEVELOPING ADR
   PROCESSES
-------------------------------------------------------- Appendix VI:2

According to TRW's Senior Corporate Counsel for Labor and Employment,
company downsizing efforts in the early 1990s and a general
proliferation of employment-related lawsuits led to much employment
litigation.  She said that Human Resource and Legal Department staff
believed that ADR could help resolve cases more quickly and less
expensively.  Consequently, TRW required that its business units
adopt arbitration to supplement existing grievance procedures. 

Before putting its arbitration program into effect in January 1995,
TRW trained key staff and marketed the program throughout the
company, according to the Senior Corporate Counsel for Labor and
Employment.  She said that TRW contracted with a law firm for a 2-day
program to give human resource management staff (1) an overview of
mediation and arbitration and (2) instruction on how to conduct
discovery, prepare a brief, interview witnesses, and take
depositions.  The marketing initiative, which began in the summer of
1994, included group meetings in field units, video presentations,
and articles in company newspapers.  The company also sent literature
on the arbitration program to all employees.  She also said that
before the program went into effect, TRW obtained employee feedback
through focus groups and surveys.  SIG supplemented the parent
company's initiatives with its "Dispute Resolution Process Guide"--a
step-by-step description of, and questions and answers about, the
dispute resolution processes at SIG. 

Besides the costs of training staff and marketing the program (which
the company did not track), the start-up process required the near
full-time efforts of three staff from the human resources,
communication, and legal offices for about 6 months. 


   RESOLVING WORKPLACE DISPUTES
   AND LESSENING THE TIME AND
   COSTS ASSOCIATED WITH REDRESS
   AND LITIGATION
-------------------------------------------------------- Appendix VI:3

Although TRW has not formally evaluated its arbitration program, the
company's Senior Counsel for Labor and Employment said that the
program has succeeded in resolving disputes and avoiding the time and
expense associated with litigation.  Information she provided showed
that from January 1995 to September 1996, companywide, 40 grievants
requested arbitration.  Of these disputes, 27 had been submitted to
mediation; 16 (59 percent) of them were resolved.  Of the 13 cases
not mediated, two were arbitrated; the entire process took 4 to 5
months.  The other cases were pending.\57

According to the Senior Counsel, there has been a significant drop in
discrimination and other employment litigation, although some of this
decrease is due to the company's improved economic condition since
1994 and the end of downsizing.  She also noted that existence of the
arbitration program redirected some court cases to TRW's dispute
resolution forum.  She explained that five employees had bypassed
TRW's arbitration process and filed lawsuits.  After TRW informed the
plaintiffs' attorneys about the arbitration program, four of the five
plaintiffs withdrew their suits to first seek resolution through
arbitration.  The fifth plaintiff agreed to arbitration after TRW
filed a motion in federal district court to dismiss or stay a
lawsuit, pending arbitration.  In addition, several employees who
filed lawsuits before the arbitration program went into effect
subsequently requested binding arbitration as an alternative to the
judicial process.  TRW's Senior Counsel further noted the fact that
since only two cases had been arbitrated in the program's first 21
months, this showed the effectiveness of mediation and other dispute
resolution measures. 

TRW's Counsel's Office surveyed human resources staff in mid 1996
about their perception of the arbitration program.  Among the staff's
responses was that employees seemed willing to use ADR because a
third party is involved in the process.  They also said that more
concerted efforts are made at each step to reach an acceptable
solution.  Further, the staff said the process seems to have reduced
the number of "frivolous" lawsuits. 


--------------------
\57 Data on ADR use by all of TRW's individual business units was not
available.  However, between January 1995 and November 1996, 15 cases
were filed at SIG in which the grievant had the option of going to
peer review or directly to external mediation.  Of the 15 cases
filed, 13 were resolved (12 through mediation). 


   LESSONS LEARNED BY THE
   ORGANIZATION
-------------------------------------------------------- Appendix VI:4

TRW has learned several lessons, according to the company's Senior
Counsel for Labor and Employment:  (1) that, contrary to
expectations, the establishment of the arbitration program did not
result in an overwhelming number of complaints; (2) that most
grievants simply want to "have their day in court" to tell their
story to a third party; and (3) that an employee's request for
arbitration often opens the door to settlement, whether through
mediation or other settlement discussion.  Finally, responses by TRW
human resources staff to a company survey indicated that having the
program keeps management "on their toes" as far as documenting and
addressing issues as they occur. 


CASE ILLUSTRATION:  U.  S. 
DEPARTMENT OF AGRICULTURE
========================================================= Appendix VII

The U.  S.  Department of Agriculture, headquartered in Washington,
D.C., manages agriculture, food safety, nutrition, natural resources,
community development, and scientific research programs.  Agriculture
and its 16 agencies employ about 108,000 people.  In 1993,
Agriculture provided mediation training to its full-time equal
employment opportunity (EEO) counselors.\58 In January 1994, it
established Dispute Resolution Boards to handle the rapidly growing
volume of EEO complaints.\59 In 1996, Agriculture announced a policy
requiring its agencies to develop conflict resolution programs
outside the EEO complaint process that used alternative dispute
resolution (ADR) techniques like mediation, to intervene early in
disputes to prevent them from becoming formal EEO complaints.  This
case illustration discusses the operation of Dispute Resolution
Boards. 


--------------------
\58 The 40-hour training was provided by the Justice Center of
Atlanta. 

\59 As a result of the recommendation of an internal Agriculture
evaluation (see p.  60), boards were discontinued in April 1997. 


   HOW THE PROCESS WORKS
------------------------------------------------------- Appendix VII:1

The Dispute Resolution Boards operated in an adjudicatory-like
fashion as an initial step in the formal EEO complaint process.  The
three-member boards required 1 day for preparation and 1 day for the
hearing or conference, which had two phases:  fact-finding\60

and resolution or settlement.  During fact-finding, the board heard
sworn testimony from both the employee and the supervisor and
obtained other evidence.  Following deliberations, the board met
jointly and separately with the parties to facilitate resolution and
offered them an assessment of (1) the strengths and weaknesses of
their respective positions and (2) which party would likely prevail
if the case proceeded further in the process.  If resolution
resulted, the parties signed a written settlement.  If there was no
resolution, information developed during fact-finding became part of
the investigation record. 

Because the board lacked resolution authority, an agency official
with authority to enter into settlement agreements--called a
resolving official--participated in the proceedings.  According to
Agriculture's Washington Regional Service Center Director, the
resolving official was authorized under verbal Agriculture policy to
commit the department to monetary settlements up to $2,500, in
addition to back pay and attorneys' fees, without higher-level
approval. 


--------------------
\60 Regulations governing the EEO complaint process require the
parties to cooperate during fact-finding. 


   EXPERIENCES IN DEVELOPING THE
   ADR PROCESS
------------------------------------------------------- Appendix VII:2

The significant increase in EEO complaints, the inability to process
them in a timely manner, and a burgeoning complaint backlog prompted
Agriculture's then Assistant Secretary for Administration to adopt
the board concept to save time and money by reducing the number of
cases going through the entire complaint process.\61

In April 1993, a task force of EEO and employee relations staff began
planning how the boards would operate.  Agriculture conducted a pilot
from September 1993 to December 1993 with board members selected from
EEO and human resource staff for "their good common sense and basic
understanding of the complaint process and dispute resolution,"
according to Agriculture's evaluation of the pilot.  Diversity was
also a selection factor.  According to agency officials, based on the
pilot, Agriculture decided that a board would have three members
rather than one because a three-person board would (1) more fully
develop the record and identify issues requiring further
investigation, (2) be viewed as more credible by the parties, and (3)
allow for diversity among the members.  In January 1994, a board was
established in the Washington Regional Service Center.  The officials
also said that because of resource constraints, boards operated in
only four of the six regional service centers before being
discontinued in April 1997 and had been used in only about 12 to 15
percent of the EEO cases. 


--------------------
\61 The history of Agriculture's Dispute Resolution Boards was
discussed in USDA Dispute Resolution Board Pilot Project Evaluation,
May 1994. 


   RESOLVING WORKPLACE DISPUTES
   AND LESSENING THE TIME AND
   COSTS ASSOCIATED WITH REDRESS
   AND LITIGATION
------------------------------------------------------- Appendix VII:3

Agriculture evaluated the results of the 3-month pilot, comparing 48
cases going through the board process to 41 cases handled by the
traditional EEO complaint process.  Evaluation results showed that of
the 48 pilot cases, 16 were withdrawn, dismissed, or settled prior to
the day of the hearing.  Of the 32 remaining cases, 23 settled on the
day of the hearing.  Another 8 settled after the day of the hearing. 
The one case not resolved continued to be handled by the traditional
process.  Board cases were resolved in less time than the traditional
process, requiring an average of 152 days from filing of the
complaint until closure (including 46 days from the time a case was
assigned to a board to closure); the comparison group averaged 238
days.\62

The evaluation team reported that while it could not compare costs of
the board and traditional processes with any precision because exact
records of time and cost were not maintained, "it seems fairly
certain" that EEO complaint processing costs using boards were less
than the costs under the traditional process.  However, when
settlement costs were considered, it was unclear whether boards were
less costly because board-facilitated settlements (averaging $19,737)
were more costly than settlements and decisions in the comparison
group (averaging $4,665).\63

Generally, employees and resolving officials had more favorable
opinions about boards than did the supervisors, according to the
evaluation.  Of respondents to the evaluation team's survey, 42
percent of the supervisors were dissatisfied with the board process
compared with 17 percent of the employees and 25 percent of the
resolving officials.  Forty-two percent of the supervisors said the
process was unfair, compared with 17 percent of the employees and 15
percent of the resolving officials.  In addition, 53 percent of the
supervisors were dissatisfied with the outcomes compared with 25
percent of the employees and 30 percent of the resolving officials. 


--------------------
\62 Ibid. 

\63 Includes cash settlements, compensatory damages, back pay and
attorneys' fees, and the monetary value of noncash settlements such
as training, travel, and tuition. 


   LESSONS LEARNED BY THE
   ORGANIZATION
------------------------------------------------------- Appendix VII:4

Based on the evaluation, Agriculture learned that while boards had
been helpful in dealing with the complaint inventory, they were labor
intensive and expensive and did not deal with the underlying issues
in disputes.  This is the reason why Agriculture has begun training
counselors in mediation and developed a conflict resolution policy
encouraging its agencies to intervene early in disputes, according to
the former Deputy Director of the Office of Civil Rights and
Enforcement. 

Another lesson learned relates to the politics of settlement. 
Officials said that in the beginning, there was a push to settle and
close cases.  They said that the settlement policy discouraged
supervisors and affected their attitude toward the board process
because they perceived that their authority was being undermined.  At
the same time, the settlement policy may have encouraged employees to
file complaints.  Agriculture has since stated that in making
settlements, officials should ensure that appropriate weight is given
to the merits of a case.  Additionally, some Agriculture officials
said that they believe the prospect of receiving a cash settlement
may have motivated some employees to file complaints, and the
expectation of receiving cash may have impeded resolution. 

The above lessons were reinforced by the Civil Rights Action Team
that studied how Agriculture treated both customers and employees. 
In its February 28, 1997, report,\64 the team recommended sweeping
changes to how Agriculture resolves workplace disputes, including
using more interest-based ADR techniques outside the EEO process to
resolve complaints and their underlying issues at the lowest possible
level.  To deal with the EEO case backlog, the team recommended using
mediation and voluntary binding arbitration.  The team also
recommended discontinuing boards.  The Executive Assistant to the
Deputy Director of Agriculture's Office of Civil Rights said that
criticism of the boards was not about their design but about how they
implemented the agency's settlement policy. 

In addition to recommending that Agriculture abandon a "settle at all
costs" policy, the team said that the performance of EEO counselors
and other Agriculture personnel with dispute resolution
responsibilities should not be assessed exclusively or primarily on
their settlement or resolution rates.  Further, the team recommended
that all Agriculture employees receive civil rights training and that
managers receive training to enhance their "people skills."

The Secretary of Agriculture has accepted the team's findings.  An
implementation team was established to draft new settlement and
conflict management policies as well as to set up a conflict
management program.  Agriculture said that the team is expected to
complete its work by the end of the summer 1997. 


--------------------
\64 Civil Rights at the United States Department of Agriculture:  A
Report by the Civil Rights Action Team. 


CASE ILLUSTRATION:  U.S.  AIR
FORCE
======================================================== Appendix VIII

The U.S.  Air Force, with facilities worldwide, employed more than
571,000 personnel in fiscal year 1996, including about 183,000
civilians.  In the Air Force, the alternative dispute resolution
(ADR) method that is emphasized is mediation, which has been used in
personnel issues since 1990, particularly in civilian employee equal
employment opportunity (EEO) cases.  The Air Force has trained its
EEO counselors in mediation to foster its use. 


   HOW THE PROCESS WORKS
------------------------------------------------------ Appendix VIII:1

Civilian employees who believe they have been discriminated against
can contact an EEO counselor who, if unable to resolve a particular
matter, may suggest mediation.\65 Both parties--employee and
supervisor--must agree to mediation, which can occur at any point in
the dispute.  The Air Force's goal is to provide mediation within 4
weeks of a request for its use, according to the deputy dispute
resolution specialist. 

A mediator is selected depending on the issues involved (the Air
Force prefers to match a mediator to a case with issues in which he
or she specializes) and, to a limited extent, on the preferences of
the parties.  The mediator could be the counselor whom the employee
initially contacted; another counselor not involved in the case; or
an external mediator from another Air Force installation, the
Department of Defense's shared neutrals program, another federal
agency, or a contract mediator.  In addition to the disputants, the
mediator must arrange for an Air Force official, who is authorized to
agree to settlement terms, to directly participate in, or at least be
kept informed of, the mediation proceedings in order to approve any
proposed settlement terms.  If a matter is resolved, the parties sign
a settlement agreement, which is subject to a higher-level review
before becoming final. 


--------------------
\65 Kirtland Air Force Base is an exception.  The base's Mediation
Center, established in December 1993, is separate from all formal
processes and handles disputes ranging from grievances under
collective bargaining agreements to EEO complaints. 


   EXPERIENCES IN DEVELOPING THE
   ADR PROCESS
------------------------------------------------------ Appendix VIII:2

Air Force officials said workplace ADR efforts began in 1990, when
the Air Force started providing mediation training to grievance
examiners and complaint investigators.  A more structured ADR program
was established in January 1993 when the Secretary of the Air Force,
in a memorandum, called for using ADR in appropriate cases,
designated the Deputy General Counsel as the Air Force Dispute
Resolution Specialist and, among other things, required (1)
development of an ADR implementation plan, and (2) an annual progress
report. 

In planning the program, General Counsel staff canvassed the public
and private sector legal communities about best practices and program
successes, according to a memorandum prepared by the Air Force's
General Counsel describing the status of the Air Force's ADR
initiatives.  An ADR Working Group determined that the ADR program
should emphasize stakeholder education and awareness by briefing
those most affected by disputes, including EEO and senior military
and civilian personnel. 

In implementing the program, the Air Force continued training EEO
counselors in mediation; at the time of our study, over 1,000 Air
Force personnel (most of whom had dealt with employment disputes) had
been trained, according to the General Counsel's memorandum.  The
training course is a 24-hour program.\66 To help less experienced
mediators further develop their skills and to promote ADR use, the
Air Force established the Mediator Mentoring Program, under which
trained but inexperienced mediators apprentice with highly skilled
and experienced mediators. 

A major marketing initiative began in 1996 with plans to brief key
staff at all major commands.  Efforts have included on-site
multimedia briefings and briefings via satellite to more than 20 Air
Force installations.  Further, the Office of the General Counsel has
publicized ADR efforts through its newsletter ADR News!. 

The Air Force has been developing ADR guidance and information
resources.  At the time of our study, the handbook Air Force
Mediation Handbook:  Mediating Civilian Personnel Workplace Disputes
was in final drafting stages.  In developing the handbook, the Air
Force used input from EEO counselors and personnel specialists.  The
Air Force is also developing an Internet site called The ADR Source,
which will offer information about ADR programs in the Air Force, at
other federal agencies, and in the private sector.  These and other
efforts are being underwritten by a budget that in fiscal year 1997
is $400,000. 


--------------------
\66 Training providers have included the Justice Center of Atlanta
and the Federal Mediation and Conciliation Service as well as other
contractors. 


   RESOLVING WORKPLACE DISPUTES
   AND LESSENING THE TIME AND
   COSTS ASSOCIATED WITH REDRESS
   AND LITIGATION
------------------------------------------------------ Appendix VIII:3

An evaluation of the Air Force's program, as it relates to the
resolution of EEO complaints, is expected to be completed by late
1997, according to Air Force officials.\67 Preliminary data show that
the Air Force ADR program is successful in resolving workplace
disputes and in lessening the time and costs associated with redress,
according to the memorandum from the Air Force General Counsel.  The
extent to which costs are saved is a subject of the ongoing
evaluation.  However, the General Counsel said that resolving EEO
disputes at the earliest possible time and at the lowest
organizational levels helps keep both tangible and intangible costs
(e.g., diversion of resources from mission accomplishment and morale
problems) low. 

In fiscal year 1996, the Air Force reported using ADR in 1,807 EEO
cases, resolving 1,339 (74 percent) of them.  It also reported that
the amount of time it takes to resolve cases has declined.  The
average number of days to settle formal EEO complaints decreased from
329 to 136 between fiscal years 1992 and 1995.  The General Counsel
said that this is explained, in part, by the use of ADR.  During this
period, the average time to close formal complaints (including
through a settlement) declined from 401 to 201 days.  The Air Force
also reported significant time savings in resolving informal EEO
complaints. 


--------------------
\67 An evaluation of the Kirtland Air Force Base Mediation Center was
in final review at the time of our study.  Preliminary data show the
center resolved 51 of 72 (71 percent) cases mediated between December
1993 and October 1996.  In addition, 90 percent of users responding
to a survey between December 1993 and July 1995 reported they were
satisfied with the services. 


   LESSONS LEARNED BY THE
   ORGANIZATION
------------------------------------------------------ Appendix VIII:4

In her memorandum, the Air Force General Counsel said that the ADR
program has achieved important results in a relatively short period
of time because of (1) strong support from senior management, (2) the
fact that at least one employee has worked full-time on implementing
ADR initiatives, (3) training and awareness briefings, and (4)
financial support for ADR initiatives. 

The Air Force learned additional lessons from a survey of Air Force
personnel who reported using ADR techniques to resolve personnel
disputes.\68 Among the lessons learned was that early use of ADR
enhances the potential for resolving the dispute in a way that
satisfies the parties' underlying interests, whereas when time drags
on without a resolution, people tend to "dig in their heels" and
fight for their position.  Another lesson was that mediation helps
overcome disputes arising from poor communication, which is at the
root of many disputes.  Mediators also reported learning the
importance of preparation, including explaining the mediation process
to the parties; becoming generally familiar with the nature of the
dispute; encouraging the disputants to review the facts of the
dispute before mediation begins; and coordinating with appropriate
officials (e.g., one authorized to agree to settlement terms).  They
also learned that not every case is appropriate for mediation, such
as cases involving "chronic complainers" and those in which
complainants have an inflated sense of what they might be entitled to
receive.  However, Air Force officials emphasized that even in such
cases, if mediation might be helpful, it should be tried.  The
officials told us that other cases that are not appropriate for
mediation are those involving fraud or those that are the subject of
an Inspector General investigation.  Further, the mediators reported
that written agreements build trust, cooperation, and understanding. 

Finally, Air Force officials noted that providing mediation training
to the Air Force's EEO counselors was worthwhile.  Although not all
counselors became skilled in or comfortable with the mediation
process, the training helped many of them do a better job of
resolving EEO matters, whether they used mediation or more
traditional counseling methods. 


--------------------
\68 These lessons are documented in Air Force ADR Program (FY 94-96);
Lessons Learned by Using ADR to Resolve Civilian Workplace Disputes,
in draft at the time of our study. 


CASE ILLUSTRATION:  U.  S.  POSTAL
SERVICE
========================================================== Appendix IX

The U.  S.  Postal Service, an independent governmental establishment
headquartered in Washington, D.C., is the nation's largest civilian
employer with more than 800,000 workers.  Although most employees are
covered under collective bargaining agreements under which they can
file equal employment opportunity (EEO)-related grievances, they can
simultaneously file complaints under the EEO complaint system for
federal employees.  Mediation was introduced in 1986 in the EEO
complaint program in Santa Ana, now within the Postal Services'
Southern California EEO Processing Center.  In 1994, the Postal
Service piloted a headquarters-sponsored EEO complaint mediation
program\69 in its North Florida District.  At the time of our study,
there were 20 pilot mediation sites. 


--------------------
\69 The Postal Service's program is known as REDRESS (Resolve
Employment Disputes, Reach Equitable Solutions Swiftly). 


   HOW THE PROCESS WORKS
-------------------------------------------------------- Appendix IX:1

Postal Service workers who believe that they have been discriminated
against can contact the EEO office where they receive information
about mediation and a form to make a request.  Mediation is offered
in lieu of the customary counseling in the informal phase of an EEO
complaint.  If a senior complaint processing specialist approves
mediation, it is to be scheduled within approximately 2 weeks of the
request.  The Postal Service representative at mediation is to have
settlement authority or have access to an official with that
authority.  If the parties achieve resolution, they are to sign a
settlement agreement. 

The source of the mediators varies by location.  The Southern
California EEO Processing Center uses EEO counselors trained in
mediation.  The North Florida District uses contract mediators. 
Other locations, if they do not use internal mediators, obtain
mediators from a shared neutrals program or contractor. 


   EXPERIENCES IN DEVELOPING THE
   ADR PROCESS
-------------------------------------------------------- Appendix IX:2

A variety of factors led to the Postal Service's growing use of
mediation, according to Postal Service officials.  The grass roots
program in Santa Ana was suggested by an EEO specialist experienced
in mediation.  In 1992, General Counsel and human resources staff at
Postal Service headquarters began developing an agencywide
alternative dispute resolution (ADR) policy in voluntary compliance
with the Administrative Dispute Resolution Act of 1990 and to take
advantage of federal employee EEO complaint system regulations
encouraging ADR use.  The first pilot under the agencywide initiative
was in the North Florida District, its selection spurred by a need to
comply with a consent decree resulting from a lawsuit.\70 The Postal
Service expanded EEO complaint mediation to other sites because of
the high number of complaints and the sense that many complaints are
rooted in personality conflicts that should be resolved in some other
forum, according to the Manager, EEO Compliance and Appeals. 

In developing the agencywide ADR policy, the General Counsel and
human resources staff at headquarters researched ADR practices at
large firms and consulted with dispute resolution experts, according
to Postal Service officials.  The officials said that the Postal
Service contracted with a marketing firm to conduct focus groups to
obtain supervisor and rank-and-file employee perceptions of the EEO
complaint process and what could be done to improve it.  On the basis
of their research, focus group results, and other input, the Postal
Service decided to use outside mediators in North Florida provided
under contract by the Justice Center of Atlanta, to lend more
credibility to the process.  Before implementing this first pilot,
the Postal Service obtained feedback from supervisors and union
representatives. 

Officials told us that support for expanding the ADR program came
from the Postal Service's quality improvement program known as
"Customer Perfect," which provided top-level policy endorsement,
funding, and publicity.  Under this program, they said that the
Postal Service has provided conflict management and ADR training to
about 1,100 managers and supervisors.  It also held two week-long
conferences to help managers from the cities with pilot programs
design an ADR program and develop an implementation plan.  Further,
it trained staff as mediators in each location, developed a video and
brochure about the program, and provided on-site program development
assistance.  Headquarters program staff have conducted numerous
briefings at locations across the nation.  The Postal Service has
also worked with the unions to get their support. 

Finally, the Postal Service's program implementation plans include a
comprehensive evaluation of user satisfaction and cost effectiveness
of mediation at the pilot locations.  The evaluation is being
conducted by an assistant professor at Indiana University's School of
Public and Environmental Affairs as a research project at no cost;
the Postal Service is paying for administrative support. 


--------------------
\70 Under the terms of the consent decree, which sunset in October
1996, the Postal Service had offered binding arbitration. 


   RESOLVING WORKPLACE DISPUTES
   AND LESSENING THE TIME AND
   COSTS ASSOCIATED WITH REDRESS
   AND LITIGATION
-------------------------------------------------------- Appendix IX:3

As of June 1997, the Postal Service's evaluation was still under way. 
However, data reported from North Florida and Southern California
show that mediation resolved a higher proportion of complaints in the
informal stage than did the traditional process.  Resolution rates
were 74 percent (139 of 188 cases between October 1994 and December
1996) in North Florida and 94 percent (1,605 of 1,714 cases between
October 1988 and September 1996) in Southern California.  In the
Southern California EEO Processing Center, for example, only 57
percent of cases that went through traditional counseling were
resolved.  In the North Florida program's first year, the
"flow-through" rate (the rate of informal complaints becoming formal
complaints) dropped from 43 to 22 percent, according to the ADR
Counsel. 

Postal Service surveys of employees and supervisors in North Florida
who had used mediation and of those in a comparison group (in other
locations) who had used the traditional process showed user
satisfaction with mediation far exceeded user satisfaction with the
traditional process.  For example, 90 percent of mediation users said
the process was fair compared with 41 percent of the comparison
group.  Seventy-two percent of the mediation users were satisfied
with the outcomes compared with 40 percent of the comparison group. 

Mediation was not very time consuming.  In the Southern California
EEO Processing Center, the typical mediation required about 90
minutes; cases in North Florida averaged 197 minutes. 


   LESSONS LEARNED BY THE
   ORGANIZATION
-------------------------------------------------------- Appendix IX:4

Foremost among the lessons the Postal Service learned is the
importance of top-level support in establishing and sustaining a
program, according to Postal Service officials.  For example, the
Southern California program, established with the support of the
human resources director, saw the use of mediation in informal cases
decline from 58 percent in fiscal years 1989 through 1992 to about 10
percent following management changes resulting from restructuring in
1992. 

Postal officials said that keys to a program's growth are
demonstrable results and early successes.  The ongoing evaluation
should be particularly helpful in this regard.  Because starting a
mediation program requires a Postal Service district to pay start-up
costs, officials said they learned that some managers need convincing
data to decide whether mediation is a worthwhile investment. 

Officials said they also learned that the user-friendly dispute
resolution program increased the number of informal complaints. 
However, based on North Florida's experience, a lower proportion of
informal complaints turned into formal complaints, and the overall
number of formal complaints declined.  Postal Service officials
attribute this reduction to employees' (especially supervisors)
having developed conflict management competencies after having gone
through mediation, some on several occasions.  Officials also said
that it is important to intervene promptly in a dispute while the
issue is fresh in the disputants' minds and their positions have not
hardened. 


CASE ILLUSTRATION:  U.  S. 
DEPARTMENT OF STATE
=========================================================== Appendix X

The Department of State, headquartered in Washington, D.C., advises
the President in formulating and executing foreign policy.  State's
approximately 13,000 U.S.-based employees are classified either as
foreign service (58 percent) or civil service (42 percent).  In 1989,
State implemented a legislative mandate that created the Ombudsman
for Civil Service Employees to address concerns about the treatment
of its civil service employees in relation to its foreign service
employees.  In May 1995, State launched a pilot mediation program to
deal with equal employment opportunity (EEO) complaints.  State also
tested dispute resolution boards in EEO complaints in 1995 and 1996. 
Further, in June 1997, State developed procedures for mediating
grievances. 


   HOW THE PROCESSES WORK
--------------------------------------------------------- Appendix X:1

A State employee can choose from several channels when seeking
assistance to resolve a workplace dispute, including the Ombudsman
for Civil Service Employees, the Office of Equal Employment
Opportunity and Civil Rights (S/EEOCR), and the grievance office. 

The Ombudsman for Civil Service Employees reports directly to the
Secretary of State and is to provide (1) advice on how programs and
policies affect the interests of civil service employees and (2)
counseling to employees on career and work-related matters.  The
ombudsman's office is to assist individual employees by providing
confidential counseling on workplace issues, such as answers to their
questions about employee rights.  Although rarely a party to dispute
resolution, the ombudsman is to outline approaches for employees
dealing with conflict and resolving disputes.

S/EEOCR has used mediation and dispute resolution boards to deal with
EEO complaints.  It uses mediation in the informal phase of an EEO
complaint.  Employees are provided information about mediation by
counselors and when they visit the S/EEOCR office.  Participating in
mediation is voluntary for the employee but mandatory for management. 
In addition to the employee and the supervisor, a management
representative with the authority to approve a settlement is party to
the mediation.  During the pilot, State has used internal mediators
and mediators from a Washington, D.C.-based shared neutrals program. 
If the matter is resolved, the parties sign an agreement that is
reviewed and monitored by S/EEOCR. 

In 1995 and 1996, S/EEOCR used dispute resolution boards\71 on a
trial basis to resolve formal complaints.  The three-member board
operated in an adjudicatory-like fashion.  While the board had no
resolution authority, it offered the parties an assessment of (1) the
strengths and weaknesses of their respective positions and (2) which
party would likely prevail if the case proceeded further in the
process.  If a resolution resulted, the parties signed a written
settlement.  If there was no resolution, information that was
developed during the fact-finding phase became part of the
investigation record. 

Under procedures developed in June 1997, an employee visiting the
grievance office may be offered mediation.  If mediation is opted
for, grievance office staff will contact State's dispute resolution
specialist to obtain the services of a mediator. 


--------------------
\71 Board members were from the Department of Agriculture.  See app. 
VII for further discussion on the operation of dispute resolution
boards at the Department of Agriculture. 


   EXPERIENCES IN DEVELOPING ADR
   PROCESSES
--------------------------------------------------------- Appendix X:2

For advice on implementing the ombudsman mandate, the Office of the
Ombudsman said it contacted the Ombudsman Association and federal
agencies with an ombudsman.  The ombudsman (a collateral
responsibility for a senior executive) has a full-time assistant (a
mid-level civil service employee) who has received mediation
training.  State publicized the ombudsman's office by issuing an
announcement when the first ombudsman was appointed.  At the outset,
the ombudsman's office said it held approximately 30 meetings with
U.S.-based employees to learn their concerns.  The ombudsman's office
has continued to get a sense of employee concerns through its
participation in task forces and working groups, according to the
ombudsman's assistant.  Publicity has also been provided through the
Department of State magazine and through departmental notices and
bulletin board postings. 

In late 1994, State appointed its first dispute resolution
specialist; and the current dispute resolution specialist said that
he works closely with the Office of the Ombudsman and S/EEOCR, among
others.  In early 1995, State established the Alternative Dispute
Resolution (ADR) Working Group, with representatives from several
department bureaus.  The working group invites employee
representatives to its monthly meetings.  Also, in March 1995, a
group of State employees received mediation training at the Foreign
Service Institute; as of July 1997, the dispute resolution specialist
said that there was a roster of 15 foreign and civil service
employees from which State could draw for mediation services. 
Additionally, State said that the Foreign Service Institute enhanced
the mediation module in its negotiations art and skills course. 

According to the Associate Director, S/EEOCR, State initiated the
pilot mediation program in May 1995 to (1) deal with the EEO case
backlog, (2) find a more cost-effective way to resolve EEO-related
disputes in the early stages, and (3) provide an alternative forum
for employees who do not want to file EEO complaints.  He said that
the mediation program has been publicized in State's magazine and in
a department notice. 

The Associate Director, S/EEOCR, said that State's use of dispute
resolution boards occurred when it accepted an offer from the
Department of Agriculture for six trial board hearings without
charge, with the understanding that State would pay Agriculture
between $3,000 to $4,000 plus court reporter fees for each case
beyond the trial period.  He said that State opted not to use the
Agriculture-operated boards beyond the trial period. 

The dispute resolution specialist told us that State's more recent
initiative to mediate grievances came about as a result of the
efforts of the ADR Working Group and himself. 


   RESOLVING WORKPLACE DISPUTES
   AND LESSENING THE TIME AND
   COSTS ASSOCIATED WITH REDRESS
   AND LITIGATION
--------------------------------------------------------- Appendix X:3

The ombudsman does not keep records of counseling outcomes, believing
that this would undermine confidentiality, according to the
ombudsman's assistant.  However, she estimates that an average of
three to five civil service employees visit the office weekly (in
addition to phone inquiries) and, based on feedback she has received
from them, believes that their needs have been met.  Although the
ombudsman is generally not involved in resolving workplace disputes,
State believes that his availability to address employee concerns
prior to their filing a formal action has helped reduce the EEO
caseload. 

According to the Associate Director, S/EEOCR, mediation has been used
in only about 3 percent of State's EEO cases.  Between May 1995 and
December 1996, mediation was used in nine cases, achieving closure in
three of them (one case was still in process at the time).  He
attributed this low utilization to complainants' aversion to the
process as well as State's failure to give ADR higher priority. 

Of the five cases heard by boards, State reported that two were
resolved.  Although State discontinued using the Agriculture-operated
boards, it may consider adopting boards using State staff as board
members, according to the Associate Director, S/EEOCR, because a
board (1) facilitates communication between the parties, (2) costs
about the same as an EEO investigation, and (3) produces an immediate
investigation report. 


   LESSONS LEARNED BY THE
   ORGANIZATION
--------------------------------------------------------- Appendix X:4

State has learned numerous lessons in implementing its ADR
initiatives.  The ombudsman's assistant said that the fact that the
ombudsman's office initially set modest goals for achieving
organizational change avoided inflated expectations of what the
ombudsman's office could do to deal with workplace conflict and
discontent.  She said that the downside to that strategy, however,
was that the ombudsman's accomplishments may not have been recognized
in the first few years.  She also said that outreach efforts and the
program's confidentiality feature, however, helped overcome initial
employee skepticism. 

Another lesson, the Associate Director, S/EEOCR noted, was that a
program can stagnate when there is a lapse in program leadership,
which occurred when the dispute resolution specialist position
remained unfilled between January and August 1996. 

More lessons have come out of the mediation pilot.  The Associate
Director, S/EEOCR said he came to understand complainants' aversion
to mediation.  He said they do not want to confront their supervisors
but want an investigation and hearing to vindicate their position. 
Also, complainants avoid mediation because they want an advocate and
mistakenly believe S/EEOCR will be their advocate.  He also said
outside mediators carry more credibility than internal mediators and
that the shared neutrals program is not only a source of mediators
but a way of matching a mediator's experiences and demographics to
that of the parties and the issues.  Further, he said he learned
mediation training alone does not equip a person to mediate EEO
cases.  The position also requires a person with the right
temperament and an understanding of EEO issues. 

A February 1996 State briefing memorandum discussed other lessons
about mediation.  One lesson was a recognition of the need to remove
management from direct involvement in the mediation process and
instead appoint management representatives who have been briefed on
ADR.  Another lesson was to exclude as possibilities for mediation
any cases that set precedent or involve large monetary settlements,
significant investigation, a violation of criminal law, or issues
dealing with security. 


CASE ILLUSTRATION:  WALTER REED
ARMY MEDICAL CENTER
========================================================== Appendix XI

The Walter Reed Army Medical Center, in Washington, D.C., providing
medical services to active and retired military personnel and their
dependents, has approximately 3,900 civilian employees, about a third
of whom are covered under collective bargaining agreements.  In
October 1994, Walter Reed established the Alternative Dispute
Resolution (ADR) Center to achieve quick resolutions of workplace
disputes and to avoid more costly redress channels mostly by using
mediation.  Its services are available to all employees, except those
employees who are covered under a collective bargaining agreement
must obtain written approval from their union. 


   HOW THE PROCESS WORKS
-------------------------------------------------------- Appendix XI:1

A Walter Reed employee visits (or is referred to) the ADR Center--a
separate unit within Walter Reed's personnel office--where the
dispute resolution officer is to determine whether a matter is
appropriate for the center to handle.  Besides the employee and
supervisor (who must participate), the parties to mediation usually
include a senior manager (called a resolving official) with the
authority to commit Walter Reed to the terms of a settlement
agreement.  If a resolution is reached, the parties sign a settlement
agreement. 


   EXPERIENCES IN DEVELOPING THE
   ADR PROCESS
-------------------------------------------------------- Appendix XI:2

According to Walter Reed officials, the ADR Center was established at
a time when EEO cases were at an all time high, workplace tensions
were high, the workforce was discontented, and Walter Reed's image
was suffering.  The base commander, civilian personnel officer, EEO
officer, and the Diversity Council developed the ADR Center in
response to these conditions. 

In the 6-month period before opening the ADR Center, the civilian
personnel officer said she researched ADR principles and practices,
studied ADR programs at other organizations, consulted with an
outside expert, and examined the culture of conflict within Walter
Reed.  She said that as a result of the study, Walter Reed
established the ADR Center as a separate branch of the civilian
personnel office to intervene early in a given dispute before the
employee sought assistance from the EEO office, believing that many
disputes resulted from poor communications or other interpersonal
problems.  Another reason for locating the ADR Center within the
civilian personnel office was because of the importance of expertise
in personnel rules and regulations when dealing with workplace
disputes. 

Walter Reed originally assigned three persons to the ADR Center and
trained them in mediation.\72 To publicize the program, the base
commander issued a memorandum to all employees; a later memorandum
from the U.S.  Army Medical Command also endorsed the use of ADR.  To
further acquaint employees with the program, the center conducted
over 1,000 1-hour briefings.  In addition, because Walter Reed
believes that most disputes can be prevented or quickly resolved if
employees have the right kind of skills, the ADR Center arranged for
about 160 staff to receive one-half to 1 day of training in conflict
resolution.  The training materials included workbooks and
videotapes. 


--------------------
\72 The ADR Center was authorized two staff at the time of our study. 


   RESOLVING WORKPLACE DISPUTES
   AND LESSENING THE TIME AND
   COSTS ASSOCIATED WITH REDRESS
   AND LITIGATION
-------------------------------------------------------- Appendix XI:3

Although there has been no formal evaluation of Walter Reed's ADR
program, the ADR Center officials presented indicators that they said
they believed show the program to be successful.  Of the 160 cases
that went through the Center's ADR processes in its first 2 years of
operation, 108 (67.5 percent) were resolved.  The typical mediation
required no more than two sessions and a total of from 4 to 6 hours. 
Because the center operated outside the EEO complaint process, cases
dealt with issues other than those the Center classified as EEO.  The
cases that were most frequently dealt with were ones that the Center
called "communication" issues (36 percent), disciplinary actions (23
percent), and performance appraisals (16 percent).  Only 15 percent
of the cases dealt with EEO issues.  The ADR Center resolved
two-thirds of the EEO cases.  It was most successful in resolving
communication cases (83 percent) and least successful in cases
involving disciplinary actions (43 percent).  Settlement agreements
often involved handshakes, apologies, training, or other reasonable
relief the employees requested. 

Walter Reed's Office of Internal Review and Audit Compliance reported
that the number of EEO complaints, grievances and appeals, and
disciplinary and adverse actions dropped substantially in the ADR
Center's first 2 years of operation (fiscal years 1995 and 1996),
compared with the 2 years before the center opened (fiscal years 1993
and 1994).  EEO complaints decreased 47 percent from 76 to 40,
grievances and appeals dropped almost 80 percent from 147 to 30, and
disciplinary and adverse actions decreased 55 percent from 369 to
165.  In addition, informal EEO complaints dropped from 204 in fiscal
years 1993 and 1994 to 25 in fiscal years 1995 and 1996.  There was,
however, some disagreement among Walter Reed officials about the
extent to which Center efforts contributed to these reductions. 

The decline in formal redress cases reduced the workload of the
civilian personnel and EEO offices, which was able to meet its
responsibilities even though it was being downsized, according to the
Office of Internal Review and Audit Compliance.  Precise cost savings
created by avoiding formal redress were not available, but the
dispute resolution officer said that for each EEO investigation
avoided, Walter Reed saves between $2,000 and $3,000 that the Defense
Department charges for an investigation, plus court reporter costs. 
Walter Reed's Chief of Internal Review and Audit Compliance reported
that ADR has resulted in better and cheaper ways of resolving
disputes, but he did not quantify savings.  He also reported that the
ADR Center's personnel costs for fiscal years 1995 and 1996 were
about $344,000.  According to Walter Reed's dispute resolution
officer, the investment in training (mostly provided by contractors)
totaled about $36,000. 

Employee satisfaction with the ADR services was high, according to
ADR Center surveys of first-year users.  Of the respondents, 90
percent rated the overall performance of the ADR program and the
performance of mediators from good to excellent, 73 percent reported
that they would use the program again, and 72 percent reported that
they would recommend the program to others.  Seventy percent of the
respondents reported that their working relationships and environment
had improved. 


   LESSONS LEARNED BY THE
   ORGANIZATION
-------------------------------------------------------- Appendix XI:4

Walter Reed officials said that one important lesson they learned is
that it is necessary to understand the culture of conflict within an
organization in order to establish an appropriate ADR program. 
Another important lesson is that the support of top management is
essential to a program's success.  The dispute resolution officer
said Walter Reed's ADR program was established in large measure with
the strong support of the former base commander.  Despite this
support, he found that Center staff have had to constantly nurture
the program through continuous marketing and education efforts. 

The dispute resolution officer also said he learned that merely
giving an employee an opportunity to tell his or her side of the
story--whether or not the employee prevails--can give the employee
some measure of satisfaction.  He also said that although employee
satisfaction with the ADR services was high, he had learned that some
managers viewed settlements with suspicion, believing that
settlements undermined their authority and seemed to "give away the
store." He said that, as a result, resolving officials have become
more judicious in making settlements. 

One further lesson Walter Reed officials said they learned is that by
establishing the ADR Center, they opened a less formal channel for
employees to seek assistance before an issue erupts.  They said
Center staff have been able to get to the underlying issues and
direct employees to the most appropriate resource, such as cases in
which the underlying source of the employee's problem is outside the
workplace. 


CASE ILLUSTRATION:  SEATTLE
INTERAGENCY ADR CONSORTIUM
========================================================= Appendix XII

The Seattle Federal Executive Board's\73 Interagency Alternative
Dispute Resolution (ADR) Consortium is a "shared neutrals" program
that began providing services in April 1993.  The interagency group,
comprised mostly of volunteer federal employees, offers low- or
no-cost mediation services to more than 25 participating federal
agencies in the Seattle, WA, area.\74 The consortium uses the
comediation model (two mediators working in tandem on each case) to
deal with various types of employment-related disputes, including
discrimination complaints, interpersonal conflicts, and grievances
filed by collective bargaining unit members. 


--------------------
\73 Federal Executive Boards are comprised of the top executives of
federal agencies represented in a federal region to provide closer
coordination among the agencies. 

\74 The consortium has expanded to include the governments of the
City of Seattle, King County, and the Port of Seattle. 


   HOW THE PROCESS WORKS
------------------------------------------------------- Appendix XII:1

The consortium offers agencies access to mediation services without
necessarily having to invest in training their own mediators or
purchasing mediation services.  The consortium also fills agencies'
needs for external mediators.  Agencies generally participate in the
consortium by contributing volunteer employees to be trained as
mediators, although this is not a requirement.  There is no cost to
an agency unless it contributes personnel to the pool.  In such case,
costs to the agency are for mediation training ($650 per mediator)
and for the amount of time the employee spends in training and
performing consortium-sponsored mediation.  There is no charge to
agencies for mediation services, but agencies have paid mediators'
travel expenses.  As of July 1997, the consortium had a pool of 78
mediators who provided their services as a collateral duty. 

Consortium mediation services are arranged by a person chosen by the
participating agency to be the contact between the agency and the
consortium.  This person functions as a gatekeeper, determining
whether the consortium's mediation process is appropriate to a
specific dispute.  A request for services then goes to the
consortium.  When the request for mediation services has been
accepted, a designated consortium member first considers the nature
of the dispute and the characteristics of the disputants (e.g., race
and gender), and then selects two members of the consortium's
mediation pool best suited for the mediation team.  The disputants
(an employee and his or her supervisor or peer) then agree on a
mutually acceptable site and time for the mediation to take place. 
When appropriate, an official of the disputants' agency, identified
during the intake process, who has authority to approve the terms of
a resolution is present at the mediation. 

Mediation generally takes about 3-1/2 to 5 hours, during which time
either party may end the mediation if dissatisfied with the process. 
If a settlement is reached, the parties sign a settlement agreement. 
If there is no agreement, the employee can pursue the matter through
the conventional redress channels.  Whether or not there is a
settlement, the disputants are asked to complete an evaluation of the
mediation.  The mediators themselves also evaluate the process. 


   EXPERIENCES IN DEVELOPING ADR
   RESOURCES
------------------------------------------------------- Appendix XII:2

The idea for establishing the consortium belonged to two federal
employees who, in November 1992, had recently completed mediation
training and believed that mediation was a useful alternative to
formal redress processes.  They proposed the idea to the Seattle
Federal Executive Board in January 1993, which approved it in March
1993.  One of the reasons for establishing the mediator pool was to
make available to agencies a cadre of mediators with the diverse
backgrounds appropriate to a wide variety of situations.  The price
of contributing to this pool would be small compared with that of
developing similar capabilities at multiple agencies. 

The consortium chose the comediation model for two main reasons.  One
reason was that new mediators could be trained by having them work
side-by-side with more experienced, certified mediators.  The other
reason was that the consortium would be better able to respond to the
diversity of issues and disputants. 

The consortium's mediator training program is extensive, consisting
of classroom training, role playing, and on-the-job experience.  The
training, administered by a local county dispute resolution center,
consists of 40 hours of classroom training, a written 10-hour
take-home test, and observation of at least 6 mediations.  In
addition, each trainee conducts a mock mediation that is judged by
the training provider's certified mediators.  The successful trainee
then apprentices as a comediator with a certified mediator.  The
apprenticeship consists of about 10 comediations, each of which is
critiqued by the certified mediator.  At the apprenticeship's
conclusion, the training provider evaluates the critiques and
determines whether the apprentice should be certified at the
journeyman level.  In addition to formal training, there are monthly
in-service meetings. 


   RESOLVING WORKPLACE DISPUTES
   AND LESSENING THE TIME AND
   COSTS ASSOCIATED WITH REDRESS
   AND LITIGATION
------------------------------------------------------- Appendix XII:3

According to a consortium cochairman, the consortium has filled the
need of the 25 participating federal agencies in the Seattle area by
providing high quality mediation services for nearly any kind of
situation at low cost.  The consortium's results have not been
formally evaluated; however, the consortium cochairman said he
believed that the high resolution rate has helped participating
agencies avoid the time and costs of redress and litigation. 

Between May 1993 and February 1997, the consortium mediated 171
cases, settling 153 (89 percent) of them.  Data on the nature of
settlements were being analyzed at the time of our study, according
to the consortium member responsible for the effort. 

User satisfaction with the process and with the mediators is also
high, according to the consortium's surveys of users.  Of evaluations
received from 75 users (survey results were not broken out by
successful and unsuccessful mediations), 84 percent reported that
their overall level of satisfaction with the mediation process was
good to excellent, while 73 percent of the respondents who reached
agreement said that their level of satisfaction with the agreement
was good to excellent. 


   LESSONS LEARNED BY THE
   ORGANIZATION
------------------------------------------------------- Appendix XII:4

The cochairman attributes the consortium's success to the training,
development, and evaluation process for the volunteer mediators and
to the evaluations completed after each mediation.  The post
mediation evaluations have been valuable in making improvements to
the program, according to the cochairman.  Some of the improvements
include scheduling for longer and multiple sessions and having more
caucuses between individual parties and mediators.  A major change
was made as well in the intake process, which at first was managed by
the training provider.  Because the employees of the training
provider were not familiar with government agencies, early mediations
did not always include an agency representative with the authority to
approve the terms of a resolution.  As a result, consortium mediators
with an understanding of government organizational structures now
handle the intake process. 

Another lesson learned, according to the consortium cochairman, was
that some benefits derive even in cases not resolved through the
consortium mediation.  In these cases, issues in dispute often become
clarified, which may help bring about later resolution. 

The cochairman said that there have also been lessons learned about
trends in agencies' use of consortium mediation services.  Initially,
the consortium's mediation services were underutilized.  However,
through marketing efforts and as consortium successes became known by
word-of-mouth, use of the consortium's services has increased to a
point at which the pool of volunteer mediators is now being used to
its limits.  Still, the cochairman believes, more federal agencies in
the Seattle area could be participating.  Some of these agencies, he
learned, are reluctant to expose their operations to mediators from
outside the agency.  The cochairman said he believes that outreach
geared to individual agencies is needed to encourage them to
participate in the consortium. 


MAJOR CONTRIBUTORS TO THIS REPORT
======================================================== Appendix XIII

GENERAL GOVERNMENT DIVISION

Stephen E.  Altman, Assistant Director, Federal Management and
Workforce Issues
Anthony P.  Lofaro, Evaluator-in-Charge
Geraldine C.  Beard, Senior Evaluator

DENVER REGIONAL OFFICE

Michael L.  Gorin, Evaluator
Pamela K.  Tumler, Communications Analyst

OTHER ACKNOWLEDGEMENTS

In addition to the above individuals, the contributions of the
following GAO staff are acknowledged:  Gary V.  Lawson and Brenda J. 
Lindsey, General Government Division, for their assistance in
developing information about federal agency ADR use; Robert D. 
Sampson, Health and Human Services Division, for providing
information about private sector ADR use; James M.  Rebbe, Office of
General Counsel, for legal assistance; William Trancucci, General
Government Division, and Rudolfo G.  Payan, Denver Regional Office,
for their assistance in ensuring the accuracy of the information
reported; and Lessie M.  Burke, General Government Division, for
editing assistance. 


*** End of document. ***