Not every employment dispute needs to go to court. Alternative dispute resolution (ADR) offers mediation and arbitration as alternatives to litigation—processes that can resolve conflicts faster, cheaper, and sometimes more effectively than traditional lawsuits. Understanding these options helps you make informed decisions about how to pursue your workplace claims.

Many employees encounter ADR through mandatory arbitration clauses in employment contracts. Others voluntarily choose mediation to preserve working relationships or avoid litigation costs. Knowing the difference between these processes is essential.

Mediation: Facilitated Negotiation

Mediation involves a neutral third party—the mediator—helping disputants reach their own agreement. Unlike a judge or arbitrator, the mediator doesn't decide who's right or impose a solution. The mediator facilitates discussion, helps parties understand each other's positions, and guides them toward mutually acceptable resolution.

Mediation is typically voluntary; both parties must agree to participate, and either can walk away if talks fail. Settlements are only binding once both parties sign an agreement. If mediation doesn't produce a settlement, you retain the right to pursue other remedies.

The process is confidential, encouraging honest discussion without fear that statements will be used against you later. Mediators cannot be compelled to testify about what was said in mediation.

Benefits of Mediation

Mediation offers several advantages over litigation. It's usually faster—sessions can be scheduled in weeks rather than the months or years courts take. Costs are dramatically lower than litigation, often just the mediator's hourly rate split between parties.

Because parties control the outcome, settlements can be creative. Courts award damages and injunctions; mediated settlements might include apologies, policy changes, job modifications, positive references, or other arrangements that better address the parties' actual needs.

Mediation preserves relationships better than adversarial litigation. If you want to continue working somewhere, suing your employer creates lasting hostility. Mediation allows resolution without the scorched-earth dynamics of lawsuits.

Arbitration: Private Judging

Arbitration is fundamentally different from mediation. An arbitrator hears evidence and arguments, then issues a binding decision—like a private judge. The arbitrator's award is final and enforceable in court, with very limited grounds for appeal.

Many employment contracts include mandatory arbitration clauses requiring employees to arbitrate disputes rather than sue. The Supreme Court has repeatedly upheld these clauses, even when buried in onboarding paperwork employees don't fully read.

Arbitration follows procedures similar to court but usually less formal. Discovery is typically more limited, hearings are faster, and rules of evidence are relaxed. The arbitrator may be a retired judge, practicing attorney, or industry expert.

Concerns About Mandatory Arbitration

Critics argue mandatory arbitration favors employers. Studies suggest arbitrators award smaller amounts than juries in similar cases. Employers are repeat players who know the system; individual employees are usually one-time participants.

Arbitration clauses often include class action waivers, preventing employees from banding together to challenge widespread violations. This makes small-value claims economically impractical to bring—exactly the cases where class actions are most important.

However, arbitration isn't always worse. It's faster and cheaper than litigation. Some arbitrators are employee-friendly. The informal process may suit employees without legal training better than complex court procedures.

Choosing Between Mediation and Arbitration

If you have a choice, consider your goals. Mediation works best when both parties genuinely want resolution, the relationship matters, and creative solutions might address your needs. It's low-risk since you keep all options if it fails.

Arbitration makes sense when you want a final decision, mediation has failed or isn't feasible, or you're required by contract to arbitrate. Once in arbitration, treat it like a trial—present your best case because the result is binding.

Sometimes you'll proceed through both: mediate first seeking agreement, then arbitrate if mediation fails. Many arbitration agreements require good-faith mediation attempts before arbitration begins.

Preparing for ADR

Whether mediating or arbitrating, preparation matters. Gather documentation of your claims. Know exactly what resolution you want. Understand your alternatives if ADR fails—this strengthens your negotiating position.

Consider having an attorney represent you even in informal ADR proceedings. Employers usually have lawyers present. An experienced advocate knows how to present your case effectively and can advise on settlement offers.

For arbitration especially, understand the rules. Some arbitration agreements have specific procedures, designated arbitration organizations, and limitations on remedies. Read your agreement carefully and know what you agreed to.

Getting Legal Help

Employment attorneys regularly handle mediation and arbitration. They can evaluate whether ADR is appropriate for your dispute, represent you in proceedings, and negotiate settlements. Many employment lawyers include ADR representation in their contingency fee arrangements, so you can get professional help without upfront costs. If you're facing workplace conflict, consult an attorney about the best resolution path for your specific situation.