Will the future of workers' compensation be ADR?

As mandatory arbitration continues to be adopted in place of litigation, it remains to be be seen whether mandatory arbitration will replace costly and time consuming litigated adversarial hearings in workers' compensation. During the last two decades employers and insurance companies have fashioned contracts to include Alternate Dispute Resolution (ADR) proceedings to reduce costs and awards.


The future of workers' compensation programs is being challenged by both workers and employers as each side tries to maneuver for the best position in the changing market. Both sides seem unhappy with the "Grand Bargain" that was crafted in another era, the early 1900's. The European Model that the US program was fashioned after has long ago been rejected by those who enjoy living on the other side of "the pond."

Keeping a watchful eye on the Millennial Generation affords one an insight into what may be on the horizon. The NY Times reports today that even the "start-up generation" is now headed down the path to ADR.

"For start-ups — many of which began in Silicon Valley — the clauses can seem to conflict with professed goals of upending business as usual and being open with employees. Arbitration, by its very nature, is a secretive process that is often lopsided in favor of the employer. That secrecy, federal labor officials said, can allow widespread problems to persist because the process bars employees from sharing their experiences with others who might be in similar positions.

“They give their young workers Ping-Pong tables and take away their constitutional rights,” said Cliff Palefsky, an employment and civil rights lawyer in San Francisco.

Click here to read the entire article. 

Start-Ups Embrace Arbitration to Settle Workplace Disputes, NY Times 5/15/2016