Resolving Employment Disputes with In-House Mediation

Mon, Oct 20th, 2025 | by Miles Mediation and Arbitration | Article | Social Share

By Scott Zucker

The success of mediation is well-known. Over 85% of all cases are settled when the parties come together to talk about their dispute, when each side has the opportunity to be heard and, most importantly, take an active role in crafting a resolution to the pending dispute. What is often noted by judges who assign their cases to mediation is that “mediation gives the parties the ability to control the conclusion of their dispute. Once the dispute goes to court, all decisions are left to the judge or jury, and the parties no longer have any control over the outcome.”

But often the mediation process is only considered after the lawsuit has been filed, after discovery has been conducted, and the parties are on the “courthouse steps” prepared for trial. By then the parties have likely spent a great deal of money, have personally invested much time and energy in the matter and unfortunately, may have hardened their respective positions as a result of the acrimony and animosity that often accompanies lawsuits.

Using Alternative Dispute Resolution Mediation Earlier in the Process

Therefore, the movement recently has been to consider alternative dispute resolution (ADR) on the front end of a claim after it occurs, before too much time and money has been spent. This approach works extremely well in the employment world, where employees may seek a remedy as a result of a poor evaluation, an altercation with management, a firing, or a claim of harassment.

The Benefits of Creating an In-House Dispute Resolution Program

If a system is in place for employees to address their concerns and possibly even resolve them early, all sides are deemed to be better off. From a company bottom line perspective, the ability to resolve an employee claim through in-house dispute resolution significantly reduces the amount of money spent by the company in litigation, reduces overall insurance costs, and also reduces the cost of settlement since many times the resolution is not limited to the payment of money but may involve instead letters of recommendation, a withdrawal of an objection to unemployment compensation, the creation of an accommodation for a disabled employee, or even a re-hire.

In today’s workplace, conflicts between employers and employees are almost inevitable. Whether the issue stems from communication breakdowns, perceived unfair treatment, or disagreements over workplace policies, unresolved disputes can quickly escalate, leading to lost productivity, low morale, and even costly litigation. One effective way for businesses to address these challenges is by creating an in-house dispute resolution program designed to provide employees with a fair, accessible, and structured process for raising and resolving concerns.

Creating an In-House Dispute Resolution Program

So how would a company go about starting an in-house dispute resolution program? Initially, it all would flow from a “dispute plan” being included as part of the company’s employee handbook. The handbook would provide for different levels of addressing an employee’s complaint, from notification to a supervisor to a referral to upper management to even the option of using an employee peer review method to evaluate the complaint.

But ultimately, if those initial internal systems fail to lead to a solution, the matter would then be referred to a mediator who is paid for by the company but independent and unbiased. The employee would be able to choose from a list of qualified mediators who have knowledge of and experience with the claims at issue. The mediation would be deemed as “non-binding” meaning that the parties who come together are not required to reach a resolution of their dispute nor will the selected mediator make a decision, or render a verdict, about the parties’ dispute. If the matter can’t be resolved, then there is no impact to the parties’ respective claims or positions. However, if a settlement is reached and an agreement of terms is prepared, that settlement can then be binding on the parties to create a conclusion to the ongoing dispute.

For this mediation approach to be successful, the mediation process would need to be included in the company’s employment handbook as a pre-condition to the filing of any action by the employee against the company. For example, there could be language in the employment handbook (under claims and disputes) which could read as follows:

Any controversy, claim, or dispute arising out of the employee’s employment with the company shall first be brought to the supervisor or managers responsible for that employee and if needed, to officers of the company that are responsible for HR matters. If the claim, controversy, or dispute cannot be settled internally through this process, then prior to the filing of any legal claim against the company, the employee agrees to first participate in a mediation led by an independent, third party neutral. A list of approved mediators will be provided to the employee upon request, and any such mediator may be selected by the employee to conduct the mediation.

Promoting Early Intervention

The greatest benefit of an in-house dispute resolution program is its ability to resolve problems early, before they grow into major conflicts. By providing employees with a structured avenue to voice their concerns, businesses can identify and address issues while they are still manageable. Early intervention reduces the likelihood that an employee will feel ignored or marginalized, which can otherwise push disputes toward formal complaints or lawsuits. When employees know their concerns will be heard and taken seriously, they are more likely to trust management and remain engaged in the workplace. An internal program demonstrates the employer’s commitment to fairness and respect, which builds confidence in the company’s leadership. Transparency in how disputes are handled can help dispel the fear of retaliation, creating a culture where employees feel safe to speak up without jeopardizing their careers.

Reducing Costs and Litigation Risks

Employment litigation is expensive, time-consuming, and disruptive. By offering a program that resolves disputes internally, businesses can significantly reduce legal costs, attorney’s fees, and the distraction of protracted lawsuits. Additionally, a well-run dispute resolution program can serve as evidence that an employer is acting in good faith to address workplace concerns, potentially mitigating damages or liability if litigation does occur.

Conflict resolution programs do more than just solve problems — they encourage open communication throughout the organization. Employees who feel heard are more likely to collaborate, contribute ideas, and remain loyal to the company. Over time, this improved communication strengthens workplace culture by reinforcing respect, accountability, and shared responsibility for maintaining a positive environment.

Another advantage of an in-house program is its flexibility. Employers can design processes tailored to the size, industry, and unique needs of their business. Options might include confidential reporting systems, peer review panels, mediation by neutral HR professionals, or partnerships with external mediators. The key is creating a system that employees find accessible, fair, and effective.

Conclusion

An in-house dispute resolution program is not just a safeguard against costly litigation — it is an investment in people and workplace culture. By prioritizing early intervention, building trust, reducing risks, and fostering better communication, businesses can create an environment where employees feel valued and conflicts are opportunities for growth rather than obstacles. In the long run, organizations that commit to resolving disputes fairly and constructively are better positioned to retain talent, enhance morale, and achieve sustained success.

*Originally published in the Daily Report and reprinted with permission.

About Scott Zucker

Certified mediator and arbitrator Scott Zucker focuses on business and commercial litigation with an emphasis on dispute resolution in the areas of construction, real estate, employment, insurance, and franchise law. Scott represents companies in matters relating to contract claims, loss and damage claims, delay and productivity claims, premises liability actions, and tenant dispossessory.