The Future of In-House Dispute Resolution Processes: Factors for Employers to Consider

Mon, Mar 10th, 2025 | by Miles Mediation and Arbitration | Article | Social Share

By Donna V. Smith

What happens to the embedded in-house dispute resolution process if the company turns away from the DEI (diversity, equity, inclusion) policy for various reasons, including political ones? Or fear that it is seen as setting quotas or favoring diversity over merit?

As an employment law mediator, I am following the rapidly evolving landscape of employment law, particularly in response to recent governmental actions affecting DEI policies. The White House’s Executive Order, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (January 21, 2025), has sparked widespread debate. While some view it as a reaffirmation of civil rights laws, others argue it seeks to dismantle DEI programs.

Regardless of perspective, one thing is clear: uncertainty reigns, and DEI remains a critical topic. The Executive Order and related changes impact not only federal employers but also private businesses, government contractors, and educational institutions. While private employers are not compelled to eliminate DEI programs, the order’s intent appears to push them toward revising or narrowing their initiatives.

Without debating the merits of DEI, it is crucial to examine the unintended consequences of modifying or eliminating these programs.

The Risk of Eliminating DEI Complaint Resolution Procedures

A key concern is the risk of “throwing the baby out with the bathwater”. DEI programs typically include robust complaint and resolution mechanisms. Removing these programs without addressing the need for effective internal dispute resolution could pose risks to employers, employees, and workplace culture.

Another issue is how these changes affect risk analysis in mediation. With increasing legal challenges to DEI, how will employment law claims evolve? Will employers face expanded liabilities, or will defenses against claims strengthen?

The Role of Internal Complaint Resolution Systems

For decades, employers have implemented EEO policies to ensure compliance with anti-discrimination laws. These policies, which typically affirm a commitment to non-discrimination, are a central element in employment litigation. Furthermore, employers are legally obligated to investigate workplace complaints, including discrimination, safety, and misconduct concerns. A strong internal complaint resolution process benefits both employees and employers.

Benefits for Employees:

• Provides a safe avenue to voice concerns without fear of retaliation.
• Ensures transparency and fairness in addressing complaints.
• Encourages prompt conflict resolution, improving workplace relationships.
• Reduces stress and enhances trust in the organization.

Benefits for Employers:

• Enhances employee retention by fostering a supportive environment.
• Improves productivity and workplace morale.
• Mitigates legal risks by proactively addressing complaints.
• Identifies systemic issues, allowing for policy improvements.

The Intersection of DEI and Internal Complaint Procedures

Many organizations, including private companies, government contractors, and educational institutions, have embraced DEI initiatives beyond EEO compliance. These programs often include mentorship, employee councils, training, and hiring outreach efforts. A crucial component of DEI programs is their complaint resolution processes, which typically involve early dispute resolution, internal investigations, and anti-retaliation provisions.

Employers implement DEI programs for various reasons, including contractual obligations and corporate values. Research shows that DEI initiatives enhance employee engagement, creativity, decision-making, talent attraction, and workplace culture. However, DEI programs have faced criticism for allegedly prioritizing diversity over merit, leading to increased legal scrutiny.

Navigating the Changing Landscape

With DEI programs under growing legal and political pressure, companies must reassess their approach. The U.S. Supreme Court’s 2023 ruling against affirmative action in university admissions intensified this scrutiny. While the EEOC has reaffirmed the legality of workplace DEI initiatives, challenges continue to mount.

In response, some companies have scaled back DEI programs to mitigate litigation risks. However, eliminating these programs entirely — particularly their embedded complaint resolution processes — could leave employers vulnerable. Without clear internal mechanisms, employee grievances may escalate into legal disputes, increasing exposure to lawsuits and reputational damage.

The Path Forward

Employers navigating these changes should consider:

• Preserving Internal Complaint Procedures: Regardless of DEI program adjustments, maintaining a structured dispute resolution system is crucial.
• Enhancing ADR (Alternative Dispute Resolution) Mechanisms: Strengthening internal mediation efforts can provide a proactive approach to resolving conflicts.
• Ensuring Compliance with Legal Obligations: Even in the absence of a DEI initiative, companies must uphold EEO policies and legal responsibilities to investigate complaints.
• Fostering Workplace Inclusion Beyond DEI Labels: Organizations can continue promoting a positive work culture through employee engagement and transparent communication.

Conclusion

The evolving DEI landscape presents complex challenges, but employers can mitigate risks by safeguarding internal complaint resolution systems. Rather than discarding these processes with broader DEI rollbacks, organizations should recognize their intrinsic value in maintaining compliance, fostering workplace harmony, and reducing legal exposure.

*Originally published in the Daily Business Review and reprinted with permission.

About Donna V. Smith

Donna Smith is a highly effective mediator and arbitrator who has enjoyed a 35 year-long career in the field of labor, employment, and business law.

As an attorney, Donna represented both employers and employees at highly acclaimed law firms. Her vast experience on both sides of the table uniquely impacts the dialogue between parties who are navigating solutions to resolve their disputes. As a mediator, her clients praise her demeanor, patience, and commitment to roll up her sleeves to keep working through even the most unusual challenges.