Policy and Law
Federal laws and policieshave helped increase the use of alternative dispute
resolution (ADR) in theFederal government as well as
guide its development. The origins of Federal ADRcan be traced to the late 19th century. The use of ADR has expandedconsiderably since then, with the greatest changes
starting around 1990.
The
transportation industryembraced ADR long ago. The Act of 1888 created the first federal ADR program,voluntary boards of
arbitration that resolved controversies between carriersand
their employers to avoid disrupting transportation.[1] Ten years later, Congress passed theErdman Act, providing for mediation for these disputes.[2]
The first federal mediationagencies began in the early 20th
century. The Newlands Act in 1913established the Board of Mediation and
Conciliation to handle railroad labordisputes.[3](This is the predecessor agency to the
current National Mediation Board.)
The next phase of governmentADR involved its application to disputes beyond
transportation and beyond thelabor area. The Federal
Arbitration Act, passed in 1925, declared a nationalpolicy
favoring arbitration, establishing this ADR process in the commercialarena.[4] In 1937, the Federal Rules of CivilProcedure authorized judges to conduct settlement
conferences in all federalcivil lawsuits.[5]In 1946, the Administrative Procedure Act
created agency administrativeprocesses as an
alternative to federal court litigation.[6]
The Civil Rights Act of 1964 created theCommunity
Relations Service of the Justice Department to help facilitate theresolution of community conflicts caused by differences
in race, color, andnational origin.[7]
In the next decade, Congressencouraged Federal agencies to use mediation,
conciliation, and arbitration toresolve Federal
employee workplace disputes by passing the Civil Service ReformAct
of 1978.[8]Two years later, the Dispute Resolution
Act of 1980 encouraged state and localgovernments to
experiment with ADR.[9]
The most significantdevelopment
in enhancing the use of ADR across the Federal government occurredin
1990. President George H.W. Bush signed into law the Administrative DisputeResolution Act of 1990.[10]The Act authorized agencies to use a
dispute resolution proceeding for theresolution of an
issue in controversy that relates to an administrativeprogram.
The use of ADR processes was intended to be (and is) voluntary. TheAct stated that a dispute resolution proceeding was
authorized "if theparties agree to such
proceeding."[11]
The introductory language forthis Act shows the Congress found that the time had come
for the government toembrace ADR:
[A]dministrativeproceedings have become increasingly formal,
costly, and lengthy resulting inunnecessary
expenditures of time and in a decreased likelihood of achievingconsensual
resolution of disputes; . . . alternative means of disputeresolution
have been used in the private sector for many years and, inappropriate
circumstances, have yielded decisions that are faster, lessexpensive,
and less contentious; . . . such alternative means can lead to morecreative, efficient, and sensible outcomes; . . .
Federal agencies may not onlyreceive the benefit of
techniques that were developed in the private sector,but
may also take the lead in the further development and refinement of suchtechniques; and . . . the availability of a wide range
of dispute resolutionprocedures, and an increased
understanding of the most effective use of suchprocedures,
will enhance the operation of the Government and better serve thepublic.[12]
The Administrative DisputeResolution Act included several key provisions.
First, it required each agencyto adopt a policy that
addresses ADR and case management. In developing apolicy,
agencies should examine ADR in connection with formal and informaladjudications,
rulemakings, enforcement actions, permit decisions, contractadministration,
litigation, and other actions.[13]
Second, each agency shalldesignate a senior official to be its dispute
resolution specialist, withresponsibility to
implement the act and the agency's ADR policy.[14]
Third, each agency isrequired to provide regular training on the practice of
negotiation, mediation,arbitration, and related
techniques.[15]The
agency dispute resolution specialist is charged with periodicallyrecommending
to the agency head employees who would benefit from this training.[16]
Fourth, each agency shallreview each of its contracts, grants, and related agreements
and consideramending them to authorize and encourage
the use of ADR.[17] This review process is designed to coverthe full range of the agency's contractual activities
with the public.
The Act had several limitations.While arbitration was authorized, the
government was permitted to withdraw fromany
arbitration award within thirty days.[18]
In this sense, government bindingarbitration was
binding only on private parties, who were understandablyreluctant
to use it. Further, mediation documents were not generallyconfidential,
as the law provided no exception to the Freedom of InformationAct,
which allows public access to government documents.[19] Finally, Congress made the law anexperiment, setting it to expire after five years.
The Administrative DisputeResolution Act of 1996[20]was enacted because of the sunset of the
1990 Act. The primary purpose of thisnew statute was
to reauthorize the 1990 Act, but at the same time, Congressremoved
the limitations of the earlier legislation. The government can nolonger back out of an arbitration award.[21] In addition, there is now an exemptionfrom the Freedom of Information Act that generally
provides for confidentialityof ADR documents.[22]Finally, the law has no expiration date.
To further promote the use of ADR,Congress simplified
the process for acquiring neutrals by addressing thedevelopment
of procedures for obtaining neutral third parties as mediators onan expedited basis.
The procedural requirementsof the 1990 and 1996 Acts have resulted in the
increased use of ADR within theFederal government. As
part of the policy development, agencies examined ADR inconnection
with formal and informal adjudications; rulemakings; enforcementactions;
issuing and revoking licenses or permits; contract administration;litigation
brought by or against the agency; and other agency actions. Agenciesbegan
to think about ADR in a variety of contexts. In addition, requiringagencies
to adopt policies led to the publication of policies and rules in theFederal Register, which in turn increased awareness about
opportunities for thesuccessful use of ADR. Requiring
agencies to designate Dispute ResolutionSpecialists
resulted in appropriate leadership within agencies for ADRactivity.
The introduction to theAlternative Dispute Resolution Act of 1998 notes how ADR
can be valuable in thecourt setting: "[ADR] has
the potential to provide a variety of benefits,including
greater satisfaction of the parties, innovative methods of resolvingdisputes,
and greater efficiency in achieving settlements; . . . [ADR] may havepotential to reduce the large backlog of cases now
pending in some Federalcourts throughout the United
States, thereby allowing the courts to process theirremaining
cases more efficiently."[23]
This Act requires eachdistrict court to "devise and implement its own
alternative disputeresolution program,"
"encourage and promote the use of alternativedispute
resolution in its district," "require that litigants in allcivil cases consider the use of an alternative dispute
resolution process at anappropriate stage in the
litigation," and "provide litigants in allcivil
cases with at least one alternative dispute resolution process."[24] Courts can require that partiesparticipate in mediation and early neutral
evaluation (although they cannotorder parties to use
arbitration.)[25]
Presidential ActionsPromoting ADR
Several presidents haveissued Executive Orders requiring the Federal
government to increase its use ofADR. In 1991,
President George H.W. Bush issued an Executive Order calling forthe training of Federal government attorneys in ADR,
noting that ADR can "contributeto the prompt,
fair, and efficient resolution of claims."[26] This Executive Order, however, includeda caveat: "Whenever feasible, claims should be
resolved through informaldiscussions, negotiations,
and settlements rather than through utilization ofany
formal or structured Alternative Dispute Resolution (ADR) process."[27]
President Bill Clintonendorsed ADR even more strongly in a 1996 Executive
Order: "Where thebenefits of Alternative Dispute
Resolution ('ADR') may be derived, and afterconsultation
with the agency referring the matter, litigation counsel shouldsuggest
the use of an appropriate ADR technique to the parties. . . ."[28]
In 1998, President Clintonissued a presidential memorandum stating, "As
part of an effort to makethe Federal Government
operate in a more efficient and effective manner, and toencourage,
where possible, consensual resolution of disputes and issues incontroversy involving the United States, including the
prevention and avoidanceof disputes, I have
determined that each Federal agency must take steps to . .. promote greater use
of mediation, arbitration, early neutral evaluation,agency
ombuds, and other alternative dispute resolution
techniques."[29]
This memorandum created theInteragency ADR Working Group and appointed the Attorney
General to act as itschair. The working group is to
"facilitate, encourage, and providecoordination
for agencies in such areas as: 1. development of programs thatemploy
alternative means of dispute resolution, 2. training of agency personnelto recognize when and how to use alternative means
of dispute resolution, 3.development of procedures that permit agencies to
obtain the services ofneutrals on an expedited basis,
and 4. recordkeeping to ascertain the benefitsof
alternative means of dispute resolution."[30]
The Interagency ADR WorkingGroup began on September 14, 1998, with a meeting
hosted by the AttorneyGeneral and the Deputy Director
for Management at the Office of Management andBudget.
Since that time, the Interagency ADR Working Group has hosted trainingsessions, meetings, and colloquia on all aspects of
ADR. The Interagency ADRWorking Group has produced
guidance documents in use throughout the federalgovernment
that are available on the following website: www.adr.gov.
DOT Policy
on the Use ofAlternative Dispute Resolution.-
Alternative Dispute Resolution Act of 1996 (in PDF
format)
[1] 25 Stat. 501(1888).
[2] 30 Stat. 424
(1898).
[3] 38 Stat. 103
(1913).
[4] 42 Stat. 883
(1925), codified asamended at 9 U.S.C. ¤¤ 1-16
(1994).
[5] See Charles Alan Wright, Arthur R.Miller, and Mary Kay Kane, FederalPractice & Procedure Civil 2d, 6A ¤ 1522.
[6] 60 Stat. 237
(1946), codified asamended at 5 U.S.C. ¤ 701 et seq.
[7]
42U.S.C. ¤ 2000g et seq. (1964).
[8]
5U.S.C. ¤ 7101 et seq. (1978).
[9] 94 Stat. 17
(1980).
[10] Pub. L.
No. 101-552, 104 Stat. 2736(codified at 5 U.S.C. ¤ 571).
[11]
[12] 5 U.S.C. ¤ 571 & note (CongressionalFindings).
[13] 5 U.S.C. ¤ 571 note (Promotion ofAlternative Means of Dispute Resolution).
[14]
[15]
[16]
[17]
[18] 5 U.S.C. ¤¤ 575,
580-81 (1990).
[19] 5 U.S.C. ¤ 552; see also
Philip J. Harter, Neither CopNor Collection Agent:
Encouraging Administrative Settlements by EnsuringMediator
Confidentiality, 41 Administrative
Law Revies315, 335-37 (1989).
[20] Pub. L.
No. 104-320, 110 Stat. 3870(codified at 5 U.S.C. ¤ 571).
[21] 5 U.S.C. ¤¤ 575,
580-81 (1996).
[22] 5 U.S.C. ¤ 574(j)
(1996).
[23] 28 U.S.C. ¤ 651 note (Findings&
Declaration of Policy)
[24] 28 U.S.C. ¤¤
651-658 (1998).
[25]
[26] Executive Order No. 12,778,
56Federal Register 55,195, 55,196 (October 23, 1991).
[27]
[28] Executive Order No. 12,988,
61Federal Register 4729 (February 5, 1996).
[29] Memorandum from the President ofthe
[30]