ADR Explained

Workers’ compensation was designed as a no-fault insurance program to provide medical treatment and benefits promptly to injured employees without the need for costly litigation. However, the system is complex and bureaucratic and it is well known that both injured workers and employers often feel the system does not adequately address their needs. It is a system about which all sides have just complaints. “One of the main reasons that workers’ compensation claims blow up into full scale legal warfare,” says Laborer’s Health and Safety Fund of North America (LHSFNA) Executive Director Joe Fowler, “is the failure of anyone to take responsibility for ensuring that the injured worker gets prompt, understanding attention. If no one expresses interest and concern, who can blame them for heading straight for a lawyer? ADR offers another approach.”

One of the more promising angles is alternative dispute resolution (ADR) program which currently is authorized by law in ten states and partially authorized in five others. In several other states it is under consideration. Because ADR programs are only legal in the context of a collective bargaining agreement, they are available only to workers and management in the union sector. Typically, under an ADR agreement, an injured worker is put in contact with a designated ombudsperson. Trained to assist workers in negotiating the maze of paperwork and regulations that govern workers’ compensation, the ombudsperson is not a lawyer and does not work for management or the union (but may work for both, jointly). Rather, he or she helps the injured worker file the claim and secure the necessary medical care from providers designated in the ADR agreement. If a dispute develops, the ombudsperson attempts to work out a resolution that is satisfactory to all parties. If not satisfied, the injured worker may pursue mediation and, if necessary, arbitration, following procedures summarized in the ADR provisions. The agreement cannot diminish an injured worker’s entitlement to compensation, and workers retain the right to appeal an arbitration decision to the state’s workers’ compensation appeals board.

ADR States: California, Florida, Hawaii, Kentucky, Maine, Maryland, Massachusetts, Minnesota, New York, Pennsylvania

“I think the ombudsman makes all the difference in the world,” says Angie King, Director of the Midwest Regional Laborers’ Health and Safety Fund (MRLHSF), who is pursuing ADR programs in Illinois, Missouri, Kansas and Indiana. “Our business managers can say, ‘Here’s the phone number for someone who’ll help you get through this process. Meanwhile, here’s the place to go to get the treatment you need from someone that’s trained to deal with Laborers.’ That kind of concern and support goes a long way to control distrust and animosity.”

Partial ADR States: Alabama, Colorado, Illinois, Mississippi, Wisconsin

The cost savings in an ADR program come from a variety of sources. By requiring joint labor-management safety committees, the program improves on-site safety performance and reduces claims. By use of prescribed medical treatment and evaluation services, the agreement channels injured workers to facilities and professionals who are specially-trained and assigned to handle claims made by union employees-accelerating the process, ensuring better communication and often allowing more rapid recovery. By establishing light-duty, modified job or return-to-work programs, the agreement reduces lost time costs and accelerates recovery. Vocational rehabilitation and retraining programs also reduce the cost of debilitating injuries. Most significantly, an ADR program significantly reduces the huge costs and long waits of legal action.

The cost of ombudsman services-as well as mediation and arbitration services-is covered by the collective bargaining agreement. While this, ultimately, is borne by the employers, it is more than made up for by long-term reductions in employer X-Mod ratings and the consequent reduction in workers’ compensation premiums.


Information courtesy of Laborers’ Health and Safety Fund of North America


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