When an employee raises a serious workplace concern, the formal end of the path is either an EEOC charge, a DOL complaint, or a lawsuit. Alternative dispute resolution (ADR) sits between the informal conversation and the formal filing, offering employees and employers a structured way to resolve the issue without going to court. ADR has been a standard part of employment agreements for decades. The landscape changed in 2022 when the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFASASHA) limited mandatory arbitration for specific categories of claims, and employers have spent the years since adjusting their agreements accordingly.
The Two Most Common ADR Methods Workplace ADR generally takes one of two forms. Mediation is voluntary and non-binding. A neutral mediator helps the parties reach their own resolution. If mediation fails, the dispute continues through other channels. Arbitration is more structured and usually binding. A neutral arbitrator hears evidence and issues a decision that functions like a court judgment, with very limited grounds for appeal.
Other ADR methods exist (early neutral evaluation, ombudsman programs, peer review panels), but mediation and arbitration account for the vast majority of workplace ADR in the U.S.
When ADR Makes Sense and When It Doesn't ADR works well for interpersonal disputes, wage claims, contract disagreements, and some discrimination matters where both sides want privacy and speed. It's usually faster than litigation (months rather than years) and significantly less expensive.
ADR works poorly when the power imbalance between the parties is severe, when the employee needs injunctive relief that only a court can grant, or when the employer's arbitration agreement limits damages or remedies in ways that courts would not. Those concerns drove much of the 2022 legislative action.
Is Mandatory Arbitration Still Legal? In most employment contexts, yes. Federal courts continue to enforce arbitration agreements under the Federal Arbitration Act. The big exception is EFASASHA, which gives employees the option to bypass arbitration for sexual assault and sexual harassment claims even if they signed a pre-dispute arbitration agreement.
How EFASASHA Changed the Landscape The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, signed March 3, 2022, made pre-dispute arbitration agreements unenforceable at the employee's election for cases involving sexual assault or sexual harassment . Employees can choose to litigate those claims in court even if they previously signed an arbitration agreement, and they can also opt out of class-action waivers for those claims.
The law's reach is broader than many employers initially understood. If a dispute includes a sexual harassment claim alongside other claims (retaliation, hostile work environment based on other protected classes), the employee can often remove all the related claims from arbitration. Employers have responded by reviewing their agreements, carve-out language, and complaint procedures.
How Employee Relations Teams Should Think About ADR in 2026 ADR is one tool among several. For HR and employee relations teams, the practical framework is to route disputes to the least formal resolution that works. A quick conversation resolves many issues. Mediation handles disputes where the relationship needs to continue. Arbitration and litigation come last, and they come with costs (financial, time, reputational) that should be weighed honestly.
The reporting pathway that feeds ADR matters as much as the ADR process itself. Clean intake, consistent investigation procedures, and clear documentation keep every subsequent step smoother. AllVoices' HR case management platform handles the intake and investigation work that precedes most ADR decisions, which gives employee relations teams the record-keeping foundation the process requires. For employers reviewing their arbitration agreements post-EFASASHA, coordination with employment counsel is essential; the carve-out language and procedural details matter more than the headline provisions.
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