ROCHESTER, N.Y. Kodak's new mediation program manages disputes in workplace

Companies are settling disputes with peer panels to avoid court cases.
WASHINGTON POST
ROCHESTER, N.Y. -- His wife was a month away from giving birth to their first child when Michael Kenney's supervisor at Eastman Kodak Co. told the 30-year-old digitizing technician that his independent contractor position was disappearing and he would soon be jobless.
Kenney had given up his full-time job at Kodak to attend Baptist Bible College for two years, returning in 2001 on contract. After getting the bad news about his job in May 2002, Kenney said, he did two things: He prayed, and he went to Kodak's new program that lets employees take workplace disputes to their peers, who are empowered to overturn management decisions.
"I was leery about it at first," he recently recalled. "I wasn't sure if they'd really listen to both sides of the story in a non-biased way."
Kenney took his case to a trained adjudicator who was an executive in another part of the company. After telling his story in a meeting at Kodak Park here, Kenney was excused so the "judge" could hear from the supervisor and other witnesses.
The adjudicator reversed the supervisor's decision, saying Kodak had been inconsistent in administering its educational-leave policy and that Kenney deserved to be reinstated to the permanent position he held before leaving for college. Kenney learned the good news in a hand-delivered letter.
"I had to read it myself -- twice -- before I could see that the decision was in my favor," he said.
Experimentation
Kodak's Resolution Support Services program, which also gives workers the choice of a five-member panel, is the result of five years of experimentation. The company's personnel practices have long been regarded as progressive, and executives said they view better methods of handling workplace disagreements as essential to productivity and cooperation.
This is especially important now, several executives said in interviews, because Kodak's filmmaking business faces great competitive and cost pressures from digitized photography.
Dozens of companies -- including Cigna, Dana Corp., DuPont, Exelon, General Electric, Hershey Foods, International Paper, Marriott International and Newell Rubbermaid -- have established similar programs over roughly the past decade. Businesses see them as a way to boost morale, improve management and save litigation costs. And workers can have their say without duking it out in court.
Only about 13 percent of American workers belong to unions, which negotiate grievance procedures as part of a contract. So many workplaces simply haven't developed a good system for dealing with conflict.
Employment disputes
Employment-discrimination lawsuits are the second-largest single source of civil litigation, after prisoner petitions, according to the Administrative Office of the U.S. Courts. About 21,000 lawsuits are filed each year in federal courts by workers saying they suffered bias based on race, sex, age, religion or disability. About 80,000 people each year bring complaints of workplace bias to the U.S. Equal Employment Opportunity Commission, which enforces laws banning workplace discrimination.
Many employment disputes end up in court because American law presumes "employment at will," meaning nonunion workers can be fired at an employer's discretion, regardless of the circumstances, and there are few alternatives for an aggrieved employee.
"A lot of executives found themselves saying, 'There's got to be a better way,'" said Ann Reesman, general counsel of the Equal Employment Advisory Council, which represents 340 of the Fortune 500 companies.
One reason is cost.
Many companies have learned that blocking debate and forcing workers to take their problems to court can be expensive, Reesman said. Arguing even a frivolous lawsuit in court can cost a company $50,000 to $100,000 just to get to the point at which a judge can dismiss the case. One company set up an alternative dispute resolution system, she said, after spending $450,000 to defend itself successfully against a sexual harassment lawsuit.
Adjudication
Alternative dispute resolution systems, "administered properly," make sense because they help companies root out bad managers and improve workers' morale by creating a "safety valve" for complaints, said L. Steven Platt, a Chicago-based employment lawyer.
Kodak's system "has every element a successful dispute resolution system" needs, said Harvey Caras, whose Clarksville, Md., consulting firm counsels 900 clients -- including Allied Signal, International Paper, Marriott, PepsiCo's Quaker division, Toyota Motor and Tyson Foods -- on setting up similar programs.
All those who serve as judges at Kodak, as either single adjudicators or panelists, are trained and then chosen at random to hear cases. Workers are also coached on how to best present their claims, including providing evidence and witnesses.
Adjudication takes one to two days. Decisions are made by majority vote, taken by secret ballot. Whatever the adjudicator or panel decides is binding on the company.
About 40 cases have been heard in the 18 months since Kodak's program was launched. The peer panels have found for workers about 20 percent of the time, and single adjudicators have decided for the worker, at least to some extent, in about 60 percent of cases.