Insights

Alternative Dispute Resolution - What and Why


It is no secret that in recent years it has become an industry trend for high profile construction projects to be awarded to non-union contractors due, in part, to rising costs associated with work-related injuries. Projects that as recently as ten years ago were union are now being awarded to non-union labor at disproportionate rates. That trend is nowhere more apparent than in New York City, where union construction work has eroded in favor of non-union over the past twenty years. However, it’s not all doom and gloom. With the transition to a new administration also comes the promise of new infrastructure spending. The Biden administration’s infrastructure plan, which is slated to be announced at the upcoming speech to a Joint Session of Congress, should not disappoint. That is why the time is now for union labor to get back in the game, and the way back in could be ADR.

Alternative dispute resolution (ADR) is an alternative system for administering workers’ compensation claims for union workers. While it is not necessarily limited to the construction industry, that is where it is heavily utilized since it is where claims tend to be most frequent and severe. The benefit of ADR is that workers’ compensation claims are moved away from the traditional, adversarial state workers’ compensation systems by creating an independent ecosystem for the management of workers’ compensation claims. While workers’ compensation ADR programs, at a minimum, must provide benefits to injured workers that are at least up to the standard set by state laws, a well-conceived ADR program can pay big dividends for both employers and employees alike.

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