It is no secret that in recent years, high-profile construction projects have increasingly been awarded to non-union contractors. One contributing factor has been the rising costs associated with work-related injuries. Projects that were union-driven a decade ago are now disproportionately going to non-union labor. This trend is especially visible in New York City, where union construction work has steadily declined over the past twenty years. The time is now for union labor to reclaim its position - and one way forward is through alternative dispute resolution (ADR).
What is Alternative Dispute Resolution (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.
For employees, ADR includes a streamlined approach to medical benefits and dispute resolution. Most importantly though, alternative dispute resolution is a collectively bargained process which returns dignity to injured workers and focuses on the swift and fair resolution of their claims. In a well-run ADR program, employees receive medical treatment immediately after accidents, with no delays. They are assigned personal care coordinators and case managers to ensure that their treatment is being facilitated in a prompt and fair manner. Treatment disputes are reduced because doctors in the ADR program are agreed upon by both unions and management. Benefits are paid promptly, at an equal to or greater level than state-mandated benefits.
Why ADR Matters for Safety and Recovery
Alternative dispute resolution programs also open the door to advanced, site-specific safety initiatives, often seen on non-union projects, being implemented on union jobs. While the ultimate goal is injury prevention, ADR ensures that when accidents occur, workers receive care quickly and return to work as soon as possible. This reduces uncertainty around payroll benefits and helps employees regain their full earning potential. If disputes arise, ADR includes an injured worker advocate who works directly with carriers to resolve issues in a cooperative manner.
Benefits of Alternative Dispute Resolution for Employers
Much of what was discussed above is, likewise, a benefit for employers. Streamlined treatment and the removal of barriers regarding treatment denials help to get injured works back on the job quicker and claims closed faster. The injured worker advocate, who will facilitate the resolution disputes with the carrier, eliminates the myriad delays associated with the litigation process that always extends the life and cost of a claim. A return-to-work program reduces the extraneous costs of hiring replacements for injured workers by bringing employees back, within their restrictions, to fill needed jobs. A cutting edge safety program, signed off on by the union, makes any project more desirable for insurance carriers.
The bottom-line, most important, and easily realizable benefit of a workers’ compensation ADR program on construction projects, for both labor and management, is the reduction of insurance costs on the project. The big picture is that a reduction of insurance costs for union contractors allows them to bid more competitively and leads to more available jobs for union workers. There is an oft-cited Cornell University study, which was published in 2001 and then updated in 2012, that boasts compelling statistics, including data from New York, Minnesota and California, showing a substantial reduction in ultimate project loss costs within an ADR program when juxtaposed with a traditional workers’ compensation program.
The Call to Action: Embrace Alternative Dispute Resolution
Alternative dispute resolution represents a win-win for unions and contractors. It aligns with the original intent of workers’ compensation laws: providing fair benefits and medical care while enabling employees to return to work quickly. Now is the time for unions and contractors to collaborate and adopt ADR programs. The benefits, for workers, employers, and the industry, are too great to ignore.
