Many employers know that mediation is well suited to settling employment disputes involving discrimination, harassment, whistleblower and wrongful termination claims. Yet few employers consider adding mediation clauses to employment agreements.

“To address potential disputes, employers should consider building a mediation clause into an employment agreement because it creates a path for dispute resolution and encourages early engagement,” according to Hon. Margaret A. Brennan, (Ret.), senior mediator and arbitrator at ADR Systems, “A well-drafted mediation provision can identify providers and set timeframes for initiating mediation. This clarity removes uncertainty and ensures both sides understand how and when disputes will be addressed.”

Employers can realize a variety of benefits when they use mediation to settle employment disputes. Three key benefits are outlined below.

Key Benefits of Using Mediation for Employment Disputes

Confidentiality and reputational protection

Mediation is confidential. This protects employee and employer privacy and prevents workplace matters from becoming part of the public record.

Reduced costs and faster resolution

Mediation costs less than arbitration or litigation. Reduced discovery and less time preparing motions and case materials contribute to faster resolution and lower overall costs.

Minimized business disruption

Employment disputes divert management attention and can disrupt daily operations. Mediation allows organizations to address conflict promptly while maintaining productivity and stability.

The Value of Mediation Clauses in Employment Contracts

Mediation clauses in contracts establish a defined process for handling disputes. This structure promotes early resolution and provides both employers and employees with a clear conflict resolution process to follow.

For organizations seeking to incorporate mediation into employment agreements, ADR Systems provides model clause language found on our website for use in workplace contracts.

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Hon. Margaret A. Brennan, (Ret.) served for 19 years in the Circuit Court of Cook County Chancery and Law Divisions and cultivated expansive knowledge of commercial cases such as employment matters involving discrimination and retaliatory discharge, construction and legal malpractice disputes. Colleagues commend her intelligence, persuasiveness, remarkable patience, careful case preparation and boundless energy.

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