Alternative Dispute Resolution Growing

Reviewing the progress of its alternative dispute resolution program in the construction industry after two years, the Division of Workers' Compensation reports that letters of eligibility have been issued to the parties of seven collective bargaining agreements.

This alternative program was created in 1993 under Senate Bill 983. The legislation allowed large employers and groups of employers in the construction industry to establish, under collective bargaining, alternatives to the traditional workers' compensation system. In 1994, Senate Bill 853 further refined the scope of the program.

Under this alternative, management and labor agree to a limited list of providers of medical treatment, evaluation, and vocational rehabilitation, as well as to an alternative mechanism to resolve disputes. Traditionally, disputes in workers' compensation cases are litigated through the Workers' Compensation Appeals Board (WCAB). With the alternative, participants agree to submit disputes to a mediator or arbitrator, with the possibility of appealing a decision to the WCAB.

A letter of eligibility from the Administrative Director of the DWC is required to begin an alternative dispute resolution program. So far, seven programs have been approved:

The DWC continues to review other applications. Since the program began, four applicants were denied approval because their applications did not meet standards required by the Labor Code.

It is important to note that a letter of eligibility from the Administrative Director is required for an alternative dispute resolution program. This year, DWC identified two cases in which a supposed employer group was marketing a program that had not been approved. The DWC has referred both cases to the Department of Insurance for investigation of possible fraud.