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:

• An agreement between the California Building and Construction Trades Council, AFL-CIO, and the Metropolitan Water District of Southern California. This agreement covers all contractors and subcontractors on the $2 billion, 5-year construction of the Domenigoni Reservoir near Hemet in Riverside County. The project is expected to employ 1,500 workers.

• An agreement between the District Council of the International Brotherhood of Electrical Workers and its 20 local unions and a multi-employer group, the National Electrical Contractors Association, representing about 300 contractors. Individual contractors will decide whether or not to sign the master agreement. To date, 204 employers have signed, covering roughly 5,000 employees.

• An agreement between the Southern California District Council of Carpenters and its 19 local unions and six different multi-employer groups consisting of about 1,000 contractors. Each individual employer must decide whether or not to sign the agreement. Three employers have signed, covering over 400 employees.

• An agreement involving the Southern California Pipe Trades District Council No. 16 and a multi-employer group, the Plumbing and Piping Industry Council, Inc. Six employers have signed, covering over 100 employees.

• The Cherne Contracting Corporation and Steamfitters Local 250 have signed two agreements covering projects at two oil refineries. Each agreement covers approximately 1,000 employees.

• An agreement signed by TIMEC Co., TIMEC Southern California, Inc., and the International Union of Petroleum and Industrial Workers and covering approximately 2,000 workers in construction and construction maintenance.

• The Contra Costa Water District's Los Vaqueros Project is a $200 million dam project spanning two and a half years and employing 750-1,000 workers. An agreement covering all contractors and subcontractors has been signed by the water district and the Contra Costa Building and Construction Trades Council, AFL-CIO.

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.