Alternate Dispute Resolution at Darden Restaurants and Hooters of America

825 Words Sep 12th, 2008 4 Pages
ADR at Darden Restaurants and Hooters of America

More companies are turning to alternate dispute resolution (ADR) as an alterative to the judicial system for settling employee disputes. There are some clear advantages and disadvantages to ADR for both employers and employees. The best-designed ADR programs are those that are fair and impartial. A good ADR program should seek to find the best possible outcome for both parties while saving time and money and preserving relationships. The least effective ADR programs tend to be unfair and perpetuate the imbalance and bargaining power discrepancy frequently found in employer-employee relationships.

In this paper, I will compare the ADR programs of Darden Restaurants and Hooters of
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The court has determined that the Darden program appears to meet the legal tests for ADR. It is important to note that Darden does not expect to reduce expenses via reduction in the payout of damages and compensation to employees with legitimate claims; rather, their expected cost savings lies in reducing court-related fees.

In stark contrast, Hooters’ ADR program is a one-sided agenda designed to help the company win arbitration cases and save time and money. The ADR program takes advantage of the company’s superior bargaining power: employees must sign the agreement to arbitrate disputes in order to be eligible for raises, transfers, and promotions. Employees are allowed only five days to review and decide if they will accept or reject the agreement.

Hooters’ ADR agreement states that the company has the right to change the rules and procedures at any time – even while in the midst of an arbitration proceeding – without notice. In addition, the rules require employees to disclose their cases to the company, along with a list of witnesses and a record of facts known to each witness. Hooters, meanwhile, is not required to reciprocate by disclosing the details of its defense. The United States Court of Appeals for the Fourth Circuit summed it up by stating that the Hooters rules are “so one-sided that their only

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