It is no secret that in recent years it has become an industry trend for high profile construction projects to be awarded to non-union contractors due, in part, to rising costs associated with work-related injuries. Projects that as recently as ten years ago were union are now being awarded to non-union labor at disproportionate rates. That trend is nowhere more apparent than in New York City, where union construction work has eroded in favor of non-union over the past twenty years. That is why the time is now for union labor to get back in the game, and the way back in could be alternative dispute resolution (ADR).
Alternative Dispute Resolution (ADR) for Union Workers
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.
Alternative dispute resolution provides an opportunity to implement cutting edge and sophisticated site-specific safety programs, normally reserved for non-union labor, on union driven projects. The goal of a good safety program is to prevent injuries from ever happening, but when they do, the ADR program gets injured workers treated for their injury, and back to work quickly. Expeditiously returning employees to their full wages reduces the uncertainty surrounding payroll benefits that may have stopped due to long-term absences from work. The importance of allowing workers to realize their full earning potential, while continuing to support their families once again, in a trade they have built their life around, cannot be overstated. If there is a dispute regarding their claim, the ADR program comes with a built-in injured worker advocate who will contact the carrier and seek to resolve disputes within the conciliatory nature of the program.
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 for Union Contractors to Embrace ADR
Alternative dispute resolution is a boon to both union employees and contractors alike. It is a return to the original intent of what state workers’ compensation laws were conceived to be: a fair and equitable system that compensates employees when they are injured on the job, while also providing them with the medical care they need to return to status quo and get back to work quickly. Now is the time for unions and contractors to come to the table and agree to ADR for workers’ compensation. The benefits waiting to be derived by all parties are too great to ignore. For more information, please contact Marc Gnesin at marc.gnesin@nfp.com.
Additional Resources
Alternative Dispute Resolution Could Bring A Boost To Union Labor
Collaborative Practices that Could Reduce Risk in Design-Build Contracts