EEOC’s Proposed Federal-Sector EEO Reforms Could Put ADR at Center Stage

The Equal Employment Opportunity Commission has proposed a substantial overhaul of the process used by federal employees and applicants to pursue claims of discrimination, harassment, and retaliation. Although much of the attention will understandably focus on the proposed elimination of mandatory EEO counseling and the dramatic reduction in access to hearings before EEOC administrative judges, the proposal also has important implications for alternative dispute resolution.

Indeed, one of the more interesting consequences of the proposed rules may be that mediation and other forms of voluntary dispute resolution become more important, not less.

The proposed rules do not radically rewrite the existing requirement that federal agencies maintain ADR programs. Instead, the EEOC proposes to dismantle portions of the existing administrative process while deliberately preserving ADR as an available avenue both before and after a complaint is filed. The result could be a federal-sector EEO process in which parties have fewer mandatory procedural stops but greater reason to explore settlement early.

The End of Mandatory Counseling — But Not ADR

Under the current system, an aggrieved federal employee generally must contact an EEO counselor within 45 days and proceed through a pre-complaint counseling process before filing a formal complaint. Where ADR is offered, an employee may often elect ADR — most commonly mediation — instead of traditional counseling.

The EEOC proposes to eliminate that mandatory counseling requirement entirely. Employees instead would generally have 60 days from the challenged discriminatory event or personnel action to file a written complaint directly with the agency.

ADR, however, would remain.

Proposed § 1614.102(b)(2) would continue to require federal agencies to “establish or make available an alternative dispute resolution program.” The existing regulation requires that ADR be available during both the “pre-complaint process” and the “formal complaint process.” Because the proposal would eliminate the formal concept of a pre-complaint process, the new language would instead require ADR to be available “before and after a complaint is filed.”

That wording may appear to be little more than housekeeping. Practically, however, it is significant.

Federal employees would no longer need to enter a mandatory counseling process before filing a claim. Yet they could still pursue ADR before filing. And, importantly, seeking pre-filing ADR would not itself constitute an election to proceed under the EEO process for employees who may also have rights under a negotiated grievance procedure.

That preserves an important window for early resolution without forcing the employee immediately to choose a litigation path.

The EEOC’s Own Numbers Favor ADR

The Commission’s justification for eliminating mandatory counseling provides perhaps the strongest argument for retaining — and potentially expanding — meaningful ADR.

According to the EEOC, from 2017 through 2021 federal agencies conducted an average of 35,618 counseling matters each year, but only about 385 settled during counseling — approximately one percent.

Agency ADR programs produced dramatically different results. During the same period, ADR resulted in an average of 3,924 pre-complaint settlements annually, representing approximately 11 percent of pre-complaint matters.

An eleven-percent settlement rate may not sound extraordinary standing alone. But compared with the one-percent rate produced by mandatory counseling, it is difficult to ignore.

The proposed rule therefore reflects an important distinction between process and dispute resolution. Requiring parties to pass through an administrative procedure does not necessarily bring them closer to resolution. Putting them into a meaningful process with someone trained to help them negotiate sometimes does.

For lawyers and parties, that distinction matters.

ADR Would Remain Voluntary

The Commission considered going farther and making ADR mandatory. It expressly rejected that approach.

The proposed rule explains that ADR works best when participation is appropriate to the circumstances and consistent with principles of voluntary resolution. Agencies therefore would continue to be required to maintain ADR programs and make reasonable efforts to settle cases, but employees would not be compelled to mediate.

That preserves one of the fundamental characteristics of mediation: the neutral facilitates the negotiation, but the parties retain control over whether the dispute resolves.

The distinction is especially important in employment disputes, where the underlying controversy may involve continuing workplace relationships, reinstatement, reassignment, accommodations, management practices, personnel records, references, leave issues, or other matters for which a binary adjudicated result may offer a poor solution.

A decisionmaker ordinarily determines who wins. A well-designed mediation can address what the parties actually need.

ADR Could Begin Before the Complaint — and Continue Throughout the Case

The proposal does more than simply preserve an agency’s ADR program.

Proposed § 1614.603 would require agencies to make “reasonable efforts to voluntarily settle complaints of discrimination as early as possible in, and throughout, the administrative processing of complaints.” Any resulting settlement would have to be written, signed by both parties, and identify the claims being resolved.

The message is difficult to miss: settlement is not intended to be a one-time event on the procedural calendar.

That is good dispute-resolution policy.

Cases frequently become more capable of resolution as information develops. A dispute that cannot be mediated successfully immediately after an employment action may look very different after documents have been exchanged, witnesses interviewed, damages better understood, or the parties have lived with the controversy for several months.

The proposal recognizes this reality in another interesting way. During the agency investigation, agencies would expressly be “encouraged to incorporate alternative dispute resolution techniques into their investigative efforts to promote early resolution of complaints.”

That provision deserves attention.

Investigation and settlement traditionally can become separate tracks: first build the record, then discuss settlement. The proposed language suggests a more fluid process in which factual development can create opportunities for resolution rather than merely preparing the case for eventual adjudication.

For lawyers, that may counsel against viewing mediation as a single box to check. The better question may be: When does the factual record contain enough information for both sides to make an informed settlement decision?

A New “Offer of Resolution” Could Change Settlement Strategy

One of the proposal’s most consequential settlement provisions may not technically be ADR at all.

The EEOC proposes substantially revising § 1614.109 to create a more useful “offer of resolution” procedure.

After a written complaint is filed, an agency could make a formal written settlement offer at any point during administrative processing. A valid offer would have to identify the claims and parties involved, state the monetary and nonmonetary relief being offered, address reasonable attorney fees and costs, remain open for at least 30 days, and explain the consequences of rejection.

Those consequences could be significant.

If the complainant rejects a valid offer and ultimately obtains relief that is not more favorable than the offer, the complainant generally would be unable to recover attorney fees and costs incurred after expiration of the offer.

The EEOC acknowledges that the existing offer-of-resolution procedure has rarely been used. The proposal is specifically designed to transform it into a meaningful settlement device available throughout the administrative process.

That could materially affect mediation strategy.

An agency that believes it has made a serious settlement proposal may formalize that position through an offer of resolution. Conversely, counsel representing an employee will need to evaluate those offers with considerably more care because rejecting one potentially changes the economics of continuing the case.

Mediation could provide a particularly useful setting for assessing those offers. A neutral can help the parties evaluate not merely whether one number exceeds another, but the value of nonmonetary terms, litigation risk, delay, attorney fees, workplace considerations, and the range of possible administrative or judicial outcomes.

Related Claims Could Be Mediated Together

Another potentially significant development involves related complaints.

The proposal would eliminate administrative class complaints but permit agencies or the Commission to jointly process related individual complaints. That joint processing could expressly include “coordinated or joint alternative dispute resolution.”

This creates an intriguing role for multi-party mediation.

Suppose several employees challenge the same policy, supervisor, employment practice, or series of related decisions. Rather than conducting entirely separate mediations, an agency could potentially coordinate the disputes through a common ADR process.

The proposal nevertheless preserves the individual nature of each claim. A settlement would bind only the identified parties who knowingly and voluntarily agree in writing to resolve their claims. One complainant’s settlement would not dispose of another employee’s claim.

That structure could permit creative mediation approaches — common sessions addressing institutional issues combined with separate negotiations concerning individual damages or relief — without converting the proceeding into a class action.

What About Arbitration?

The proposal is much more significant for mediation and negotiated settlement than for arbitration.

The EEOC uses the broad term “alternative dispute resolution,” and existing EEOC guidance recognizes numerous ADR techniques, including mediation, facilitation, settlement conferences, early neutral evaluation, fact finding, ombuds programs, and other processes. Mediation historically has been the dominant federal-sector EEO ADR mechanism.

The proposed rule does not create a new system of binding arbitration for ordinary federal-sector EEO complaints.

Arbitration remains relevant principally where an employee is covered by a negotiated grievance procedure under a collective bargaining agreement. In those circumstances, an employee may have to elect between the statutory EEO process and the negotiated grievance process. If the grievance proceeds to arbitration and raises discrimination issues, the proposal preserves a mechanism for Commission review of the resulting arbitration decision.

Practitioners therefore should resist treating “ADR” in the proposed regulation as synonymous with arbitration. The far more immediate consequence appears likely to be an expanded practical role for consensual processes — especially mediation.

The Practical Opportunity for Lawyers

If adopted substantially as proposed, the new system could require a change in mindset from both employee and agency counsel.

Without mandatory pre-complaint counseling, the period immediately following an employment dispute may become more important. Counsel should consider whether early mediation would be productive even before a formal complaint is filed.

At the same time, ADR should not cause counsel to lose sight of filing deadlines. Under the proposal, the employee generally would have 60 days to file the complaint. Pre-filing negotiations or mediation should not be assumed to suspend that period.

Once a complaint is filed, lawyers should continue evaluating settlement as the record develops rather than waiting for an artificial procedural milestone. The proposal expressly contemplates ADR during investigation and voluntary settlement efforts throughout administrative processing.

And agencies should ensure that whoever participates in mediation has meaningful settlement authority. ADR accomplishes little when the people in the room can discuss a resolution but cannot authorize one.

Less Process Could Mean More Dispute Resolution

The EEOC describes the purpose of the federal-sector EEO system as providing a quicker, less formal, and less expensive method of resolving employment disputes outside of court. Its proposed reforms reflect considerable dissatisfaction with whether the current system actually achieves that objective.

Whether the proposed restructuring ultimately improves the adjudicative process will undoubtedly generate debate.

From an ADR perspective, however, one principle underlying the proposal deserves attention: procedure and dispute resolution are not the same thing.

The Commission proposes eliminating mandatory counseling because its data suggest that requiring people to participate in a process does not necessarily resolve their disputes. At the same time, it is preserving voluntary ADR because the same data suggest that meaningful settlement processes actually do resolve a significant number of them.

That may prove to be one of the most important features of the proposed reforms.

If fewer federal EEO disputes are destined automatically for lengthy administrative proceedings, lawyers on both sides may have a greater incentive to identify the cases that can be resolved — and to bring in a neutral early enough to help make that happen.

Sometimes streamlining adjudication does more than make litigation faster. It creates an opportunity to ask whether the dispute needs to be adjudicated at all.

Nationwide ADR.® Trusted. Balanced. Resolution Driven.®