Mandatory Workplace Alternative Dispute Resolution, MWADR, is a workplace policy whereby disputes between employer and employees must be submitted to a dispute process. It is an alternative to the court system. An employer´s authority to implement MWADR is based on Federal and State law. The Federal law is the Federal Arbitration Act which, according to the United States Supreme Court, gives employers the power to establish such a policy for at-will employees. The specific elements required of such a policy differ by state.

MWADR typically consists of arbitration, mediation or a combination of the two. In the combined format, a dispute is first subjected to mediation in an effort to have the parties achieve a mutually satisfactory agreement. If agreement is not achieved, the matter goes to arbitration. Supporters of MWADR assert that it has several advantages over traditional litigation. Parties can avoid substantial discovery expenses and reduce attorney fees and other costs associated with litigation. Parties also have flexibility in setting the time and place of the proceeding and are free to mutually agree on the mediator or arbitrator. In addition, say the concept´s supporters, an internal MWADR procedure creates a feeling of job security, resulting in greater productivity and lower employee turnover. Critics of MWADR say that it takes a fundamental right from employees, one enjoyed by citizens in most civil disputes. That is the right to take a dispute to Court. They also assert that MWADR is an inherently unfair utilization of the employer´s power under the at-will doctrine. If an employee does not want to be a party to the policy the only option may be to quit and find other employment. Critics also believe that arbitrators rule favorably for the employer and against employees more often than does a trial jury.

In arbitration, an independent arbitrator hears both sides and renders a decision. The decision is usually binding on both parties. However, some organizations use non-binding arbitration. In the non-binding approach, a decision is typically binds the employer and not the employee. In such a process, if the employee is not satisfied with the arbitration decision, the employee can proceed to Court. The reason some organizations have a nonbonding process is that they want to be as fair as possible to the employee. Furthermore, employees usually accept the decision even when the employee loses. Consequently the employer can reduce the number of situations that actually go to litigation. After all, the prime reason for MWADR is to reduce litigation costs. Furthermore, some managers believe that forcing employees to forgo all recourse to Court can hurt morale. Consequently, non-binding arbitration balances interests. The employer reduces the cost of employee disputes. The employee gets resolution through a faster, less formal process.