Alternative Dispute Resolution (ADR) first popped up thanks to employers and unions back in the early 90s, mainly in union-heavy states like California, New York, and Illinois. New laws made it possible to set up a legal alternative to the standard system, letting employers and unions in the construction business get the green light to ditch the usual system and roll out their own version of workers’ comp through collective bargaining.
In California, Labor Code 3201.5 effective July 1993, permitted the establishment of a program whereas, a union and an employer or group of employers in the construction industry could collectively bargain to create an alternative to statutory workers’ compensation using ADR. The use of ADR by Unions grew over time for one simple reason: IT WORKS.
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Memorandum of Understanding
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