MEDIATION
Mediation is well recognized in the construction industry. It is an accepted alternative process to litigation and, as a proactive method of addressing potential disputes, contracting parties routinely insert a dispute resolution provision in their commercial contracts. The goal is simple … to address a dispute in real time, encourage open discussion and avoid the high cost of delay and disruption of the project and job site productivity by reaching a mutually accepted agreement.
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The Role of a Project Mediator in the Project Labor Agreement
Championing Communication, Maintaining Consistency and Expediting the Settlement of Disputes on Major Construction Projects
by J. J. Pierson, Esq.
Resolving disputes through mediation is neither a recent occurrence nor a novel process. The service of an independent third-party to assist disputing parties reach a mutually satisfactory settlement is a well accepted process with historic roots and application to multiple circumstances. As utilized, the participation of a third party neutral facilitating the parties in settling their differences has been both an often used and successful method of dispute resolution.
The use of a third-party neutral has been long accepted in construction contracts to address ‘commercial claims’. However, the non-binding process is generally provided post-contract and on a singular, or ad hoc, basis. Beginning in the 1990s, the construction industry expanded contractual procedures and implemented mediation at the outset of a project to continue through the duration of the contract. As a result, disputes were addressed as they arose and post-contract claims were prevented.1 Referred to as a Project Neutral, results revealed that the contracting parties avoided post-construction claims, reduced costly, time-consuming and contentious litigation and permitted owners, construction managers and contractors to focus on project success.
During the same period of time, the use of Project Labor Agreements (“PLA”) covering major construction projects became similarly accepted. While intended to standardize the terms and conditions governing the employment of labor on the project, the PLA also addresses flexibility in work scheduling and shift hours, ensures a reliable source of skilled and experienced labor and endeavors to define the labor-management relationship during the construction process. The PLA also includes a comprehensive and standardized mechanism of dispute resolution, achieved through Arbitration.
Since the mid-90s, PLAs have implemented the dispute resolution process by naming a neutral Arbitrator to address and resolve prohibited work stoppages, settle contractual grievances and determine trade jurisdictions and disputed assignments through binding arbitration. Practitioners agree that resolving labor disputes during a project’s construction phase through a named arbitrator has been a successful procedure, especially when open discussion facilitated settlement of many issues. Observers also agree that, through the continued process of discussion and regular communication, labor harmony is fostered and co-operative labor-management relationships are enhanced through the duration of a Project.
Recognizing the importance of regular and continued communication between labor and management, one recent Project established a proactive procedure from the inception of the project for advancing labor-management relations through a Project Mediator.
The SOO Green HVDC Link project is a “first-of-its-kind” electricity transmission project that will install state-of-the-art high-voltage direct current (HVDC) transmission cable underground along 350 miles of existing railroad corridors between Mason City, Iowa and Plano, Illinois. Its Developer, Direct Connect LLC, is not only pioneering an innovative model for developing transmission infrastructure construction for low-cost renewable energy resources but, together with its construction partner, Jingoli Power Inc., initiated an advanced commitment to negotiate a Project Labor Agreement with local Building and Construction Trade Unions in Iowa and Illinois and to utilize a Project Mediator through the duration of the Project. While retaining the Project Mediator during the development stage of the project to assist the parties in formulating a PLA to match the project needs, the Project Mediator will remain throughout the duration of the project and be available to advance the reasoned and legitimate positions of each party. The Project Mediator will also maintain impartiality when addressing issues which may arise during the execution, implementation and administration of the PLA.
Adding this unique dimension of a Project Mediator to a project that is scheduled for two years of construction work and countless jobs for Building Trades men and women, the goal is to build early trust through regular and consistent communication. The Project Mediator will remain available to address labor-management questions, address potential disputes and encourage resolution of grievances prior to contractual arbitration.
The construction industry now enters the next generation of Project Labor Agreement Labor-Management Relations through the implementation of the Project Mediator — a valuable and effective tool for enhancing communication, encouraging labor-management harmony and limiting project disputes.
1. Referred to as the “Project Neutral”, the parties named an independent expert to analyze the claim and objectively perform a fact-finding technical analysis, delay and damage evaluations and provide recommendations so that the parties could settle their differences and avoid the relationship-destroying results that frequently follow a claim. The Project Neutral was also trained as a mediator so, that if necessary, the individual could assist in resolving an issue. Because the Project Neutral maintained the knowledge of the claim and the ability to resolve the dispute, the parties could move quickly to reach a mutually acceptable solution.