Sunday, July 30, 2006

Harris on ADA Mediation

On SSRN, Seth Harris has just posted Disabilities Accommodation, Transaction Costs, and Mediation: Evidence From the EEOC's Mediation Program, an interesting empirical study. The abstract:

This paper examines whether mediators' job is different and more difficult when workers and employers are negotiating over a disabilities accommodation issue as compared with negotiations over other employment discrimination issues. The mediator's job includes getting the parties to exchange information, and at times acquire information, and to accept the new information as relevant to their expectations about the negotiation's results. This paper focuses on transaction costs in disabilities accommodations negotiations that might make this aspect of the mediator's job more difficult. Specifically, if the information needed in disabilities accommodations negotiations is more complex, more extensive, and more closely held by the parties, the mediator's job in those negotiations will be more difficult.

There are several grounds for speculation that the mediator's role in disabilities accommodations negotiations is different. First, workers' rights and employers' responsibilities under the ADA's accommodation mandate are more ambiguous and contingent than under most other anti-discrimination statutes. Second, and closely related, employers may enter negotiations with a bias against accommodations claims. Third, although common to many negotiations, bilateral asymmetric information may be a particular problem in disabilities accommodation negotiations.

Finally, finding an effective and efficient accommodation can be a vastly more complex undertaking than, for example, calculating and remedying a discriminatory pay differential or redressing a discriminatory firing or demotion decision.

Using data from the U.S. Equal Employment Opportunity Commission's mediation program, this paper offers preliminary evidence regarding differences between disabilities accommodation negotiations and negotiations over other employment discrimination issues. It offers an original analysis of a data set constructed by E. Patrick McDermott and his co-authors from a survey of participants in the EEOC's mediation program. The participants' responses offer indirect evidence of differences in the informational transaction costs that arise in disabilities accommodations negotiations and negotiations over other employment discrimination issues.

The legal literature identifies three methods that mediators use to overcome informational transaction costs: (1) mediators improve information exchange; (2) mediators help to de-bias negotiations; (3) mediators serve as bridges to information about solutions to accommodations problems and, in selected cases, propose solutions that the participants would not or could not propose themselves. Participants were asked to react to five favorable statements about their mediators that were reasonable proxies for these techniques. I found statistically significant, if small, differences between the responses of participants in disabilities accommodations negotiations and participants in negotiations over other kinds of employment discrimination issues. This evidence suggests that mediators have a more difficult time using these techniques to overcome transaction costs in disabilities accommodation negotiations. Thus, because they are harder to overcome, we can deduce that there is something different about informational transaction costs in disabilities accommodations negotiations.

The evidence suggests three conclusions about what the differences are. First, information exchange is more difficult in disabilities accommodations negotiations. Second, the mediators' role in proposing solutions and providing information about possible solutions is more critical to disabilities accommodations negotiations. Finally, disabilities accommodations negotiations are more likely to be stalled and frustrated by employers' biases against disabilities accommodations.


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