The number of employers mandating alternative dispute resolution for workplace disputes is not growing, despite employers' success with such programs.

Although mandatory arbitration agreements have helped save employers time and money by avoiding costly litigation, some concerns surrounding the provisions are hindering widespread use.

The lack of consistent case law on the provisions' enforceability, the limited appeal rights with arbitration judgments and some philosophical concerns are several of the factors discouraging the use of mandatory arbitration agreements.

Legal observers agree, though, that, when properly used, mandatory workplace ADR programs can be a cost-effective and efficient alternative to litigation.

"Will it solve the tort liability problem? No. Will it help? Yes, given the right circumstances," said Mitchell L. Lathrop, an attorney with Duane Morris L.L.P. in San Diego, referring to workplace arbitration agreements.

Houston-based Halliburton Co. is one company that has had great success with its mandatory workplace ADR program.

Under Halliburton's dispute resolution program, which it implemented a decade ago, four options are provided: an open-door policy, under which an employee may speak to his or her immediate supervisor or to a higher-level manager in the chain of command; a conference, which permits an employee to meet with a company representative from the DRP office to talk about their dispute and to choose a method for resolving it; formal mediation; and formal arbitration.

Everyone working for Halliburton is covered by the DRP except those working outside the United States and those covered by collective bargaining agreements. All U.S. employees are automatically covered by the program upon acceptance of employment; no employee signature is required.

An employee who accepts or continues employment at Halliburton, by accepting compensation for employment, agrees to resolve all legal claims against Halliburton through this process rather than through the court system.

"We had a sexual harassment case in Houston in 1992 that took five years to get to trial, and we spent about $400,000 in legal fees to win," said William L. Bedman, Halliburton's assistant general counsel for human resources. Despite being vindicated, "we realized at the end of the trial that the only people who really won were the defense lawyers. It just didn't seem that $400,000 in five years was the best way to invest shareholders' money," Mr. Bedman said.

After implementing its mandatory ADR program the next year, the company has saved both time and money.

In the first 10 years of the program, about 7,700 disputes were handled, Mr. Bedman said. Of those, about 90% got resolved within the company, and the remaining 10% were resolved through mediation or arbitration. And of the 593 cases brought in 2003, 66% were resolved within one week and 83% were resolved within four weeks, he said.

And, whereas "in some years we would spend as much as $10 million in outside defense costs, most of the time now it's way less than that, by a couple orders of magnitude," Mr. Bedman said.

The advantages of ADR "are cost, speed and, to a slightly lesser degree, the expertise of the decision-makers," said Michael P. Foradas, a partner with the law firm of Kirkland & Ellis L.L.P. in Chicago. The main downsides, from an employer's perspective, are less expansive appeals rights, the fact that ADR resolutions do not set precedent and, in some cases, cost, Mr. Foradas said.

Arbitrations involve fees and arbitrator expenses that can, in certain circumstances, be as expensive as litigation.

According to the Washington-based American Arbitration Assn., 700 to 800 employees use the organization to administer mandatory workplace ADR programs, and that figure has stayed relatively constant over the last several years, said Robert E. Meade, senior vp.

In speculating about why there hasn't been more growth in the programs, Mr. Meade suggested that there is a prevailing belief among employers that mandating arbitration makes it easier for individuals to file complaints.

Employment lawyers also point out that multistate employers can be deterred by varying court opinions regarding the fairness and enforceability of arbitration requirements.

For example, last year the 3rd U.S. Circuit Court of Appeals-which has jurisdiction over Delaware, New Jersey and Pennsylvania-struck down a heavy equipment operator's arbitration agreement. The employer's agreement, among other things, included a 30-day time limit for an employee to present a claim.

In 2002, though, the Texas Supreme Court upheld Halliburton's arbitration program, ruling it was enforceable under state law.

"Most employers would love (mandatory arbitration agreements) to be valid alternatives to litigation," said Sarah A. Kelly, a member of the law firm of Cozen O'Connor in Philadelphia. Generally, though, "there is too much uncertainty about the enforceability of arbitration agreements. It's difficult for an employer-especially for an employer with operations in more than one state-to be certain that the agreement will be enforced," Ms. Kelly said.

"The administrative ease, the cutdown on discovery and all the things that were viewed to be abusive in litigation and caused employers to favor workplace arbitration, the tide is turning a little bit," said Gerald L. Maatman Jr., an employment attorney with Seyfarth Shaw in Chicago.

"Some (employers) are saying, `Gee, I'd rather take my chances in court, because, at the end of the day, I have to jump through so many hoops to satisfy the case law in what's a fair agreement that it's almost not worth it'-especially when balanced against the issue of `I'm stuck with any decision by an arbitrator,"' he said.

For Louisville, Colo.-based Storage Technology Corp., the decision not to implement mandatory ADR for workplace disputes was a philosophical one.

"There really is a speedup of a resolution, but our human resources department, in conjunction with our legal department, really looked at it and decided it just wasn't the right thing for our employees," said Sherry Pixler, StorageTek's risk manager.

"In thinking about the rights of the employee, they didn't even want to give the feeling that they might be signing any of their rights away," Ms. Pixler said.