A grievance is a complaint by an employee or a group of employees about an alleged violation, misinterpretation, or inequitable application of a union contract or, in a nonunion environment, any personnel policies or rules or regulations. A grievance procedure is a way of attempting to solve such disputes.
In a unionized workplace, the handling of employee grievances is regulated by the terms of the collective bargaining agreement. However, even in a nonunion workplace, grievances can be subject to regulation under the National Labor Relations Act (NLRA).
As an effective way to control legal costs and to stem the proliferation of employee lawsuits, many employers have taken an interest in the various methods of Alternative Dispute Resolution (ADR). Among the more common forms of ADR are mediation and arbitration. Many states have arbitration and/or mediation statutes. In situations in which it applies, the Federal Arbitration Act (FAA) preempts contrary state laws that limit or bar agreements to arbitrate. The United States Supreme Court has ruled that the FAA also preempts state law that would give jurisdiction to a court or agency rather than to the arbitrator (Preston v. Ferrer, 128 S.Ct. 978 (2008)).