(a) (1) After a state agency hearing pursuant to a grievance filed by an employee and before an appeal to the Office of Personnel Management, a party may file a request for nonbinding mediation to resolve the issue raised by the grievance if the grievance concerns an allegation that the employee has been:

(A) Terminated;

(B) Demoted;

(C) Suspended for fourteen (14) or more days; or

(D) (i) Subject to adverse action by his or her state agency for:

(a) Communicating in good faith to an appropriate authority:

(1) The existence of waste of public funds, property, or manpower, including federal funds, property, or manpower administered or controlled by a public employer; or

(2) A violation or suspected violation of a law, rule, or regulation adopted under the laws of this state or a political subdivision of the state;

(b) Participating or giving information in an investigation, hearing, court proceeding, legislative or other inquiry, or in any form of administrative review;

(c) Objecting or refusing to carry out a directive that the employee reasonably believes violates a law, rule, or regulation adopted under the authority of the laws of the state or a political subdivision of the state; or

(d) Reporting a loss of public funds under § 25-1-124.

(ii) An employee agreeing to nonbinding mediation under this subdivision (a)(1)(D) does not waive his or her right to file a claim under the Arkansas Whistle-Blower Act, § 21-1-601 et seq.

(2) Notice of the request for nonbinding mediation shall be filed by the party requesting the nonbinding mediation for the grievance with the Office of Personnel Management no later than fifteen (15) business days after the grievance hearing or state agency decision.

(b) (1) The Office of Personnel Management shall:

(A) Maintain a roster of qualified mediators; and

(B) Provide by rule for the minimum qualifications of mediators.

(2) A mediator shall:

(A) Be a mediator from the Office of Personnel Management's roster of qualified mediators;

(B) Be certified in mediation by the Arkansas Alternative Dispute Resolution Commission;

(C) Not be employed by the state agency that is a party to the nonbinding mediation;

(D) Have a background in employer and employee relations; and

(E) Not be required to be an attorney.

(c) (1) (A) The nonbinding mediation may be resolved by the agreement of the parties.

(B) If the parties reach a resolution in the nonbinding mediation, the director of the state agency that is a party to the nonbinding mediation shall report the resolution in writing to the Office of Personnel Management, and the matter shall be considered resolved and final.

(2) (A) If there is no resolution after the nonbinding mediation:

(i) A party may file an appeal with the Office of Personnel Management within ten (10) business days of the mediation; and

(ii) The mediator shall report within ten (10) business days of the nonbinding mediation his or her suggested resolution to the Director of the Department of Finance and Administration.

(B) In determining the proposed resolution, the mediator shall consider:

(i) What action, if any, is in the best interests of the efficient administration of the state agency;

(ii) Whether the state agency's decision is supported by:

(a) Substantial evidence, if the action was based on an employee's unacceptable performance; or

(b) A preponderance of the evidence, if the action was based on factors other than an employee's unacceptable performance; and

(iii) Whether the employee shows:

(a) Harmful error in the state agency's procedures in arriving at the decision;

(b) That the decision was based on a prohibited personnel practice; or

(c) That the decision was not in accordance with the law.

(d) A party to nonbinding mediation under this subchapter may be represented by an attorney or other representative in proceedings before a mediator selected to hear the nonbinding mediation.

(e) The nonbinding mediation shall be conducted within forty-five (45) days of the request for mediation.