General Overview of Arbitration

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What is Arbitration?

Means to resolve disputes outside of court

Labor and Management present evidence

Arbitrator makes final and binding ruling

Arbitration is different from mediation

Arbitration Uses

Commercial Arbitration: long used as substitute for court actions

International Arbitration: used as settlement of differences between nations

Labor Arbitration: began during late 19th century

Labor Arbitration advance rapidly after U.S. became involved in World War II

Simple Mechanics of Arbitration

Arbitration authorized by Collective Bargaining Agreement (CBA)

Parties select arbitrator

Arbitrator and parties set hearing date

Hearing Held

Decision

Final and Binding Award

Enforcement

Aristotle’s Quote About Arbitration

“For an arbitrator goes by equity of a case, a judge by the law, and arbitration was invented with the express purpose of securing full power for equity”

Image of Aristotle

Chief Justice Warren E. Burger

Quote:

“I cannot emphasize too strongly to those in business and in industry…that every private contract of real consequence to the parties ought to be treated as ‘candidate’ for binding arbitration”

Chief Justice Warren E. Burger

Served on Supreme Court 1969 to 1986

Voluntary Arbitration Use

Voluntary form of arbitration terms Private Commercial Contractual

Example Industries using voluntary arbitration Maritime Securities Labor Medical Construction

George Washington’s Will

“ I hope, and trust, that no disputes will arise concerning them;…..my will and direction expressly is, that all disputes shall be decided by three impartial and intelligent men, known for their probity and good understanding…and such decision is, to all intents and purposes to be binding on the parties as if it had been given in the Supreme Court of the United States.”

Courts and Arbitration

Courts originally did not favor arbitration

Most state and federal courts now support arbitration

Routinely enforce arbitration awards

Federal Arbitration Act and State Acts enhanced support

Courts accept arbitration as alternative to litigation

Procedures

Arbitration not required to follow court procedures

Court may compel a refusing party to arbitrate

Arbitration usually coordinated by an agency

Agency coordinates various procedural activities

Process

•Process design determined by parties

•Use of Administrative Agency Rules

•Pre-hearing conference agenda

Arbitration Setting

Same look and feel of court trial

Opening statements

Introduction of evidence

Witness testimony

Arbitrator more active role

Hearings are usually private

Timeliness

Parties may make arbitration relatively quick and inexpensive compared to litigation

However, bulk of arbitration cases requires several weeks or months

Arbitration issues are becoming increasingly complex

Time requirements increase with complexity

Parties and/or selected arbitrator may not be readily available

Nonetheless Arbitration is speedier than litigation

Arbitration Costs

•Arbitrator fees can add up

•Multiple Days of hearing are expensive

•Arbitrator’s expenses for travel, meals and lodging

Grievance Mediation

Hybrid variation between mediation and arbitration

Advanced in recent years because perception that arbitration is excessively delayed, expensive, or formalistic

Occurs after final step – prior to arbitration

Mediator may not act as arbitrator

Mediation discussion may not be used in arbitration

Common practice in the public sector

Advantages Arbitration Over Litigation

Court costly, prolonged and technical procedures of courts not well adapted to labor-mgt. relations

Courts are not often versed in labor relation problems

Supreme Court stated in the Steelworkers case:

“The labor arbitrator performs functions which are not normal to the courts; the considerations which help him fashion judgments may indeed be foreign to the competence of the courts”.

Other Arbitration Considerations

Prompt compliance with the award obtained in most cases

Court actions seeking compliance or vacation of award is infrequent

Discovery rights, attorney fees, punitive damages and supervised equity relief are typically unavailable

Lack precedential value in development of the law of collective bargaining

Faulty final and binding decisions may not be subject to review as are trial judge decisions

Labor Arbitration Observation

Arbitration….is a school, an arena, a theatre. Everyone both participates and observes. The whole company of actors-arbitrator, union and employer officials, the…[grievant], and the witnesses (mostly employees)—sits at one table. Argument, assertion, testimony, charge and countercharge, even angry abuse-sometimes spontaneous, sometimes “for the record” –flow freely in quick continuous intercourse. The arbitrator may let the discussion takes its head for a moment, then rein it in; an occasional question, a request for clarification……

Labor Arbitration and the Individual Worker

Jaffe, Annals of The American Academy of Political and Social Science 34, 40-41 (May 1953)

Arbitration - Substitute

To consider… arbitration as a substitute for court litigation or as the consideration for a n0-strike pledge is to take a foreshortened view of it. In a sense it is a substitute for both—but in the sense in which a transport airplane is a substitute for a stagecoach. The arbitration is an integral part of the system of self-government. And the system is designed to aid management in its quest for efficiency, to assist union leadership in its participation in the enterprise, and to secure justice for the employees.

Shulman, Reason, Contract, and Law in Labor Relations, 68 Harv. L. Rev.999, 1024 (1955)

Conclusion

Next Lesson: Examine the Rules of the Road as a Union Advocate

Read Chapter 1 of the Union Steward’s Guide Textbook

Be sure to take this lesson’s practice quiz, read the case study, complete the assignments, and participate in the forum.