Arbitration and Labor Disputes

• Labor disputes are inherent in business because workers can organize, and engage in collective bargaining.

• These disputes can arise from labor's and capital's drive for a "fair share" industrial production.

• To reduce production stoppages, society and disputants use arbitration.

• Arthur J. Goldberg highlighted arbitration as national policy

  • He cited The United States Arbitration Act
  • He cited The Labour Management Relations Act
  • He cited numerous state statutes
  • He highlighted legislative bodies favor voluntary arbitration
  • Peaceful, prompt, and just disposition of controversies involving citizens are key

• Joseph A. Jenkins, a member of the NLRB, called arbitrators "peacemakers"

  • Arbitrators can contribute more to maintaining good relations between conflicting societal forces beyond public or private groups

Arbitration Defined—Historical Background

• Arbitration is voluntarily choosing dispute resolution

• It is a simple proceeding

• An impartial judge of their own mutual selection determines the case

• Decision based on the merits

• Parties agree in advance the decision is final and binding

• Submission of disputes is compulsory by law

• Voluntarily agreeing to arbitrate differences becomes obligatory

• Arbitration will only begin at the wish of at least one party

• Arbitration predates English common law

• One court called arbitration the oldest known method to settle disputes between people

• King Solomon was an arbitrator

  • His methods aligned with those used by arbitrators today

• Phillip II of Macedon used arbitration in peace treaties with southern Greece (~338-337 B.C.)

  • Used for disputes "between members over vexed territory"

• George Washington was a staunch believer in arbitration

  • He specified arbitration in his will resolving intent disputes
  • His will stated disputes would be decided by three impartial, intelligent, and honest men
  • Two are chosen by the disputants
  • Those two choose a third
  • The three, unfettered by law, declare the testator's intention
  • The decision is as binding as the Supreme Court

• Commercial arbitration resolves disputes between businessmen instead of court action

• International arbitration settlement removes differences between nations that might lead to war

• Labor arbitration in the U.S. developed in the late 19th century, advancing rapidly post-World War II

Collective Bargaining, Mediation, Fact-Finding, and Arbitration

• Distinguishing the relationships is more clear when regarding labor and management

• Collective bargaining is the first stage, with bargaining the last

• Conciliation, mediation, and fact-finding occupy intermediate stages

• Negotiation may be aided by conciliation/mediation

  • Conciliation lacks a third party
  • Mediation has it
  • The terms are interchangeable

• Mediation/conciliation necessitates compromise, and the mediator doesn't decide, instead aiming for voluntary agreement

• Fact-finding resolves labor-management disputes

  • A fact-finding board investigates and reports
  • Strikes/lockouts are banned until this happens
  • No change happens without consent of parties, prohibited during cooling-off period
  • Fact-finders investigate and assemble all dispute facts
  • Reports may include recommendations, excluding LMRA §§ 206-210 emergency dispute provisions
  • Unlike arbitrators' findings, disputants choose to accept/reject

• Arbitration necessitates acceptance of the decision as final and binding for parties

• Arbitration is adjudication, not compromise

• Arbitration occurs after conciliation/mediation (and fact-finding) fail

Grievance Mediation

• To settle situations in which arbitration is seen as delayed, expensive, or formalistic, mediation crosses with arbitration as a solution

• After the final step of the internal grievance procedure, unresolved grievances that proceed to mediation before arbitration

• Arbitration is saved for grievances unable to be resolved through mediation

• The mediator cannot act as the arbitrator, and nothing said/done in proceedings is admissible in arbitration.

• The process is tested positively during an experiment that produced positive results lasting two and one-half years in the bituminous coal industry

• Success in resolving disputes led to extending the process for unorganized employees' protection

  • National Conference of Commissioners on Uniform State Laws drafted the Uniform Employment Termination Act
  • Allows nonunion employees to demand discharge arbitration

• Arbitration also has a place in public-sector bargaining

  • With the expansion of collective bargaining in the public sector, state statutes were made for the use of mediation, fact-finding, and interest arbitration
  • This was made to resolve contract negotiation impasses
  • Constitutionality has had limited success
  • Statutes constrain an arbitrator's power to set economic issues

Arbitration as a Substitute for Work Stoppages

• The habitual willingness of civilized men and nations to submit their differences of opinion to a factual test defines the difference between civilization and savagery

• Presenting reasons instead of arms is seen as a mark of civilization

• Industrial peace requires cultivation; conciliation, mediation, and voluntary arbitration are marks of civilization

  • Enemies to distrust and force
  • Does away with the fang and the claw

• Settling labor disputes on rights should maximize judicial methods instead of strikes/lockouts based on societal rules and standards of orderly social behavior

• Voluntary arbitration settles labor-management differences without resorting to strikes/lockouts

• According to the U.S. Supreme Court, arbitration serves in the place of industrial strife

• The right to strike in the U.S. is an essential economic freedom, subject to potential abuse

• Strikes/lockouts happen due of inability/unwillingness to recede from an irrevocably taken position

• Arbitration assumes the arbitrator can see the issue objectively, expecting reasonable outcome based on true merits

• Arbitration effects complete surrender of any right of the employer by unilateral action

  • They relinquish any right of both parties that contentions support by a show of economic strength
  • This can be a basis of mistrust in arbitration

• Management sees it as judgment substitutions, while labor sees it as giving up freedom to strike

• Understanding of an outsider could prove not so understanding, involves too much risk according to labor

• Parties have chances to present views, and outsiders hold decisional responsibilities in a court of law that answers fears

• Grievance procedure contracts bar strikes and lockouts over arbitrable issues

  • The U.S. Supreme Court believes there is a no-strike obligation on agreeing

• The U.S. Bureau of Labor Statistics July 1976 study reports 96% of collective bargaining agreements in important industries provide arbitration as the grievance machinery endpoint

• There was not a single reported major contract case that eliminated grievance arbitration during the widespread concession bargaining of the 1980s

• Absent union representation, arbitration can further the employer-employee relationship

  • Some provide impartial arbitration machinery for unorganized employee grievances
  • American Arbitration Association (AAA) has Employment Dispute Resolution Rules for use

• Contract interpretation disputes is overwhelmingly accepted but collective agreements with arbitration have hovered at 2% from 1949 to 1966

• The strike may be outmoded even for contract negotiation disputes

• Voluntary arbitration with proper safeguards is preferable

Advantages of Arbitration Over Litigation

• Arbitration claims special tribunal expertise, time-saving, expense reduction, and is trouble free

• Courts recognize parties to legally enforceable collective agreements, however, procedures are costly/prolonged

• Courts aren't adapted to labor-management Relations

• Arbitration is more satisfactory when "a speedy decision by men with a practical knowledge of the subject is desired"

• The U.S. Supreme Court views arbitration superior for resolving collective agreements disputes: -Labor arbitrators perform functions with considerations foreign to courts -Arbitrators consider effects on productivity, shop morale, and tension Arbitrators have specialized needs, the ablest judge cannot be similarly informed

• Parties to an industrial dispute "live with" the judgment or award rendered by the adjudicator

  • Courts lack labor relations problems expertise

• Some countries establish labor courts as part of their judicial system.

• European labor courts differ from tribunals

• labor courts don't offer a ready alternative

Arbitration of Public Employee Disputes

• There has been significant use among public employee disputes with the growth of employee organization and collective bargaining

• Federal and state employees are restricted from striking

• Neutral dispute settlement machinery is essential in the public sector with organizational and bargaining rights

• Most issues in public-sector arbitration don't differ from the private sector

• Arbitrators apply the same standards in both areas

• Principles/precedents from private-sector arbitration are often considered

• Public sector arbitration can influence private sector

Other Important Roles of Arbitration

• Arbitration has roles beyond a substitute for work stoppages

• it is much more than a substitute

• Harry Shulman declared arbitration: -Is not like court litigation -Is not in exchange for not striking -but in respect to transportation

• It is not for self-government and the system promotes efficiency -The system assists union leadership in participation in the enterprise -The system secures justice for the employees