1、Arbitration: History, Theory, Rationale, Legal Status,Definitions,Arbitration A procedure under which a neutral third party or some other neutral body or entity resolves a dispute Commercial Arbitration Used to resolve commercial disputes Employment Arbitration Resolves individual employment dispute
2、s Individual employment contracts Corporate policies Statutory Disputes Labor Arbitration,Labor Arbitration,Two Types Interest or Contract Arbitration Resolves disputes over the terms and conditions of employment to be included in a collective bargaining agreement Rights or Grievance Arbitration Res
3、olves disputes over the interpretation of an existing collective bargaining agreement,Other Labor Dispute Resolution Procedures,Negotiation Public and private sectors Mediation Public and private sectors May be mandated Fact-Finding Public sector,Digression: Alternative Dispute Resolution (ADR),Usua
4、lly discussed in the context of employment disputes Any method of resolving an employment dispute that does not use the legal system (administrative agencies and courts) Mediation Arbitration,History in the U.S.,1871Pennsylvania anthracite mine dispute settled by a judge after both parties agreed to
5、 submit dispute to him and be bound by his decision Issues Worker interference with production Owner discharge of workers 1874 Ohio coal dispute, owners refused to abide by decision,History in the U.S. (cont.),1886 Southwestern railroad refused to submit to arbitration of strike 1894 Congress of Ind
6、ustrial Conciliation and Arbitration Reps from labor, management and government Interest in promoting industrial peace 1902-03 United States Strike Commission appointed by President T. Roosevelt issued an award than ended a five-month anthracite strike Put in place an arbitration system that continu
7、es, in modified form, today,History in the U.S. (continued),Railroads Arbitration Act of 1888 Passed after rail strikes in early 1880s Voluntary submission to arbitration Presidential investigation Invoked in 1894 for rail car manufacturing strike Erdman Act of 1898 1898-1905 did not work because em
8、ployers refused to abide by award 1906-13 disputes settled without strikes because of growing strength of railroad brotherhoods Newlands Act of 1913 Enacted when parties disagreed over composition of Erdman boards Worked until 1918 when unions refused to submit 8-hour demands to arbitration,History
9、in the U.S. (cont.),Railway Labor Act 1926 enactment 1934 amendment Arbitration provisions National Railroad Adjustment Board to resolve grievances National Mediation Board addresses disputes over the terms and conditions in a collective bargaining agreement,History (cont.),Printing Industry Arbitra
10、tion of wage dispute between publishers and Typographical Union in 1901 Local Boards with appeal to a national board Apparel Industry Protocol of Peace in NYC cloak and suit industry in 1910 Board of Grievances and Board of Arbitration Ended in 1916 with a strike in NYC,History (cont.),Apparel Indus
11、try (cont.) Other branches and cities copied it Led to other models later on Hart, Schaffner, Marx Board of Arbitration in Chicago in 1911 Millinery industry in New York in 1915 Hosiery in the lat 1920s Mediation model Entertainment (amusement) industry in 1920s Actors Equity Directors Guild,History
12、 (cont.),Government U.S. Department of Labor created Conciliation Service in 1913 Mediation Arbitrator selection Two unsuccessful labor-management conferences during WWI,Modern CB System,Wagner Act Agreements needed interpretation Arbitration to resolve disputes In 1941, 62% of 1200 agreements in co
13、nciliation service file included arbitration to settle disputes over the interpretation of the contract GM and UAW created the Office of the Umpire (permanent),Summary through 1941,Arbitration an acceptable, if not a frequent manner of resolving labor disputes In some industries Until Wagner Act and
14、 modern U.S CB system, primarily to resolve disputes over wages and the outcome of bargaining After Wagner Act, to resolve disputes over existing TCE,World War II and Development of Modern Labor Arbitration,Wartime labor relations Tripartite (labor, management, public) War Labor Board (WLB) Wage and
15、 price controls Subject to approval by government Strike substitutes During negotiations wage controls During contract grievance procedures Imposed on parties by WLB,Arbitration and WLB,WLB required parties to include grievance and arbitration procedures in collective agreements as a means of avoidi
16、ng strikes over disputes regarding contract interpretation Encouraged development of arbitration techniques Made distinction between Interests (writing a contract) Rights (interpreting an existing contract) Established a cadre of arbitrators,Grievance Arbitration,A substitute for industrial conflict
17、 over disputes regarding the interpretation of existing collective agreements Final and binding Contracts for a fixed term The stakes for any individual grievance usually not that great A voluntary process incorporated into collective bargaining agreements,What Did Arbitration Do?,It resolved the di
18、spute through a voluntary procedure No work stoppage Production continued “throw it over the wall”,Labor Arbitration Infrastructure,Appointing Agencies American Arbitration Association, www.adr.org Federal Mediation and Conciliation Service, http:/www.fmcs.gov/internet/ State Agencies Michigan Burea
19、u of Employment Relations, http:/www.michigan.gov/dleg/0,1607,7-154-10576_17485-,00.htmlMaintain Arbitrator lists or rosters Rules for Cases,How Voluntary?,Section 301(a) of LMRA. “Suits for violation of contracts between an employer and a labor organization representing employees in an industry aff
20、ecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.“,Textile Workers Union
21、v. Lincoln Mills (1957),Section 301 may be used to create a federal arbitration law It is not simply a provision that permits federal courts to decide cases under other laws,22,Steelworkers v. American Mfg., 363 U.S. 564, 46 LRRM 2414 (1960); Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 46
22、 LRRM 2416 (1960),Courts must not determine the merits of a grievance to be done by arbitrator (per parties agreement) courts may not go beyond “arbitrability” by deciding on merits one question for court: is this a dispute over a matter that the parties have agreed to arbitrate? (is the case arbitr
23、able?; see AT&T Technologies v. Comm. Workers, U.S. Supreme Court, 1986) What did the parties agree to arbitrate? resolve doubts in favor of arbitrability Is it absolutely clear that this is a matter that the parties have agreed will not be subject to the grievance procedure and arbitrated? If not,
24、must arbitrate. In general, matters of arbitrability left to the arbitrator by voluntary action of parties,Grievance arbitration is always voluntary,There is no law that requires the private sector parties to Include grievance procedure in their collective bargaining agreement Arbitrate a grievance.
25、 Statutory Policy, Section 203 (d) of LMRA “Final adjustment by a method agreed upon by the parties is declared to be the desirable method for settlement of grievance disputes arising over the application or interpretation of an existing collective-bargaining agreement.”,24,Compare Commercial and La
26、bor Arbitration,Commercial Arbitration a substitute for litigation associated with a breakdown of a relationship,Labor Arbitration a substitute for a strike or a lockout part of a CB process implies the relationship is working Part of a “continuing relationship”,25,Concept of a Collective Agreement,
27、Creates a governance system “system of industrial self-government” “ a generalized code to cover a myriad of cases which the draftsmen cannot anticipate” More than a system of rights and obligations,26,Enterprise Wheel and Car., 363 U.S. 593, 46 LRRM 2423 (1960),Courts have a narrow scope of review
28、of arbitration awards did the arbitrator interpret and apply the collective agreement? award must draw its “essence” from the agreement Ambiguity does not warrant vacating an award arbitrators have no authority to provide reasons for their awards ambiguity may necessitate a remand,Paperworkers v. Mi
29、sco, 484 U.S. 29, 126 LRRM 2313 (1987),Courts not authorized to reconsider the merits of an arbitration award parties bargained for arbitrators judgment and remedy (even if it is “wrong”) decision must be based on the CBA pref. for private resolution of labor disputes (Sec. 203) affirmation of Enter
30、prise Wheel & Car Public Policy Issues awards against public policy may be vacated “public policy” must be based on legal precedents and decisions no “general considerations of supposed public interest”,28,Collyer Insulated Wire , 192 NLRB 837, 77 LRRM 1931 (1971),Board does not abandon its statutor
31、y authority by deferring to grievance procedure and arbitration where dispute arises from contractthere is machinery in contract to resolve dispute Furthers statutory policy of encouraging parties to resolve own disputes Sec. 203(d) of LMRA,29,Collyer (cont.),Collyer criteria for pre-arbitral deferr
32、al (under what circumstances will the Board defer a case to arbitration?) non-repudiation of CBK willingness to arbitrate/dispute must arbitrable dispute must center on CBK Spielberg (1955)/Olin (1984) criteria for post-arbitral deference to award (what will the Board consider in deciding to defer t
33、o the arbitrators decision after it is issued?) UFLP and contractual issues basically the same UFLP issue presented to and considered by arbitrator procedures fair and regular all parties agreed to be bound result not “clearly repugnant” to Act (Spielberg)/not “palpably wrong” (Olin),30,Collyer (con
34、t.),Scope of Deferral 8(a)(5)/8(b)(3) cases Collyer involves interpretation of parties rights 8(a)(3)/8(b)(1) cases deferral - National Radio (1972) no deferral - General American Transportation (1977) deferral - United Technologies (1984) Involves interpretation of individual rights,Interest Arbitr
35、ation,Widely used in the public sector as a strike substitute23 states and DC use arbitration as a substitute for a strike to resolve public sector disputes over terms and conditions for at least some public employee groups,Private Sector,Always voluntary Basic steel industry Employee Free Choice Ac
36、t,33,Current Bill,Advocated by unions, opposed by employers Employee Free Choice Act Certification without elections if a majority of employees sign authorization First contract mediation and arbitration Priority handling to discharge cases EFCA Link,Opposition to Interest Arbitration,Employers gene
37、rally do not want to cede contract writing authority to arbitrators who are not responsible for the business “Randel Johnson, vice president of labor policy for the Chamber, said he thinks unions proposed an outrageous bill in order to win a lesser compromise that would still be a big victory for la
38、bor. But he added, any combination that still leaves the binding-arbitration in there would still be unacceptable to the business community.“ Wall Street Journal, November 6, 2008.,Other Comments,“Congress should also protect the right of workers and employers to bargain freely. Binding arbitration
39、means that unaccountable and unknowledgeable government bureaucrats would impose employment contracts on newly organized companies. Workers would not have the option of voting down the contract, and companies would have no recourse if an arbitrator imposed uncompetitive terms that would drive it int
40、o bankruptcy. Congress should not let the government impose wage controls throughout the economy.” Heritage Foundation, Heritage Foundation Weblink. See also EFCA Arbitration Comments,Basic Theory of Labor Arbitration and Arbitration in Collective Bargaining,A substitute for the right to strike or l
41、ockout Over grievances rights/grievance arbitration Over establishing TCE interest/contract arbitration,Factors in Acceptability/Success of Labor Arbitration in U.S.,Neutrality The system is fair Arbitrators chosen by parties Informal and relatively (compared to courts) inexpensive Limitation in Sco
42、pe Arbitrators limited to narrow issues and CBA interpretation Minimal chance of “harm” to parties “Functus Officio” authority generally ends with issuance of award Finality Scope of judicial review narrow Infrastructure Appointing agencies National Academy of Arbitrators Rules,Employment Arbitratio
43、n,A substitute for litigation Two important Supreme Court cases Gilmer v. Interstate/Johnson Lane Corp. (1991) An employee who signs an agreement to arbitrate an claims arising out of employment may be required to arbitrate a claim of age discrimination Agreement to arbitrate voluntary No evidence t
44、hat arbitration panel would have been biased or incompetent to consider the ADEA claim Nothing in ADEA precludes considering the statutory claim through voluntary arbitration,Employment Arbitration (cont.),Circuit City Stores v. Adams (2001) FAA enforceability applies to most contracts of employment
45、 Federal Arbitration Act exclusion from coverage of “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” is limited to only such transportation workers Court relies on statutory construction rule of ejusdem generis: “where general words follow specific words in a statutory enumeration, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words.”,
