Labor Arbitration Law
Key principles and strategies to help you prepare and present a labor arbitration case
Your guide to the labor arbitration process – from the latest labor arbitration decisions to evolving labor relations practices and rules. Labor arbitration has been on the rise, and Bloomberg Law has the tools you need to successfully arbitrate disputes.
Navigate labor and employment law with confidence
From case law to expert analysis and news, Bloomberg Law has the tools and resources you need to confidently arbitrate labor disputes.
Labor arbitration laws exist at both the federal and state levels. They affect the rules and procedures governing the labor arbitration process, establish the rights of employees to engage in collective bargaining, and provide a legal framework for labor arbitration cases.
What is labor arbitration?
Labor arbitration is the process of resolving labor disputes by presenting arguments before a neutral party, the arbitrator, in a private adjudicatory setting instead of resorting to litigation. The parties to labor arbitration usually agree to a provision in their collective bargaining agreement (CBA) stating that the arbitrator’s decision will be final and binding. Arbitration is typically the last step for resolving a labor and employment law dispute that was first raised through the grievance procedure.
Arbitration differs from mediation or conciliation, processes usually initiated externally and which the parties can reject. In arbitration, parties are bound to certain obligations once they have decided to arbitrate.
Labor arbitration is governed by federal regulations, such as the Federal Arbitration Act (FAA) and the National Labor Relations Act (NLRA), as well as state and industry-specific regulations including the Railway Labor Act (RLA).
What’s the difference between labor arbitration and employment arbitration?
Disputes between individual employees and an employer are part of the employment arbitration process, while disputes between a labor union and an employer are part of the union arbitration process.
Labor arbitration law 101
Bloomberg Law’s Noah Jennings offers a refresher on labor arbitration, collective bargaining agreements, arbitration processes, types of disputes, and more.
What are the main types of labor arbitration?
Labor arbitration law covers two main types of disputes:
- Grievance or rights arbitration resolves disputes over the interpretation of a labor contract concerning individual workplace grievances such as discipline and discharge, seniority, or work assignments.
- Interest arbitration, also known as contract writing arbitration, resolves disputes over which proposed contract provisions should be included in a new contract. It’s used when negotiators involved in creating a new labor contract reach an impasse.
Grievance procedures
Grievance procedures in CBAs handle complaints concerning an alleged misinterpretation or misapplication of a contract or traditional work practice. An individual employee or a union usually initiates grievances. Grievances also can be initiated by employers, but this is a rare occurrence.
Procedures have become largely standardized: a typical provision establishes a method of initiating a grievance, a series of steps to be taken by supervisors and shop stewards through top management and union representatives, and a mechanism for referral to arbitration if the parties fail to resolve the grievance.
Some contracts place no limitation on disputes that can be taken up through the grievance process. Such broad contract language is generally favored by unions. Other contracts limit grievances to disputes involving the interpretation or application of the CBA. This type of approach is usually favored by employers.
However, some workplace issues – including representation issues, demands for modifications of contract terms, and unfair labor practices claims – aren’t grievances that can be processed through the grievance machinery, even under broad contract language.
Most common types of arbitrated disputes
In our most recent State of Practice Survey of law firm and in-house attorneys, 38% of respondents are currently involved in arbitration proceedings – mostly focused on breach of contract disputes. Of those involved in arbitration, a large majority (84%) work on 1-5 cases every year.
How to prepare and present a labor arbitration case
In any labor arbitration case, gathering evidence is crucial. An advocate needs to understand the case thoroughly to communicate it to the arbitrator. This checklist offers guidelines:
- Conduct a comprehensive investigation.
- Collect relevant documents. This could include employment contracts, emails, disciplinary records, witness statements, and pertinent policies.
- Study the contract to find clauses that directly or indirectly affect the dispute.
- Talk to anyone who might be able to help provide a full picture of the case, providing a strong factual foundation.
- Examine all records and documents that might be relevant to the case. Organize those you expect to use and make copies for the arbitrator and others.
- Visit the physical premises involved in the dispute to visualize what occurred.
- Carefully analyze the evidence to develop a compelling case theory that clearly identifies the violations or disputes at hand and constructs a persuasive narrative supporting your client’s position.
- In interest arbitration cases, collect and prepare economic and statistical data to aid the evaluation of the facts.
- Research the parties’ prior arbitration awards and the published awards of other parties to see how similar issues have been approached in the past.
- Prepare an outline of your case and discuss it with others in your group.
How to select an arbitrator
Labor arbitration is usually heard and decided by a single arbitrator. Some arbitration clauses designate a whole list of arbitrators. Parties can specify in their CBA how an arbitrator or an arbitrator list is selected.
Arbitration clauses might specify that – in instances where an employer and union can’t agree on selecting an arbitrator – parties will rotate among a group of arbitrators, or a neutral tribunal will oversee the selection process. Most CBAs designate the American Arbitration Association or the Federal Mediation and Conciliation Service as its neutral selection tribunal.
How long does labor arbitration take?
Most labor disputes are resolved within six months, according to the American Arbitration Association, but the length of the hearings varies depending on the complexity of the case, the number of witnesses, the volume of evidence, and the efficiency of the proceedings.
In some jurisdictions, there have been efforts to expedite arbitration procedures, especially when there are time-sensitive issues involved or industries where delays can have significant impact.
In some cases, to reduce the time and expense, parties can agree to use expedited procedures using a streamlined process with shorter deadlines.
Appealing a labor arbitration decision
Parties to a labor agreement usually stipulate in the agreement’s arbitration clause that arbitrator decisions will be final and binding on both parties. If both parties agree, the parties can appeal the case. An arbitrator would treat the appeal like a new case or may have an appeal procedure.
In the final case of the Steelworkers Trilogy, the U.S. Supreme Court held that courts should enforce an arbitrator’s award if the award draws its essence from the contract and the arbitrator was acting within the scope of their authority under the contract. A court may vacate an arbitrator’s award under other very limited circumstances, such as corruption, abuse of power, or other egregious conduct.
Track the latest developments in labor arbitration law with Bloomberg Law
Save valuable time when you trust Bloomberg Law Research Solutions for expert perspectives and insights into factors shaping today’s labor and employment law landscape. Download our State of Practice: Changing Rules and Regulations report for insights into how evolving regulations around key issues like union activity and arbitration are impacting the legal industry.
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