Labor Arbitration Law

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:

1. Conduct a comprehensive investigation.
2. Collect relevant documents. This could include employment contracts, emails, disciplinary records, witness statements, and pertinent policies.
3. Study the contract to find clauses that directly or indirectly affect the dispute.
4. Talk to anyone who might be able to help provide a full picture of the case, providing a strong factual foundation.
5. 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.
6. Visit the physical premises involved in the dispute to visualize what occurred.
7. 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.
8. In interest arbitration cases, collect and prepare economic and statistical data to aid the evaluation of the facts.
9. Research the parties’ prior arbitration awards and the published awards of other parties to see how similar issues have been approached in the past.
10. 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.

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.