Below is a list of organizations (both private and public) involved in the arbitration process.

Alternative Dispute Resolution Organizations

• American Arbitration Association (AAA): The AAA offers a wide range of services, including education and training, publications and the resolution of a wide range of disputes through mediation, arbitration, elections and other out-of-court settlement techniques.
• American Bar Association Section on Dispute Resolution: The Section’s website provides information on ABA ADR initiatives, including the Dispute Resolution Magazine and links to other ADR sites.
• Association for Conflict Resolution (ACR) ACR is a national professional association for mediators, arbitrators, educators and other conflict resolution practitioners.
• International Institute for Conflict Prevention & Resolution (CPR): CPR is an independent nonprofit organization that, for more than 35 years, has helped global businesses prevent and resolve commercial disputes effectively and efficiently. CPR’s membership consists of top corporations and law firms, academic and government institutions, and leading mediators and arbitrators around the world.

Government Agencies

• Association of Labor Relations Agencies: The ALRA’s website provides access to the websites of the labor relations agencies in the United States and Canada. The sites of the individual agencies in turn provide information about local bargaining laws, agency decisions and other useful information for anyone exploring the public sector collective bargaining process.
• Federal Mediation and Conciliation Service (FMCS): The FMCS provides arbitration and mediation services to industry, communities, and governmental agencies worldwide. Its mission is to improve labor-management relations, promote collective bargaining, and enhance organizational effectiveness.
• National Mediation Board: (NMB) provides mediation and arbitration services to transportation services engaged in interstate commerce, primarily railroads and airlines under the Railway Labor Act.

Labor arbitration in Canada entails both interest arbitration (setting the terms of a collective agreement) and grievance arbitration (interpreting a collective agreement). Interest arbitration is generally restricted to essential services such as police and firefighters, and to hospitals and nursing homes. However, there are some exceptions, such as for first contracts in certain instances, where parties mutually agree to interest arbitration or where a government may impose interest arbitration.

The framework for grievance arbitration is prescribed by law. Certain industries such as aviation and telecommunications are covered by federal legislation, while the vast majority of workplaces are covered by applicable provincial legislation. Common to this legislation is a prohibition on strikes or lockouts during the term of the collective agreements, with disputes arising during the term of a collective agreement to be resolved through grievance arbitration.

Arbitration in Canada takes various forms, with expedited processes and med-arb commonly prescribed by collective agreements. By statute, in certain instances, and on the basis of a number of judicial decisions, arbitrators in Canada generally have the ability to interpret and apply statutes in determining grievances. The result is a full and final resolution of any dispute arising under a collective agreement. Courts retain supervisory jurisdiction over the labour arbitration process; however, there is considerable deference given by the courts to the arbitrator in the judicial review process.

Mediation and arbitration both involve finding a resolution to a dispute (usually over the interpretation or application of a written contract) and involve a third party (an arbitrator or mediator). However, the method by which resolution is reached is completely different in arbitration and mediation.

In mediation:

• The parties (employer and union or other employee representative) to a labor-management dispute mutually select an impartial third party to help them reach agreement over a disputed issue or issues.
• The role of the mediator is to listen to the positions and interests of both parties, to make suggestions for resolution if appropriate, and to help them reach an agreement to which they can both commit.
• Mediation may be voluntary or imposed by state, provincial, or federal legislation. The mediator has no authority to force the parties to come to an agreement and cannot impose his or her version of a good resolution upon them. Any suggestion he or she makes about what would be the “best” solution for the dispute is not binding upon the parties.

In arbitration:

• The parties mutually select an impartial party to hear both parties’ positions and arguments, consider live witness (oral) testimony and documentary evidence if offered, and write an opinion and award resolving the issue in question.
• The parties to arbitration generally agree in advance that the resulting award will be final and binding upon them.
• Most collective bargaining agreements contain a specific provision that addresses the arbitration of disputes. Sometimes an arbitrator will try to mediate a dispute prior to moving to arbitration. In such circumstances he or she tries to get the parties to resolve the dispute on their own without having a decision imposed upon them.

Okay—we admit it. This is a trick question. An arbitrator is not on either side. The arbitrator is truly impartial and comes to a dispute ready to rule for either party. He or she will be guided to a decision grounded in the facts of the case and the contract in dispute. Parties almost always mutually choose the person or persons who is be the arbitrator based on her or his reputation for impartiality and fairness. The parties must mutually agree on the arbitrator.

In choosing an arbitrator the parties may directly contact the arbitrator. If they cannot agree, there are several administrative agencies, both public and private, that maintain lists or rosters of arbitrators. In labor-management arbitration the main agencies are the Federal Mediation and Conciliation Service (FMCS), the American Arbitration Association (AAA) and the National Mediation Board (NMB). Many states have agencies that also provide lists of possible arbitrators from which the parties can choose. Lists usually contain five or seven names (or any odd number). If the parties cannot agree on a name, they alternately strike names until only one arbitrator is left to serve.

To serve as an arbitrator on the FMCS, NMB, or AAA labor panels (for collective bargaining disputes), the arbitrator must be neutral in affiliation, meaning that she or he cannot represent management or labor in matters of collective bargaining. In this and other respects these administrative organizations along with the National Academy of Arbitrators are signatories to the “Code of Professional Responsibility for Arbitrators of Labor-Management Disputes.”

As a matter of clarity, the National Academy of Arbitrators does not provide lists of arbitrators to parties or in any other way market arbitrators. It is an organization with the purpose of creating professional standards and providing continuing education for its members and arbitration advocates.

Introduction

Some of the most commonly adjudicated issues in workplace arbitration are situations in which employees have been subjected to disciplinary action (e.g., fired or suspended).  To understand how arbitrators approach disciplinary cases, it is helpful to distinguish between cases involving organized (i.e., unionized) workplaces and cases where no collective bargaining agreement exists in the workplace.  This separation is necessary because collective bargaining agreements almost universally contain clauses specifying that employers can only discipline employees for ‘just cause.” A just cause standard affords employees certain protections and generally assures that they cannot be disciplined without notice, satisfactory proof of misconduct, and fair treatment. In a non-represented situation workers have much more limited opportunities to challenge employer-imposed discipline. Unrepresented workers generally are considered to be at-will employees and are usually subject to termination at the discretion of their employers, except for reasons prohibited by law.

Discipline and Discharge Under Collective Bargaining Agreements

It has been noted many times that protection from unjust treatment in the workplace may be the main motivation and benefit of working in a unionized setting. This protection is the result of a commonly-bargained clause in contracts that recognizes management’s right to run the business and to discipline or discharge employees but also provides that those actions must be for “just cause.”

“Just cause” is typically not defined in labor agreements. Collective bargaining contracts may have specific provisions stating that certain “cardinal offenses” such as theft will be considered just cause and, thus, grounds for immediate termination without warning. The broader meaning of “just cause,” however, can be gleaned from tens of thousands arbitration awards throughout the economy. Many authors and publications have attempted to condense those decisions into a definition, formula, or theory of just cause.

In its simplest form, just cause is a matter of fairness. First and foremost, there must be satisfactory proof that the employee engaged in the act upon which the discipline is based. For example, if the proof is insufficient that the employee actually committed a violation, discipline cannot stand. Arbitrators rarely apply a quantum of proof as stringent as the criminal standard of proof beyond a reasonable doubt, opting instead for a lesser standard such as requiring the employer to prove misconduct by clear and convincing evidence or by a preponderance of evidence.

If the evidence is sufficient to demonstrate that the employee is “guilty” of the conduct alleged, then the next question, generally speaking, relates to whether the penalty is for just cause. Disciplinary penalties can range from verbal warnings to termination. A variety of factors can influence whether the penalty imposed by the employer was proper, depending on the circumstances of each case. An analysis of just cause discipline can include the following questions:

• Is the rule reasonable?

• Was the rule clear about the employer’s expectations and the consequences of violating it?

• Did the employee have notice of the rule?

• Was the penalty reasonably related to the seriousness of the offense?

• Was the penalty consistent with discipline to other employees in similar circumstances?

• Is the violation mitigated by or aggravated by the past record of the employee?

“At Will” Employees

In terms of broad legal rights, at-will employees are subject to termination at any time for any reason (good, bad, or otherwise), except where the reason for discharge is inconsistent with a statutory right such as freedom from discrimination based on race or gender. The “at will” concept is based on the notion that absent a contract, an employee is free to end an employment relationship at anytime. Thus, employers are viewed as having the corresponding right.

With increasing frequency, some employers  require an employee as a pre-condition of employment to agree to submit any statutory claim about her or his employment to arbitration rather than pursuing that claim through administrative agencies or litigation.

These pre-dispute agreements recently have garnered much attention in legal circles and court actions. With reference to their fairness, critics view them as mandatory rather than voluntary. For example, legislation has been introduced in some states to outlaw “mandatory arbitration.”

Apart from employer-sponsored (or required) arbitration, employees who are terminated are typically left to challenge the action on the basis of a statutory right before an agency and/or through litigation. To address situations in which no statutory claim is advanced, however, some courts on a state-by-state basis have entertained and created exceptions to the at-will doctrine.

Although as compared to trials, arbitration is generally considered to be a less formal adjudicatory process, evidence plays a big role in the arbitration process. Below is a short description of some of the most commonly used terms relating to the use of evidence.

Best evidence is primary evidence, usually in the form of a writing, rather than secondary evidence or copies.

Circumstantial evidence involves facts that, when taken together, establish another fact by the circumstances and inferences drawn from the factual connections.

Cumulative evidence involves the repetitive presentation of testimony about the same matter.

Leading questions sometimes are used for preliminary matters on direct examination but most commonly are used on cross-examination.

Direct evidence is offered as proof of a fact without relying on any inference or presumption.

Documentary evidence is a writing or document offered as proof.

Expert witnesses with specialized knowledge, training, or experience generally are permitted to testify on the basis of their opinions.

Foundation refers to the preliminary facts required to demonstrate the authenticity of a document or the circumstances of testimonial recollections.

Hearsay evidence is a statement made outside of the arbitration hearing by a person other than the witness who is testifying. It is offered for the truth of the matter contained in the statement. At times, a hearsay statement may include silence as well as conduct. The hearsay rule is subject to many exceptions, such as those for business records and admissions by a party.

Materiality, which is closely related to relevance, concerns the degree of importance to the matter in dispute.

Opinion evidence involves the belief or impression of a witness about facts in a case.

Opinion testimony is in contrast to matters that are known personally to a witness through the physical senses, such as sight, smell, or hearing.

Objections to evidence are made by an advocate who takes issue with a line of questioning or the introduction of other evidentiary material into the evidentiary record of the hearing. Typical objections are that the testimony is irrelevant, speculative, or hearsay.

Parol evidence describes a verbal discussion or agreement that sheds light on the interpretation of a written agreement.

Relevant evidence tends to prove or disprove facts in a case.

While less formal than trials, arbitration practice involves the use of some specialized vocabulary. To assist the reader with understanding those terms, we have created a glossary of arbitration terms.

A

Adverse Witness

A representative of one party to an arbitration who is called as a witness by the opposing party, as when a grievant is called by an employer or a supervisor is called by a union. Being considered an adverse witness means that the cross- examination format can be used in asking questions, including the use of leading questions. Sometimes referred to as a hostile witness.

Advocate

A person representing the grievant(s) or the employer who presents the grievant’s or employer’s position, evidence, and arguments to an arbitrator. The advocate may be an attorney specializing in labor law but may also be a union representative (for the grievant) or labor relations specialist (for the employer).

Appeal

The act of taking an arbitration award to court with the goal of overturning or modifying the arbitrator’s decision. The judicial grounds for overturning an award are very limited but may include such questions as legality of the award, enforceability of the award, or impartiality of the arbitrator.

Affidavit

A written statement or declaration offered as a sworn document about a matter at issue. Arbitrators at times will permit the submission of an affidavit but almost never treat the statement alone as proof of the facts stated in the document.

Arbitrability

The arbitrator’s jurisdiction or authority to hear a case. Substantive arbitrability objections involve whether or not the subject matter of the dispute is within the scope of arbitration. Procedural arbitrability claims involve whether or not conditions have been satisfied for the arbitration to go forward. Substantive arbitrability objections typically are reserved for judicial determination unless a labor agreement or the parties in a specific case confer such authority on an arbitrator. A presumption of arbitrability often is imposed by the final decision maker. Procedural arbitrability objections usually involve issues of contractual time limits or other terms that are decided by an arbitrator, not a court. In some instances arbitrability issues are bifurcated for a decision to be rendered before the merits of the dispute are argued.

Arbitral Notice

When an arbitrator takes notice of statutes, case law, government regulations, or other facts of common and widespread knowledge whose accuracy is not reasonably subject to dispute. The party requesting notice be taken need not establish a formal evidentiary basis for the fact subject to notice. Also called judicial notice.

Arbitration

A method of dispute resolution provided by a collective bargaining agreement or other contract, typically with a final and binding decision to be rendered by an impartial decision maker known as an arbitrator. The predominant form of arbitration in labor matters is grievance arbitration, also known as rights arbitration. Another type is interest arbitration, which is used to resolve an impasse or deadlock during bargaining in the formation of a contract or one of its provisions. Arbitration that is not final and binding is known as advisory arbitration.

An arbitration decision includes an award setting forth the specific order of the arbitrator. When upheld in court, an award is confirmed. Under narrow circumstances an award may be vacated or overturned, often with a court deciding to remand the case to the arbitrator for further activity.

The arbitrator may be selected on an ad hoc or case-by-case basis. Or the arbitrator may be selected from a permanent panel of arbitrators agreed to by the parties to a labor agreement. Selections also can be made by parties striking names from a list transmitted by an administrative agency of provider organization such as the Federal Mediation and Conciliation Service or the American Arbitration Association.

Arbitration that is mutually adopted by the parties during collective bargaining differs from mandatory arbitration agreements demanded by some employers for their employees in non-union workplaces as an alternative to civil litigation.

B

Back pay

Wages required to be paid an employee upon an arbitrator’s finding that a discharge or layoff of an employee was not for just cause or was in violation of the employee’s contractual or statutory rights.

Bargaining unit

A grouping of employment positions or classifications that share a community of interest in a workplace. A bargaining unit is represented by a union in negotiations and during contract administration. The union that represents employees in a bargaining unit is known as the bargaining agent or exclusive representative.

Bench decision

An oral ruling rendered by an arbitrator after a hearing on an arbitrability issue or on the merits of the case.

Best evidence

Primary evidence, usually in the form of a writing, rather than secondary evidence or copies.

Bifurcation

Dividing a labor arbitration hearing to permit the separate consideration of arbitrability questions and the merits of the case. Bifurcation also may refer to separating the liability phase of a case from a subsequent determination of specific monetary amounts, as when a make-whole relief is awarded and the arbitrator retains jurisdiction over later disputes that emerge about financial calculations.

Brief

A written summary of facts and legal principles related to a dispute. A post- hearing brief often is used instead of a closing statement (or closing argument) at the conclusion of a hearing. Some parties also file briefs in lieu of opening statements at the outset of a hearing.

Bumping

A procedure permitting a worker subject to layoff, transfer, or other contractual action the right to displace a worker with less seniority.

Burdens

The burden of going forward refers to the party with the obligation to present evidence first on a matter in dispute. The phrase “burden of proof,” or “burden of persuasion,” refers to the ultimate obligation to demonstrate sufficient evidence borne by one of the parties. Burdens may apply to particular issues as well as to the case as a whole. In disputes involving contract interpretation the burden typically rests with the union as the grieving party. In contrast, in disciplinary matters the burdens of going forward and proof typically are assigned to the employer as the party altering the status quo. The allocation of burdens also applies to particular issues such as arbitrability and affirmative defenses (for example, the burden to demonstrate untimely grievances, negotiation waivers, disparate treatment, mitigation of damages, etc.).

C

Cease-and-desist order

A directive in an award requiring a party that violated a labor agreement to halt the offending practice in the future.

Charge

A written statement alleging an employee’s misconduct.

Circumstantial evidence

Evidence which involves facts that, when taken together, establish another fact by the circumstances and inferences drawn from the factual connections.

Class action

An action in which two or more employees with a common interest file a grievance on behalf of themselves and all similarly-situated employees.

Collateral estoppel

A doctrine barring evidence about a fact or issue that was subject to prior adjudication from being offered in a subsequent arbitration. This concept is similar to, but different from, res judicata, which involves a contention that the case (and dispute itself) has been the subject of previous resolution and cannot be tried anew. Both principles differ from double jeopardy, a concept borrowed from criminal law that precludes an employer from seeking to discipline an employee twice for the same misconduct.

Collective bargaining

The negotiation by an employer and a bargaining agent of terms and conditions of employment governing the members of a bargaining unit. When successful, their bargaining results in a collective bargaining agreement. In some industries multi-employer or multi-union (or coalition) bargaining is used, leading to a master agreement covering all affected parties. Master agreements may have local supplements for particular employers or geographic areas. In the public sectors the phrase meet and confer often refers to the negotiating process resulting in a memorandum of understanding (or MOU).

Concerted activity

Employee activity in association with others that usually involves union organizing, protesting employer conduct, or asserting other mutual aid and protection.

Consent award

An arbitration order agreed upon by the parties.

Cumulative evidence

Involves the repetitive presentation of testimony regarding the same matter.

D

Damages

A sum of money recovered to redress or make amends to a grievant for the wrong done. In most cases an arbitrator will award only such monies as make the wronged employee whole – i.e., place the employee in the financial position he/she would have been in but for the wrong done.

Deferral

A policy of the National Labor Relations Board and many public sector labor boards to delay administrative action until an arbitration is completed. An arbitrator’s decision then may be reviewed by a labor board to determine if it is repugnant or significantly at odds with labor relations law.

Demeanor

The physical attributes of a witness when testimony is being offered, including gestures, tone of voice, and general appearance. A witness’s demeanor may be a factor in assessing credibility, although these observations usually will not be determinative.

Deposition

The testimony of a witness taken outside the arbitration hearing before a person authorized to administer oaths.

Direct Evidence

Evidence is offered as proof of a fact without relying on any inference or presumption.

Direct examination

Questions posed to a witness who has been called by a party. Cross-examination involves questions posed by the party who did not call the witness. The initial round of witness testimony is followed by redirect or recross examination.

Disclosure responsibilities (or an arbitrator)

An arbitrator should be aware of any potential or perceived conflict of interest that may arise. Prior to accepting an appointment, an arbitrator must make the parties aware of any current or past relationship with any party involved in the arbitration, regardless of whether the nature of that relationship is professional or personal. Similarly, an arbitrator has an obligation to disclose any financial interest in the arbitration or with any party. If an arbitrator accepts an appointment and later becomes aware of a potential conflict of interest, disclosure must be made at that time. An arbitrator should disclose any circumstance that might reasonably raise a question as to the arbitrator’s impartiality.

Discovery

The formal process of gathering information or evidence prior to a hearing through depositions, requests for documents, written questions or interrogatories, and other methods. Although formal discovery is a common feature of civil litigation, it rarely is used in labor arbitration. In labor cases the parties usually rely on the exchange of information during grievance processing, supplemented by the use of subpoenas to secure additional evidence for the hearing.

Documentary evidence

Evidence which is presented in a writing or document offered as proof.

Due process

Procedural due process is an element of just cause and requires that before an employee may be disciplined, the employer must provide the employee with notice of the charges and an opportunity to be heard. The scope of protection is broader for employees in the public sector, but employees in the private sector are also generally thought to be entitled to due process protections. In addition, due process principles may protect an employee from double jeopardy and from interrogation by an employer without union representation when it is requested.

In an arbitration hearing due process means that each party must be given adequate notice of the date, time, and place of the hearing and the opportunity to present evidence and cross-examine the opposing party’s witnesses. Further, the arbitration award must be based on the evidence presented at the hearing.

Duty of fair representation

The obligation of a bargaining agent to represent bargaining unit employees fairly. Arbitrary, discriminatory, or bad faith conduct constitutes a breach of duty. The duty of fair representation applies to grievance arbitration or negotiation where the union is authorized to act on behalf of unit employees regardless of formal membership in a union.

E

Evidence

Testimony, writings, or other matters presented as proof at a hearing.

Exhibits

Documents, photos, or other tangible items offered as proof of facts at a hearing. Exhibit items typically are explained by testimony from a witness.

Ex parte communication

Contact by one party with an arbitrator that involves a discussion of the substance or merits of a case.

Expert witness

A witness with specialized knowledge, training, or experience. Expert witnesses are generally permitted to testify on the basis of their opinions.

F

“Fifth Amendment Rights” in arbitration

The Fifth Amendment to the United States Constitution protects citizens against self-incrimination in criminal trials. Not all arbitrators will extend this right to protect employees from discipline or termination.

Final and binding

A contractual agreement between parties submitting an issue to arbitration that once an award has been issued, its terms are final and binding upon both parties and may be overturned only on very limited grounds. If either party declines to abide by that award, the opposing party may seek enforcement of the award in a court of law.

Foundation

The term refers to the preliminary facts required to demonstrate the authenticity of a document or the circumstances of testimonial recollections.

Free speech

A constitutional protection that is the basis for employee and employer rights to express certain views. This right may in some cases be limited by legislation or by the nature of the speech – such as speech that harms the employer’s ability to do business or creates a hostile workplace for an employee.

Front pay

An amount of money awarded a wrongfully treated employee to make the employee whole for the loss of future work opportunities due to the employer’s wrongful treatment.

Functional link (or nexus)

Establishment by an employer that an employee’s on- or off-duty conduct likely would (or actually did) adversely impact the employer’s ability to conduct business. Such a nexus might arise if a uniformed railroad employee dining in a town’s restaurant stated loudly that the railroad going through town did not care about citizens’ safety along the right-of-way. It also could come into play if a disgruntled nurse gossiped negatively about a physician’s competence in front of the doctor’s own patient.

G

Grievance

A claim by a union or an individual that a term of the contract has been violated. In some settings an employer also can file a grievance. Grievances are processed through an internal grievance procedure that involves a multi-step process that precedes arbitration involving an outside arbitrator. In some industries a board of adjustment that includes representatives of both labor and management is convened before or instead of arbitration involving an impartial arbitrator.

Grievant (Grievor)

The individual employee protesting an employer’s actions. An employee may file a grievance on his/her own behalf, or the Union may file a grievance on behalf of an individual unless the collective bargaining agreement says otherwise. An arbitration also may involve more than one grievant protesting an employer’s action that impacts all of them.

H

Hearing

A proceeding before an arbitrator at which parties present evidence and argument prior to a decision. Principles of due process, or basic fairness, apply at hearings, including the right to attend the session, to challenge the claims at issue, to offer testimony and other evidence, and to cross-examine witnesses. Sometimes parties agree to have expedited hearings with limited advance notice, abbreviated testimony, and no post-hearing briefs.

Hearsay evidence

A statement made outside of the arbitration hearing by a person other than the witness who is testifying. It is offered for the truth of the matter contained in the statement. At times, a hearsay statement may include silence as well as conduct. The hearsay rule is subject to many exceptions, such as those for business records and admissions by a party.

Impasse

A situation arising in negotiating a collective bargaining agreement where the parties are unable to make further progress toward reaching an agreement.

Inferences

Logical factual assumptions drawn from direct and circumstantial evidence. This includes the drawings of adverse inferences when a party fails to explain or respond with evidence under its control, such as when a manager is not called as a witness to rebut a claim or when a business record relevant to the dispute is not produced at a hearing.

Injunction

An order of a court of equity to refrain from doing (negative injunction) or to do (affirmative or mandatory injunction) a specified act. Its use in labor disputes has been greatly restricted by the Norris-LaGuardia Act (1959).

Issue to be decided

Most often, the parties will stipulate (or agree) to the issue to be decided by the arbitrator. Otherwise, they may give the arbitrator the authority to formulate the issue, or it may be defined by their collective bargaining agreement. An arbitrator only has jurisdiction to decide the issue(s) raised by the parties at the hearing. Courts have vacated arbitration awards where an arbitrator has gone beyond the issue(s) presented by the parties.

J

Jurisdiction of the arbitrator

Authority or jurisdiction of an arbitrator to hear and decide a particular issue placed before him/her in an arbitration hearing. The jurisdiction of the arbitrator’s deliberation is frequently restricted to the issue presented in the original grievance. In other situations the arbitrator’s jurisdiction is limited to either (1) an issue or issues agreed to by the parties to the arbitration, or (2) the authority delegated to the arbitrator to frame the issue.

Just Cause

A phrase applied to assessing an employer’s rationale for disciplining an employee, including such issues as notice of rules, warning of discipline, fairness of the investigation, proof of actual misconduct, and appropriateness of the penalty. Similar terms are good cause, reasonable cause, and sufficient cause.

L

Laches

A doctrine from the law of equity holding that a party that unjustifiably delays acting on a right for an excessive period of time can lose the opportunity to go forward at a later date. Laches can be asserted even if a contractual time bar was not invoked in the past. It operates on the basis that witnesses with a clear recollection of the facts and pertinent evidence may no longer be available because of the delay in proceeding with a cause of action.

Last-chance agreement

A grievance settlement that allows an individual to return to work, usually without back pay, but specifies that dismissal will be the penalty for any further wrongdoing. Arbitrators sometimes include a proviso in an award stating that a reinstated employee is being given a last chance.

Leading question

Questions which often are used for preliminary matters on direct examination but most commonly are used on cross-examination.

M

Maintenance of standards

A contract provision preserving previous practices and benefits even if not expressly identified in a successor labor agreement.

Make-whole relief

A remedy providing back pay and benefits to an employee, often offset by interim earnings.

Management rights

A contract clause stating that certain rights are reserved to management unless otherwise specified in the bargaining agreement. Typically, management rights include the specification or assignment of work schedules, duties, job descriptions, operational methods, and production standards, for example.

Materiality

Refers to the degree of importance of a particular piece of evidence to the matter in dispute.

Mediation

A method of resolving labor disputes whereby a disinterested third party listens to the arguments of both the employer and the union and then suggests methods of reconciling the dispute. Unlike arbitration, the mediator’s proposed solutions are not binding on either party.

Mediation-arbitration (Med-arb)

A procedure agreed upon by the parties that authorizes the same individual to assist the parties in negotiating a settlement as a mediator and thereafter to function as an arbitrator to decide the dispute if a settlement is not reached.

O

Objections

Objections to evidence are made by an advocate who takes issue with a line of questioning or the introduction of other evidentiary material into the evidentiary record of the hearing. Typical objections are that the testimony is irrelevant, speculative, or hearsay.

Offer of proof

A narrative description of a proposed line of examination presented to an arbitrator when an advocate is seeking to introduce evidence that the opposing party believes is irrelevant. The summary preserves the record in the event the evidence is excluded, and an attempt later is made to overturn the award. The same term also applies when seeking to streamline the introduction of witness accounts by permitting a party to stipulate that a witness, if called, would testify consistent with the description set forth in the offer. A party accepting an offer of proof is not agreeing to the truth of the statement but only that the witness would say what is described in the offer if called to testify.

Opinion evidence/Opinion testimony

Opinion evidence involves the belief or impression of a witness about facts in a case. Opinion testimony is in contrast to matters that are known personally to a witness through the physical senses, such as sight, smell, or hearing.

P

Parol evidence

Describes a verbal discussion or agreement that sheds light on the interpretation of a written agreement.

Past practice

A policy or activity that is consistent, longstanding, known to, and accepted by the parties. Past practice evidence usually is offered to shed light on ambiguous contract language.

Per diem fee

An arbitrator’s daily rate for hearings. It also is applied for cancellations and postponements during an arbitrator’s cancellation notice periods.

Prima facie case

A case in which evidence presented by one party will be sufficient for that party to prevail if not contradicted by rebutting evidence.

Progressive Discipline

As a rule, except for offenses that are egregious, discipline will be assessed in some system of increasing severity for repeat offenses. For example, the penalty for tardiness may initially be one day off without pay, and progress eventually to discharge. However, some employee offenses, such as violence in the workplace or theft, will be seen to merit immediate discharge, even with an employer who adheres in all other situations to a system of progressive discipline. The goal of progressive discipline is that it be punitive, but also remedial, in that it should ideally act as a caution to workers regarding repeating the offense and encourage them to modify their behavior. When presented with a discipline case, arbitrators will normally assess whether the system of discipline is progressive and whether the actual discipline imposed is reasonable under the circumstances.

Public policy consideration

The application of certain objectives relating to health, morals, and integrity of government that external law seeks to advance. Such considerations may be raised during an arbitration hearing or serve as the basis for court review once an arbitration award is rendered.

R

Rebuttal

The phase of a hearing that follows presentation of each side’s principal case in which a party calls a witness to rebut testimony and evidence that the other side entered earlier during its case-in-chief.

Relevant evidence

Evidence that tends to prove or disprove facts in a case.

Remedy

The action or procedure that is followed in order to enforce a right (such a seniority) or to obtain damages for injury to a right.

Rules of evidence

A set of rules governing what evidence should be admitted during a proceeding, typically designed to prevent unreliable evidence from being considered. While state and federal courts prescribe firm rules to govern the offer and acceptance of evidence, these rules are much more relaxed in labor arbitration.

S

Sequestration

The exclusion from a hearing of witnesses who will be testifying. Individuals who are not excluded from the hearing – even if they will later be testifying – include the parties’ representatives and individual grievants.

Seniority system

A system that grants employees employment preferences according to the employees’ length of service.

Settled Record

A concept used in discipline cases to limit the introduction of evidence or to avoid re-trying a case that previously was resolved, either by an earlier arbitration decision or by past abandonment of the claim. The record is deemed settled because the opportunity to challenge the discipline was available and now has passed, and the record is complete for future reliance by the parties. A settled record typically is used to demonstrate the progressive disciplinary steps that were taken in the past or to show an employee’s prior notice that the violation of a rule or policy would lead to discipline.

Shop steward

The Shop Steward (or union representative or union steward) in a unionized workplace is a member of the union whose job it is to represent and defend the interests of the other bargaining unit employees in various discussions with management, including but not limited to, the processing of grievances. His or her function is to act as a liaison between the employees and management, to serve as a sounding board for union members’ concerns or complaints, and to take part in grievance handling. In order to anticipate employee grievances and avoid labor/management conflict where possible, shop stewards are generally well versed in the terms and provisions of the collective bargaining agreement and are likely to discuss with management any breaches of that agreement.

The Shop Steward also serves as a conduit for information, memos, and policy statements by the union. As a rule, the Shop Steward is an employee of the company but enjoys certain rights in the execution of his/her union duties. For example, the agreement may provide a certain number of hours per week during which the Shop Steward may engage in union-related business while still receiving pay from the employer. It is often up to the Shop Steward to advise employees when they should file a grievance and assist them in doing so. An equally important function is to screen employee complaints and provide guidance for employees who may feel they have been aggrieved. This function aims at maintaining a smooth working relationship between management and employees and avoiding frivolous grievances.

Stare decisis

The principle that prior arbitration decisions should serve as a guide or precedent and control the determination of the arbitrator’s decision in the case at hand.

Submission agreement

Used by parties who wish to present a dispute to an arbitrator in the absence of a collective bargaining procedure or other employment agreement that authorizes arbitration. The submission usually identifies the nature of the dispute, the source of the arbitrator’s authority, the issue and relief to be decided, and the relief available.

Subpoena

A document formally requesting the attendance of a witness at a hearing.

Subpoena duces tecum

A document formally requesting the production of documents or other records at a hearing.

Summary judgment

After a party believes it has established that there is no material question of fact in the case before the arbitrator, that party may ask for summary judgment by the arbitrator without proceeding further in hearing or consideration of the case. The arbitrator need not necessarily grant the asking party’s request.

T

Terms and conditions of employment

Employees generally have the right to join together to address concerns at work and to seek to improve their terms and conditions of work. Some examples of subjects found to be included in the phrase “terms and conditions,” include rates of pay, wages, hours, fringe benefits, safety, workload, staffing, layoff procedure, and a grievance procedure. It may be an unfair labor practice for an employer or a union to refuse to bargain on a topic deemed to be a “mandatory subject of bargaining.” Although no statute expressly defines all the “terms and conditions” of employment, if bargaining over the subject would resolve a significant aspect of the employer-employee relationship, it is more likely to be considered a mandatory subject of bargaining.

U

Unfair labor practice

A violation of a national or state labor law by management or a union. Principal examples include interference with organizing, discrimination against an individual for union activity, and bad faith bargaining.

V

Voir dire

A method of examining an expert witness (or a juror) as to his or her qualifications for testifying.

Z

Zipper clause

A provision in a labor agreement, sometimes also known as an integration clause, which states that the agreement is a full and complete understanding of the parties upon completion of negotiations.

While in some sense ubiquitous in today’s legal landscape, little is known about arbitrators and the arbitration process.   Below are some “tidbits” of information on this subject.

• The Federal Mediation and Conciliation Service (FMCS), which administers a significant portion of the total number of labor-management cases appealed to arbitration, in the last three years has sent out an average of about 10,200 arbitrator panels per year. The number of decisions issued in those same years averaged about 4,900 labor cases, which means that there is a high rate of settlements and withdrawals.
• According to the U.S. Department of Labor’s Occupational Outlook Handbook, the number of arbitrators, mediators, and conciliators in the United States stood at 9100 in 2024, which represents an above-average growth rate of 5%.
• While there is no exact count, the number of arbitrators engaged in the practice of labor-management arbitration is thought to be some 1100 to 1300 arbitrators. The FMCS roster of labor-management arbitrators has numbered right round 1000 arbitrators in recent years. The AAA labor panel in 2022 included 576 arbitrators, while the AAA’s employment panel consisted of 943 arbitrators, of which 160 were also on the labor panel. Membership in the National Academy of Arbitrators (whose admission standards capture established and more experienced neutrals) was 583 in 2023.
• To be listed as an arbitrator with an arbitration administrative agency like the FMCS and the AAA, an individual must meet certain membership requirements. There is no license required to serve as an arbitrator since the parties are free to choose anyone they want.
• Not all arbitrators are lawyers. In the last comprehensive study of the profession in 1987, 54 percent of labor arbitrators were identified as lawyers.  This percentage is believed to be increasing.

ABOUT THE ARBITRATION PROCESS

Why do parties go to arbitration instead of to court?

Generally, arbitration is perceived as a less expensive and quicker method than litigation of resolving labor/management disputes. Especially in a setting where unresolved disputes may fester and impede productivity, an efficient way of settling disagreements is imperative. The parties also have the opportunity to select an experienced labor arbitrator who is familiar with industry standards and the peculiarities of interpreting a collectively bargained contract, rather than have their case heard by a judge or jury who may be unfamiliar with the labor-management context.

Can you have arbitration without a labor union?

Yes. Arbitration resolves disputes between parties, regardless of the setting. In the workplace, most arbitration takes place as a way to resolve disputes that occur in the application or interpretation of collective bargaining agreements between employers and the unions that represent workers. That process may take place pursuant to the agreement of the parties or, generally in the public sector, pursuant to statute. However, employers may offer arbitration as a way to resolve workplace disputes with employees even in the absence of a union by adopting arbitration language in policy, employee handbooks, or contracts. Individual contracts of employment may also be written to provide for resolution of disputes through arbitration. Occasionally, the courts refer parties to arbitration.

How much does arbitration cost? Who pays for it?

The total cost of an arbitration to the employer and union concerned can vary widely, depending upon several factors. Nevertheless, the arbitration process can be far less expensive and far speedier than taking a case to court.

Labor arbitrators charge a daily rate for their services. Their rates are available from referral agencies or their websites (if they have one). Arbitrator fees range from about $1000 per day (per diem) to $5000 per day. The national average per diem charge for FMCS arbitrators in Fiscal Year 2022 was $1712. But rates vary widely based on geography. Eight states on the east and west coasts have average arbitrator per diems of more than $2000 according to FMCS statistics for FY 2022. In addition, arbitrators will charge the parties for time in travel (usually pro-rated) and/or time in executive session (pre- or post-hearing discussions with both parties, often via telephone). The parties will also be charged for the arbitrator’s necessary expenses – such as travel and meals – incurred in connection with holding the hearing.

Figures on the average cost of an arbitration are generally available from either American Arbitration Associate or the Federal Mediation and Conciliation Service and may also be found from other sources. In most cases, the parties to an arbitration divide the cost of the arbitrator’s fees and expenses evenly – that is, each pays half. In very rare cases, the collective bargaining agreement between the parties may specify a different distribution of the cost, including such provisions as “loser pays the cost of the arbitrator.” A typical arbitration provision, however, will specify that each party pays the costs of its representative (lawyer or non-lawyer) and those associated with providing its own witnesses, with the parties splitting the cost of the arbitrator’s fees and expenses.

How do an employer and an employee (or union) arrive at arbitration?

An employer-union arbitration hearing over a workplace dispute generally is preceded by a negotiated grievance process, which is intended to resolve disputes informally and at lower levels of the organization. Only those disputes that are not resolved through that process are referred to arbitration. Parties may, by agreement, waive all or some of the steps of the grievance procedure and proceed directly to arbitration. Individual employment agreements may also require preliminary steps (e.g., informal discussions or mediation) as preconditions for the invocation of arbitration or may allow direct and immediate use of the process.

How does an arbitrator know a witness is telling the truth?

Witnesses in an arbitration are sworn to tell the truth in a manner similar to the procedure used in a court of law. However, this process does not guarantee that a particular witness will tell the truth. Most experienced arbitrators are sensitive to internal inconsistencies in a witness’s testimony and to the witness’ responses to opposing counsel’s cross examination when assessing the veracity of a witness. An arbitrator’s review of the hearing record (either the arbitrator’s notes or a court reporter’s transcript) may also reveal inconsistencies that lead an arbitrator to question a witness’s credibility. Still, arbitrators are generally careful not to draw unwarranted conclusions about a witness’s credibility based upon largely irrelevant cultural norms and involuntary responses – such as whether the witness was nervous or looked the arbitrator in the eye when responding to questions.

Is an arbitrator bound by previous arbitration decisions?

No. An arbitrator may choose how much weight to give to a prior arbitration award in deciding a current dispute. Many arbitrators believe that an award interpreting contract language should be consistent with a prior award involving the same parties and the same provision, reasoning that if the parties intended something else, they would have bargained new language. In such a case, an arbitrator will rule consistently with the prior award unless the arbitrator finds the previous arbitrator’s reasoning to be substantially flawed. An award written by an arbitrator involving different parties or interpreting different contract language will be persuasive to an arbitrator only to the extent the award is well-reasoned and is consistent with accepted industry standards.

Who decides what issue is to be decided in arbitration?

In some cases, the parties to a dispute will mutually frame an issue for the arbitrator to decide prior to the start of the arbitration hearing. Occasionally, each party will arrive at a hearing with an issue that it believes best describes the matter to be decided by the arbitrator. When this happens, the arbitrator may help them find a statement of the issue that satisfies both sides. The parties may also agree that the arbitrator may frame the issue as part of the written award. If the parties agree to allow the arbitrator to frame the issue, they expect that it will be based closely upon the issue or issues originally proposed by the parties, either prior to the start of the hearing or as expressed during the arbitration hearing. Once the issue is determined, either by the parties or by the arbitrator, it delineates the scope of what matter or matters the arbitrator may address in his or her award.

What happens if one party refused to attend the arbitration?

An arbitrator may hold a hearing in the absence of one party so long as the absent party received fair notice of the date, time, and place of the hearing but refused to attend. However, many arbitrators attempt to avoid so-called ex parte hearings because hearings of this nature are not likely to help resolve underlying workplace issues. If the arbitrator decides to hold the hearing with only one party present, the arbitrator’s ruling will be based on the evidence presented by the appearing party. An arbitrator will not make a ruling based solely on the default of one party.

How are arbitrators chosen?

There are several methods by which arbitrators are selected by the parties to a dispute:

(1) Parties may request a “strike” list of arbitrators from an organization such as the American Arbitration Association or the Federal Mediation and Conciliation Service. In many states a state department of employee/employer relations may be asked to provide such lists of arbitrators. For example, in New York State the Public Employment Relations Board (PERB) supplies strike lists for employees and employers in the public sector. Once each party receives the list of arbitrators (usually containing seven or nine names) each party strikes (crosses off) any arbitrator it finds unacceptable and then ranks the arbitrators remaining in order of preference. The lists are then usually returned to the agencies, and the arbitrator with the highest combined rank is notified of his/her selection.

(2) Parties to an arbitration may confer and agree on a single arbitrator whom they wish to hear a particular dispute. They will then notify the arbitrator of his/her selection.

(3) Some parties mutually appoint a panel of arbitrators to be selected on a rotating basis. On any particular case they may select an arbitrator out of the rotation (for example, if that arbitrator has particular knowledge about a certain subject matter, like engineering). Of the parties who appoint a panel of arbitrators, some appoint the panel for the life of the collective bargaining agreement, and some appoint the panel on an open-ended basis. In the latter case the parties will specify under what circumstances an arbitrator may be removed from or added to the rotating panel. For example, under some agreements either party may insist upon the removal of a specific arbitrator. In others, both parties must agree on his/her removal, especially if the appointment was for the life of the agreement, and the term of the agreement has not yet expired.

What is the difference between arbitration and mediation?

Mediation and arbitration both involve finding a resolution to a dispute (usually over the interpretation or application of a written contract) and involve a third party (an arbitrator or mediator). However, the method by which resolution is reached is completely different in arbitration and mediation.

In mediation the parties (employer and union or other employee representative) to a labor-management dispute mutually select an impartial third party to help them reach agreement over a disputed issue or issues. The role of the mediator is to listen to the positions and interests of both parties, to make suggestions for resolution if appropriate, and to help them reach an agreement to which they can both commit. Mediation may be voluntary or imposed by state or federal legislation. The mediator has no authority to force the parties to come to an agreement and cannot impose his or her version of a good resolution upon them. Any suggestion he or she makes about what would be the “best” solution for the dispute is not binding upon the parties.

In arbitration the parties mutually select an impartial party to hear both parties’ positions and arguments, consider live witness (oral) testimony and documentary evidence if offered, and write an opinion and award resolving the issue in question. The parties to arbitration generally agree in advance that the resulting award will be final and binding upon them. Most collective bargaining agreements contain a specific provision that addresses the arbitration of disputes. Sometimes an arbitrator will try to mediate a dispute prior to moving to arbitration. In such circumstances he or she tries to get the parties to resolve the dispute on their own without having a decision imposed upon them.

ABOUT ARBITRATION AND THE PUBLIC

Are arbitration awards made public?

An arbitrator may not make an award public without first gaining the consent of the parties. The parties’ permission may be sought at the hearing or when the award is issued. Alternatively, the parties themselves may choose to make the award public and, in the public sector, the government may require that awards be shared with the public.

Does the press have a right to “sit in on” arbitrations?

Private sector arbitration is ordinarily a matter of contract between parties. As such, it is a private proceeding from which the press may be excluded by the parties. Most parties as a matter of practice allow only those persons with a direct interest in the proceeding to attend. Parties may require the sequestration (separation) of witnesses during the testimony of other witnesses during a proceeding. Generally, in such situations individual grievants are entitled to remain in the hearing, notwithstanding sequestration.

Whether the press has the right to be present for public sector arbitration hearings (that is, hearings between a government agency and a union representing its employees or between a government agency and an individual employee) over the objection of one or both parties is generally determined by governing “sunshine” or “open meeting” laws. In some jurisdictions, public sector arbitration hearings are covered by such laws that will allow any member of the public to attend. If not covered or if there is dispute as to coverage, press attendance may be allowed only pursuant to a court order.

Why won’t an arbitrator talk with the press outside the hearing or when the arbitration case is completed?

In private sector arbitration the arbitration process is private. But even in public sector arbitration, arbitrators do not comment on cases before them for both practical and ethical reasons. It would be improper for an arbitrator to comment on a pending (undecided) case. After the opinion and award is rendered, it is that document (which well may be private) and only that document that expresses the arbitrator’s view of the dispute.

ABOUT THE ARBITRATION PROCESS AND THE LAW

Can an arbitration award be appealed?

The standard agreement between parties to an arbitration specifies that the arbitrator’s decision shall be final and binding upon both sides. Therefore, it is unusual for an arbitrator’s award to be successfully appealed. For more than fifty years courts generally did not consider reviewing or vacating (invalidating) an arbitrator’s award, except under very limited circumstances, such as:

1. The arbitrator did not write a decision and award that respected the confines of the parties’ collective bargaining agreement. For example, many agreements provide that an arbitrator may not add to or change language in the agreement.
2. The arbitrator decided issues not placed before him or her by the parties.
3. The arbitrator’s award was incomprehensible.
4. The arbitrator’s award was contrary to state or federal law; or
5. The arbitrator engaged in deception or fraud – such as failure to disclose to the parties that he or she is a major stockholder in the employer’s company or is the union representative’s close relative.

More recently, however, there have been exceptions to the courts’ general respect for the finality of the arbitrator’s award. For example, some courts have occasionally reversed an award they considered to be “contrary to public policy.” In addition, some awards may be reviewed if they concern federal employment laws (e.g., the Civil Rights Act of 1964 or the Age Discrimination in Employment Act of 1972) or various state laws, such as those covering arbitration of state employee grievances (such as policemen or teachers).

Can witnesses caught lying in an arbitration hearing be charged with perjury?

Most state statues authorize an arbitrator to swear witnesses at an arbitration hearing and some go so far as to require it. When not compelled to swear witnesses, an arbitrator will typically defer to the parties’ preference as to whether witnesses will be asked to swear to tell the truth. If an arbitrator is not authorized to administer oaths or no oath is administered before the witness testifies, the witness could not be prosecuted for perjury (giving false testimony). Even when the witness swears to tell the truth and nonetheless lies in an arbitration, prosecution for perjury is unlikely.

Is an arbitrator bound by external law or external legal procedures?

Most arbitration takes place pursuant to contract, and the arbitrator’s authority is derived from and limited to enforcement of contract terms rather than external law. However, the parties to a contract may specifically incorporate external law provisions, and arbitrators will not generally interpret contracts in ways that are inconsistent with external law. Some arbitrations, particularly those in the public sector, take place pursuant to statute. In such situations, the statute may provide for the application of external law. When arbitrators apply external law, they generally are placed in the role of the trier of fact who would otherwise hear and decide the dispute, are bound to apply the law properly, and are subject to review by courts to ensure proper application of the law.

What happens if the losing party refuses to abide by an arbitration award?

Arbitration awards that direct a remedy (e.g., returning an employee to work, payment of benefits, or ordering change in a particular management practice) are not self-enforcing. Parties may return to the arbitrator for clarification of an award based on their agreement or the arbitrator’s retained jurisdiction. However, if a party (ordinarily the employer) refuses to comply with an award, the party seeking enforcement may go into court to obtain an appropriate order. State arbitration laws generally entitle parties to enforce arbitration awards through the courts.

ABOUT ARBITRATORS

How does someone become a labor/management arbitrator?

An arbitrator is mutually selected by labor and management representatives to resolve their dispute by rendering a final and binding award. Consequently, arbitrators must be impartial and sufficiently experienced so that the parties will feel confident in making the selection. Parties generally feel most comfortable turning this responsibility over to arbitrators whom they know or who have excellent reputations in the labor/management community. While many arbitrators are also lawyers, it is not necessary to have a law degree to be a successful arbitrator. Many newer arbitrators “learn the ropes” by serving an apprenticeship or internship under a more-experienced arbitrator. From time to time, agencies have training programs where applicants can learn from experienced arbitrators.

Who monitors the quality of an arbitrator’s work?

Referral agencies may survey their clients (labor and management) following an arbitration to judge how the parties view the arbitrator’s handling of the hearing, rulings on evidentiary matters, and similar aspects of his or her conduct. In addition, an arbitrator’s previous awards may often be found on web sites such as the those maintained by the Bureau of National Affairs (BNA) and the American Arbitration Association (AAA). It should be noted, however, that the labor-management community – particularly, employer and employee representatives and impartial third parties – is relatively small. Most arbitrators practice in a relatively limited geographical area of the United States (Northeast, Midwest, Southwest, etc.). Thus, word-of-mouth comments from colleagues and prior experience can become the primary means by which party representatives assess a particular arbitrator. The National Academy of Arbitrators (NAA) does not monitor its members’ written awards or hearing conduct, but it maintains a committee that considers parties’ complaints about NAA-member arbitrators. The Committee on Professional Responsibility and Grievances (CPRG) addresses such complaints when they arise. A link to the CPRG is located on the NAA web site.

Is there a Code of “Ethics” for arbitrators?

Since 1951 the National Academy of Arbitrators (NAA) has maintained a code of professional responsibility. That code is now entitled “Code of Professional Responsibility for Arbitrators of Labor-Management Disputes.” The Code applies, as well, to arbitrators in non-union employer-employee disputes.  The American Arbitration Association and the Federal Mediation and Conciliation Service also apply the Code to the arbitrators on their rosters. In addition, many arbitrators who are not NAA members have adopted the Code as their professional standard of ethics.

Under the Code it is an arbitrator’s duty to make determinations of fact and render decisions free of bias toward one party or the other. To that end, it is an arbitrator’s responsibility to disclose to both parties any association or activity that might be viewed as a conflict of interest prejudicing his or her conduct of the hearing and rendering of an impartial decision. Failure to do so may constitute grounds for a court to vacate (render invalid) an arbitration award, and at the very east will likely imperil the arbitrator’s future career.

Labor arbitration refers to arbitration that takes place in the context of collective bargaining contracts or negotiations. Employment arbitration is arbitration that takes place as the result of individual employment contracts, non-union company policies, and/or pre-dispute or post-dispute agreements to arbitrate (concerning statutory rights).

Many arbitrators who work as labor arbitrators also do employment arbitration. Arbitration service providers such as the American Arbitration Association maintain separate rosters of arbitrators for labor arbitration and employment arbitration. The admission standards for labor and employment arbitrator rosters are different, and the latter does not require non-affiliation neutrality.

Although they share some similarities, employment arbitration and labor arbitration are significantly different processes.  Below, Barry Winograd, an arbitrator and mediator and member of the NAA answers several important questions about employment arbitration.

What is employment arbitration?

“Employment arbitration” refers to the resolution of workplace legal disputes by a person other than a judge or jury in court.  In essence, employment arbitration is a substitute for civil litigation. Employment arbitration is in contrast to arbitration for unionized employees under a collective bargaining agreement.  A separate “labor arbitration” procedure applies to those employees.  In the union context, arbitration is designed to resolve disputes as a substitute for economic pressure in the form of strikes or lockouts.

Employment arbitration can be required by the terms of an agreement that covers arbitration only or by an agreement that also spells out other terms of employment, such as pay and benefits.  An agreement requiring arbitration may apply to executive level employees and to those at other levels of the workplace, particularly managers, supervisors, and administrative staff.

An employment arbitration proceeding covers disputes about an underlying employment agreement; for example, the issue may involve whether a termination is appropriate or whether pay or a commission is owed.  Unless the employment agreement states that an employee only can be dismissed for actual cause, employees in the United States are considered to be “at will” and can be dismissed for any reason, except for an unlawful reason such as race or gender discrimination.  The same general rule applies in employment arbitration cases.  In contrast to the “at will” doctrine, most collective bargaining agreements between employers and unions require proof of actual cause for discipline, often referred to as “just cause.”

Typically, an employment arbitration will consider any claims related to employment even if not expressly mentioned in an agreement, including alleged violations of federal and state statutes that prohibit discrimination.  However, some claims may be excluded from an arbitration agreement, such as state unemployment and workers’ compensation claims and charges filed with the National Labor Relations Board or the Equal Employment Opportunity Commission.

What is mandatory employment arbitration?

“Mandatory” employment arbitration involves an arbitration procedure that is required as a condition of employment.  In this situation an employee does not have a choice; the employee must either accept the job with arbitration or find another job.  Mandatory employment arbitration is similar to arbitration obligations required of consumers as a condition for credit card, cell phone, health insurance, and other kinds of common commercial arrangements.

Mandatory arbitration agreements are enforced by courts because employees (and consumers) enter the relationship while knowing that there is an agreement to arbitrate, or because the employee could have known that arbitration was required based on a written document presented to the employee.  In this context, mandatory arbitration applies even if an employee claims that the agreement was not voluntary.

Employment cases that arise under mandatory agreements can be challenged if the terms are deemed too one-sided or unfair.  In the eyes of the law, such an agreement is considered unconscionable.  For example, if an employer selects the arbitrator but an employee has no say in the selection, a court can decline to enforce the agreement because it is unconscionable.  In addition, a court may find that a mandatory agreement is unconscionable if it states that an employee is not entitled to recover remedies that would apply if the case were in court.

Mandatory agreements also have been challenged in the past because they often contain waivers of an employee’s option to initiate or participate in a class action.  The U.S. Supreme Court has ruled in cases brought by consumers and small businesses that such “class action waivers” are permitted.  As a result, individual arbitrations are required for each claim, even if the claims are relatively small and involve many people.  These decisions have been applied in federal and state courts to preclude class actions in employment disputes in court or in arbitration.

Opponents of mandatory employment arbitration and other compulsory arbitration agreements argue that it deprives individuals of a right to have civil claims presented in a jury trial.  They also argue that mandatory arbitration often involves relatively small claims and, by requiring time-consuming and expensive individual arbitration proceedings instead of class actions, few cases are initiated.  As a consequence, according to opponents, employers are effectively immunized from liability and effective remedies.

Those favoring mandatory employment arbitration urge that it provides access to resolve claims for employees who otherwise would have difficulty finding attorneys to bring their claims in court.  They also maintain that arbitration is, in most cases, a speedier and less expensive way to resolve disputes.  Proponents believe that arbitrators will not be as unpredictable as juries, and when a plaintiff prevails, that arbitrators will award more reasonable amounts as damages.  With respect to class actions, the proponents argue that such cases in court or in arbitration cannot deal with the factual variety of individual claims.

How does an employment arbitration begin?

Employment arbitration cases, including mandatory cases, often are initiated with organizations that administer the proceeding for the parties.  Two of the organizations serving in this role are the American Arbitration Association (AAA) and the Judicial Arbitration and Mediation Service (JAMS).  In handling a case, the AAA and JAMS will provide each side with a list of possible arbitrators, oversee the selection process, and coordinate hearing arrangements.  These organizations have rules that govern how the proceeding goes forward. In some instances, parties will agree on an arbitrator independently of the AAA or JAMS or another group and ask the arbitrator to administer the proceeding.

Arbitrators hearing employment cases often are professionals who serve as arbitrators on a full-time basis with many years or decades of experience in the field.  At times, the parties also will select those who practice employment law but only arbitrate periodically.  Employment arbitrators need not be attorneys, although most are.  This differs from the field of labor arbitration where many non-attorneys who previously worked for employers and unions serve as arbitrators.

How is an employment arbitration conducted?

Employment arbitration proceedings, including mandatory cases, usually involve a hearing that resembles a trial in a civil dispute, although arbitration hearings are not conducted in a courtroom.  As in a civil case, the parties to an arbitration will prepare by engaging in discovery activity, such as depositions and the production of documents.  The parties also may file motions such as motions for summary judgment to resolve the case without a hearing.

Eventually, at the hearing witnesses provide testimony on direct and cross-examination, exhibits are offered, and arguments are presented to the arbitrator.  In many instances, but not all, verbatim transcripts are made of the hearing. After the evidence is presented, the advocates frequently provide post-hearing briefs to summarize the facts and any relevant law for the arbitrator’s consideration.

Who pays for the arbitration?

In regular, non-mandatory employment arbitrations it is assumed the parties will share equally the expense of the arbitrator.  This is why in arbitrations of this type an arbitrator often will request advance deposits from each side.

In traditional arbitration cases it also is presumed the parties will pay for their own attorneys and related costs, such as the expenses of discovery.  However, many agreements provide that the prevailing party in a case is entitled to recover all attorney fees and costs associated with the proceeding.  Another exception to the usual presumption applies if the case involves a statutory discrimination claim.  Under most federal and state anti-discrimination laws, a prevailing plaintiff is entitled to recover fees and costs.  This will include the arbitrator’s fees if a one-half share was prepaid in advance of the hearing.

In contrast to the practice just described, under many mandatory arbitration agreements (or pursuant to the rules of the AAA and JAMS and some state court decisions, the cost of the arbitrator’s fees is placed on the employer, since it is the employer that has raised arbitration as a condition of employment.  In those cases, an employee-plaintiff may be required to pay the equivalent of a court filing fee and perhaps share the expense of a reporter to transcribe the case.  Generally, the plaintiff (or plaintiff’s counsel) will pay for any discovery that the plaintiff requires. Shifting of fees and recovery of costs are allowed in a discrimination case in which the plaintiff prevails and in other cases under a variety of theories.

In both types of employment arbitrations, the fees for the arbitrator can add up quickly, especially for experienced arbitrators who are in demand.  It is not unusual for arbitrators to charge $300 to $400 per hour, or more, especially in major metropolitan areas.  These costs should be considered in deciding if and how to move forward with a case.

How long does it take to complete an arbitration?

The length of time for the arbitration process from start to finish varies widely.  For the simpler case, including mandatory arbitration proceedings, the time from filing a claim to a hearing might be in a range of four to eight months, depending on the extent of pre-hearing discovery and motions.  The time for a decision after the hearing can take another two or three months, especially if a transcript is prepared and advocates submit post-hearing briefs.  More complex cases will take longer to get to the hearing and the final decision.

Can an arbitration decision be appealed?

A party who loses an arbitration decision is permitted to pursue an action in court to “vacate” or reverse the decision.  However, under both federal and state law the grounds for challenging an arbitration decision are few.  The most common grounds concern fraud or corruption in the process or an egregious error by the arbitrator, such as failing to disclose a conflict of interest.  The reason for a rule strictly limiting appeals is that the parties have contractually agreed to arbitration to provide a final and binding resolution. Broad review would undermine such commitments.  Hence, even if the arbitrator is in error on the facts or the law, this in most instances is not sufficient to reverse the decision. If the parties have agreed to an expanded scope of judicial review, however, appeals may be allowed as permitted by state law (but not the federal system).  Stated simply, it is generally easier to appeal the decision of a trial judge in a public court.  For this reason alone, some employers (and plaintiffs) dislike going to arbitration.