The Arbitration Case Study of Jesse Stansky

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14.4c Grievance Arbitration

The function of rights arbitration (Arbitration over interpretation of the meaning of contract terms or employee work grievances) is to provide the solution to a grievance that a union and an employer have been unable to resolve by themselves. As mentioned earlier, arbitration is performed by a neutral third party (an arbitrator or impartial umpire). This third party’s decision dictates how the grievance is to be settled. Both parties are obligated to comply with the decision.

Decision to Arbitrate

In deciding whether to use arbitration, each party must weigh the costs involved against the importance of the case and the prospects of gaining a favorable award. It would seem logical that neither party would allow a weak case to go to arbitration if there were little possibility of gaining a favorable award. Logic, however, does not always prevail. For example, it is not unusual for a union to take a weak case to arbitration in order to demonstrate to the members that the union is willing to exhaust every remedy in looking out for their interests. Union officers also are not likely to refuse to take to arbitration the grievances of members who are popular or politically powerful in the union, even though their cases are weak. Moreover, under the fair representation doctrine (A doctrine under which unions have a legal obligation to assist both members and nonmembers in labor relations matters) , unions have a legal obligation to provide assistance to members who are pursuing grievances. Because members can bring suit against their unions for failing to process their grievances adequately, many union officers are reluctant to refuse taking even weak grievances to arbitration.

Management, on the other hand, may allow a weak case to go to arbitration to demonstrate to the union officers that management “cannot be pushed around.” Also, managers at lower levels may be reluctant to risk the displeasure of top management by stating that a certain HR policy is unworkable or unsound. Stubbornness and mutual antagonism also may force many grievances into arbitration because neither party is willing to make concessions to reach an agreement, even when it may recognize that it is in the wrong.

Arbitration Hearing

In our experience, employees unfamiliar with arbitration find the process confusing and often stressful. This is true for employees in the nonunion, as well as the union, setting. Arbitration hearings have the appearance of a court hearing but without many of the formalities of a court proceeding. The process begins with the swearing-in of witnesses and the introduction of the submission agreement. The submission agreement is a statement of the problem to be resolved. Such a statement might read: “Was the three-day suspension of

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Alex Hayden for just cause? If not, what is the appropriate remedy?” The parties will then make opening statements, followed by the presentation of facts and evidence, and the oral presentation of witnesses. The hearing will conclude with each side making summary statements that are arguments in support of its position.

In arbitrating a dispute, it is the responsibility of the arbitrator to ensure that each side receives a fair hearing during which it may present all of the facts it considers pertinent to the case. The primary purpose of the hearing is to assist the arbitrator in obtaining the facts necessary to resolve a human relations problem rather than a legal one. The arbitrator, therefore, has a right to question witnesses or to request additional facts from either party. After conducting the hearing and receiving post-hearing briefs (should the parties choose to submit them), the arbitrator customarily has 30 days in which to consider the evidence and render an award. In most labor contracts, the costs of arbitration are shared equally by the parties.

Arbitration Award

The arbitration award is a formal written document given to both sides. As in grievance procedures, there is no specific format to an arbitration award, but typically the award contains five parts:

submission agreement,

facts of the case,

positions of the parties,

opinion of the arbitrator, and

decision rendered.

As might be expected, the decision of the arbitrator is of major importance to the parties. However, the reasoning behind the decision—the opinion—is equally important since it can provide guidance concerning the interpretation of the labor agreement and the resolution of future disputes arising from its administration. In pointing out the merits of each party’s position, the reasoning that underlies the award can help lessen the disappointment and protect the self-esteem of those representing the unsuccessful party. The opinion will also evaluate the evidence presented by each side in support of its position and, in discipline cases, whether management had just cause for the action taken against an employee. (See Chapter 13 for a discussion of just cause in arbitration.) Importantly, in deciding a case, the arbitrator has the power to modify the outcome requested by both sides. It is not uncommon, for example, for an arbitrator to reduce a discharge to a suspension without pay for a specific time period.

Because of the importance and magnitude of arbitration in both the union and nonunion setting, the process by which arbitrators make decisions and the factors that influence those

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decisions are of continuing interest to managers. Typically, arbitrators use four factors when deciding cases:

1. The wording of the labor agreement (or employment policy in nonunion organizations)

2. The submission agreement as presented to the arbitrator

3. Testimony and evidence offered during the hearing

4. Arbitration criteria or standards (similar to standards of common law) against which cases are judged

When deciding the case of an employee discharged for absenteeism, for example, the arbitrator would consider these factors separately and/or jointly. Arbitrators are essentially constrained to decide cases on the basis of the wording of the labor agreement, or employment policy, and the facts, testimony, and evidence presented at the hearing.

In practice, arbitration decision-making is not an exact science. In fact, the decisions of arbitrators can be rather subjective. Arbitrators can, and do, interpret contract language differently (e.g., what “just cause discharge” actually means), they assign varying degrees of importance to testimony and evidence, they judge the truthfulness of witnesses differently, and they give arbitration standards greater or lesser weight as they apply to facts of the case. Each of these influences introduces subjectivity into the decision-making process.

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