Labor Relations: Dispute Resolution

Module 3: Living under a Collective

Bargaining Agreement (CBA)

Topics

1. The Grievance Procedure 2. Labor Arbitration

The Grievance Procedure

Typically, labor contracts have multiyear terms, three years being the most popular length. The

longer the term, the more important it is that the parties carefully craft contract provisions for

maintaining a lasting, peaceful, and productive relationship. Provisions vary widely from

industry to industry and contract to contract. However, one feature contained in virtually all

CBAs is a negotiated grievance procedure. This procedure provides a mechanism for resolving

employee grievances and disputes over the interpretation or application of the CBA or both and

is central to creating and preserving the stability of the parties' relationship during the term of the

contract.

Grievance procedures are not confined to unionized organizations. In recent years, they have

gained popularity with an increasing number of nonunion employers. Many progressive

organizations without union relationships have voluntarily adopted employee grievance

procedures as a means for the orderly resolution of workplace disputes.

The grievance procedure serves a number of important purposes. Its most fundamental purpose is

to resolve misunderstandings over the precise meaning of the contract. When the parties

negotiate their CBA, they simply cannot anticipate every problem or scenario that may arise

during the life of the agreement. In addition, a critical part of the union's institutional role is to

promote employee job security and assure that work rules are applied fairly and that the

employer's disciplinary actions are fully supported. Some disagreements inevitably will arise

over the underlying decision to discipline a member of the bargaining unit or whether the

specific action being proposed, e.g., suspension or termination, is appropriate under the

circumstances.

Negotiated grievance procedures also play a crucial role from the broader perspective of society

at large. Labor disputes lead to lost wages and productivity. In extreme cases, they can

undermine the health of an industry or the nation's economy. The stakes for our national welfare

are quite high in encouraging the prompt, peaceful, and voluntary resolution of workplace

disputes. The unpleasant alternative is unbridled conflict and the potential for disruption to the

health of our economy.

Most, if not all, comprehensive labor contracts contain a detailed procedure for resolving

employee grievances, as well as those of the union itself and, much less often, management. A

grievance procedure has the obvious benefits of minimizing disruption and controlling costs. The

prompt and efficient resolution of grievances through established procedures pays dividends for

employees, the union, and management alike.

Common Features of Grievance Procedures

Grievance procedures take a multitude of forms, but most share two common features. First,

virtually all negotiated grievance procedures contain steps, that is, a hierarchical system for

elevating unresolved issues. For example, at step 1 of the procedure a grievance may simply be

an oral statement of a problem during an informal discussion among the employee, the union

steward, and the employee's supervisor. The discussion may involve something as

straightforward as a problem with the employee's paycheck or an assertion that the employee

was improperly denied an opportunity to work overtime.

If the issue cannot be informally resolved at step 1, it may be elevated to step 2. Step 2 is a

slightly more formal step in the grievance hierarchy. It would not be unusual for the CBA to

require that the grievance be committed to writing at step 2. The discussion at step 2 often

involves a higher level of supervision, e.g., the employee and his or her union representative.

Someone from the organization's human resources staff is often involved at the higher steps.

In addition to containing hierarchical steps, most grievance procedures also contain specified

time limits for filing and responding to grievances. For example, the procedure will indicate a

specific number of days within which the employee or union representative must surface the

underlying problem—the basis for the grievance. The purpose of such time limits is to avoid

"staleness," i.e., the expending of energy on matters that are no longer fresh in everyone's mind.

Once a grievance has been filed, the process is likely to specify a time limit within which

management must respond. After a grievance is filed, many CBAs provide that management

must state its position within 10, 15, or 20 days, indicating whether it agrees or disagrees with

the grievance, whether it is willing to resolve the matter, and so on.

For the union, the grievance procedure provides an essential mechanism for fulfilling its legal

duty to represent fairly all members of the bargaining unit. For management, it provides a

"bottom-up" avenue for communicating with its workforce, yielding valuable insight into

employee problems and concerns.

Grievance Procedure Schematic

Step Description Individuals Who May Be

Involved

1 Informal; oral

statement

Employee, immediate

supervisor, and steward

2

More formal;

written statement of

basis of grievance

Employee, second-level

supervisor, and steward

3

More formal; may

require written

management

response

Employee, group/division

manager, steward, and

human resources

representative

Grievance-Evaluation Process

As grievances are evaluated through the procedural steps, the parties have ample time and

opportunity to engage each other on the issues. In most instances, they will resolve the issues

through dialogue, problem-solving techniques, and informal negotiation before an arbitration

award is imposed. This process has the additional advantage of forestalling or eliminating similar

disputes that might have arisen in the future.

Even the most effective grievance procedure cannot completely eliminate conflict in the

workplace. There will inevitably be conflicts and disagreements. Perhaps the major strength of

the procedure is its ability to channel and institutionalize conflict and to provide a structured

safety valve for problems arising in the workplace.

Finally, the grievance evaluation process helps the parties reach understandings and agreements

that become adjuncts to the basic negotiated agreement. The accumulated body of grievance

resolutions and decisions injects an element of flexibility in the parties' relationship. Eventually,

when the contract expires and is renegotiated, both parties have not only shed some of their

"baggage" of unresolved issues but also have a useful record of concerns that may have to be

addressed in a successor contract.

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2. Labor Arbitration

In this section, we examine the purpose, nature, and scope of the arbitration process. Arbitration

is the final step in the process of resolving grievances. Unlike judges, who apply legal precedents

in deciding cases, arbitrators must deal with the unique features of individual CBAs. They also

apply something called the "common law of the shop." These are not written laws or case

decisions. Rather they are norms, standards, and principles that have evolved over several

decades of arbitration practice. They have gained wide acceptance as a means to resolve union-

management disagreements.

Arbitrators are unique in regards to the source of their power and authority. They are empowered

by the parties themselves, via the arbitration article in their CBAs. Such key matters as the

selection and payment of arbitrators as well as the limits of their authority will normally be

established in the parties' written agreement.

Arbitration is a quasi-judicial process. In most union-management relationships, it is used

infrequently and is reserved for those disputes that the parties find intractable. In addition to

resolving day-to-day disagreements as to the meaning and interpretation of the CBA, arbitrators

also play a crucial role in employee discipline cases. One of the most frequent issues referred to

arbitrators is the determination of whether a specific disciplinary action is justified and fully

supported by the evidence and surrounding circumstances.

Only the union, not the individual worker, can refer a case to arbitration. This system places

important power in the hands of the union and less in the hands of individual employees.

However, the "check and balance" on this union prerogative is its so called duty of fair

representation (DFR). Under the legal principle of DFR, the union is free to make fact-based

decisions about which cases it will pursue within the grievance-arbitration procedures and which

it will not. A union is not required to pursue every case its members may surface. On the other

hand, in choosing whether to take on a case, or how vigorously to pursue it, the union's actions

may not be based upon discriminatory considerations. Individual employees have a basis for

legal action against the union if it carries out its representational responsibilities in a

discriminatory or haphazard fashion.

Background

Arbitration as a means of conflict resolution gained popularity in the United States only after

World War II. A pivotal Supreme Court decision in 1960, known as the Steelworkers' Trilogy,

brought added credibility and stature to the process. Essentially, the Court recognized the unique

expertise of arbitrators and encouraged the use of arbitration to resolve labor disagreements. In

addition, the justices deemphasized the role of the courts in day-to-day union-management

relations, ruling that judges had no business weighing the merits of individual grievances.

Issues in Arbitration

The issues and concerns that are referred to labor arbitrators fall into two broad categories:

contract-interpretation disputes and disciplinary cases. Regarding the former, commentators have

repeated the tongue-in-cheek adage that a new CBA results in three separate agreements―(1) the

one the union thinks exists, (2) the one management thinks exists, and (3) the one the arbitrator

tells you exists. This adage conveys the reality that after many months of bargaining, the parties

have made numerous compromises and accommodations.

The language that ultimately appears in the CBA is often less than clear. What did union and

management negotiators mean when they stated that employees normally would not be required

to work Saturday overtime? How about a pledge that workers would not be penalized for

occasional tardiness in arriving at work in the morning?

The second broad category of cases referred to arbitrators involves disciplinary actions against

employees. For example, was a five-day suspension for failing to call in sick, justified? If an

employee is repeatedly rude to customers or coworkers, does this provide a sound basis to

discharge the employee? What about theft of company property? Or what about

insubordination, when an employee refuses to carry out an assigned task or job duty?

Unfortunately, these are all situations that arise in the modern workplace.

Although management retains the right to maintain order in the workplace and to impose

appropriate discipline, most CBAs permit the union to file grievances challenging disciplinary

actions. In instances where no accommodation can be reached, the ultimate question of whether a

disciplinary action was fair, just, and supported by the evidence may be decided through an

arbitration hearing.

Arbitrator Selection

The parties use several different methods to select arbitrators. At the national level, a small

federal agency, the Federal Mediation and Conciliation Services (FMCS), and the American

Arbitration Association (AAA) maintain rosters of qualified arbitrators. In response to a request

from the parties to a grievance or other dispute, these organizations will supply a roster of

qualified arbitrators from which to choose. The FMCS and the AAA also provide educational

materials and training opportunities for arbitrators, and have jointly published a code of ethical

conduct applicable to professionals working in the field of dispute resolution.

Some CBAs do not provide for arbitrator selection through the procedures of the FMCS or AAA.

Some parties agree to establish a permanent panel of arbitrators, and upcoming cases are simply

assigned to panel members on a rotating basis. Rarer still, are contracts that designate a

permanent arbitrator. In these arrangements, a designated individual assumes a permanent role in

hearing and deciding all cases for the duration of the contract.

Arbitrators come from a variety of backgrounds. More and more individuals entering the field

have training in the law. However, many arbitrators have specialized training or experience in

industrial relations or come from the academic community. Increasing numbers of women and

minorities are opening successful arbitration practices. The AAA, a nonprofit organization based

in Washington, D.C., provides education and training for arbitrators and publishes a code of

ethical conduct applicable to professionals working in the field.

Arbitration Procedures

In addition to selection procedures, most contracts also specify the way the arbitrator will be

compensated. Typically, the two sides agree to share equally in the arbitrator's fees and expenses.

The arbitration article of the contract may also address such questions as (1) how quickly the

arbitrator must issue his or her award and (2) whether the award must be in written form.

In some instances, the contract will indicate the level of formality the parties anticipate. At one

extreme, an arbitration hearing may entail formal examination and cross-examination of

witnesses and be conducted in a fashion very similar to an appearance in court. Other arbitrations

are conducted around a conference table, employing a more conversational format. In either case,

the rules governing the introduction of evidence are more relaxed than in court. The arbitrator, at

his or her discretion, may admit hearsay testimony, documents, or physical evidence that would

not meet the standards for introduction in a court proceeding.

Arbitration Awards

Most contracts require that the arbitrator commit to writing his or her decision in the case. In

weighing the facts presented, the arbitrator will first focus upon the wording of the parties'

agreement. What does it mean that employees will be subject to progressive discipline? What

did the union and company management intend when they agreed that "overtime will be

distributed on a fair and equitable basis?"

The arbitrator is also free to consider other factors in reaching a fair resolution. Did the parties

have an established practice for dealing with similar situations in the past? Is there a common or

widely accepted manner of handling similar situations within the industry where the parties

operate? While weighing all of these factors, the arbitrator's primary concern will be to enforce

the parties' intent, attempting to determine what outcome they had in mind when they crafted the

language in their CBA.