Grievance Arbitration

1. Grievance Arbitration a.k.a. “Rights” Arbitration

2. Definition and Historical Development • Grievance or rights arbitration: A neutral third party is used to apply or interpret the terms of an existing agreement • Authority comes mainly from the parties’ own agreement. They agreed to this process voluntarily as a way of avoiding strikes, etc. during the course of their agreement • This “institution” was developing on its own, but WW II’s no-strike environment added a big boost. War Labor Board often pushed for its use to avoid strikes that might disrupt the war effort

3. Legal Status of Grievance Arbitration Clarified via Supreme Court Decisions • Lincoln Mills (1957): Taft-Hartley’s Sec. 301 provides suits for enforcement of labor agreements, including injunctions • “Steel Workers Trilogy” (1960). Three cases involving USWA established policy of judicial deferral to arbitration. Principles: • Courts not to reviewmerits of grievance on appeal • Arbitration is the favored mechanism; when in doubt, courts order its use • Courts will enforce arbitration awards w/o review of merits • More recent refinements and elaboration on legal status (1970s) • Boy’s Market: Courts may use injunctive powers to stop strikes that violate no-strike clauses, despite Norris-LaGuardia (Federal Anti-Injunction Act of 1932) • Buffalo Forge: Injunctive powers can be used to halt strikes only where it’s clear the union agreed to arbitrate the dispute • Misco: Notable in halting trend toward erosion of judicial deferral policy

4. Some Implications of Legal Rulings • Federal authority backs a private decision-making process wherein courts give great deference to arbitration • Arbitration and no-strike clauses “read together” to determine what the parties agreed to arbitrate and what they agreed to leave outside the no-strike clause. In effect, courts affirmed and strengthened the quid pro quo notion relating GPs and arbitration with no-strike clauses • Labor injunctions return, but in a limited form. In accomodating N-L, courts noted v. different circumstances • Norris-LaGuardia situation: Court power used to squash union formation • Arbitration cases: Court power makes parties honor their agreements • NLRB deferral policy similarly broad, if ULP issues heard and resolved consistent with NLRA

5. Arbitration Proceedings and Decisions • Who? Anybody the parties choose • Usually chosen ad hoc from AAA or FMCS rosters • Some parties have permanent arbitrators (“umpires”) • Key characteristics of arbitration awards (decisions) • Final. There’s usually no appeal on merits • Binding. Parties must abide by award unless they agree to an alternative solution • Voluntary. The parties agreed to this procedure. It wasn’t imposed by government • Form of decisions: Usually written, reviewing issues, facts, contentions, evidence, contract provisions, etc. to provide a thorough rationale for the “award” (conclusion and remedy) that convinces both sides the arbitrator is wise and fair

6. Arbitration Proceedings and Decisions(continued) • Arbitration hearings • Similar to court, many parallels • Usually less formal (e.g., witnesses may not be sworn) • Arbitrator has discretion on many matters, but consistency arises from similar backgrounds (mostly law, economics, business), and professional guidelines (e.g., AAA, FMCS) • Major contrasts with courts • Arbitration recognizes on-going relationships, sensitive to parties’ need to live with the decision • Arbitration recognizes “common law of the shop” • Usually quicker, but not always quick • Draws authority from the parties (“bound by the four corners of the agreement”)

7. Arbitrator Decision Criteria • First and foremost, the terms of the agreement. Some arbitrators favor “parole evidence rule” -- no evidence contradicting the written agreement may be introduced • Past practice. Can even override written contract • Intent of the parties (e.g., “constructive discharge”) • Precedents. Not as strictly bound as courts are, but following them does enhance predictability, and arbitrators will usually give precedents some consideration • De minimus. Trivial matters can be dismissed, but note that cases on important principles can’t be ignored, even if the dollar amount is trivial • Burden of proof: Grievant and union except in discipline

8. Arbitration in Action:Employee Discipline Cases • Disciplinary actions may be the single largest focus of grievances (35%). Arbitrator decisions shape norms on discipline systems broadly, union and nonunion • Definition: Actions taken by ERs against EEs for alleged rule violations • Added significance: Ultimate form, discharge, is somewhat akin to “economic capital punishment,” for EE • Large share of cases implies major costs for ER and union ($7000 or more per case taken through arbitration?) • Also major indirect costs for ER in ineffective discipline • Historical trend in discipline: More emphasis on human rights, less on property. Also, at-will doctrine eroding

9. Principles and Elements of Discipline • Just cause -- two key elements • Clear and convincing evidence of violation? • Penalty appropriate for the offense? • Legitimate purposes of discipline • Mainly to correct EE behavior • But also to maintain respect, convey the rules, promote efficiency, and identify unacceptable behavior • Progression of penalties supports corrective aim • Nature of the rules -- what should it be? • Clear and reasonable, with consequences of violations indicated • Are they known to the EE? • “Price lists” help convey nature and penalties

10. Price List With Progressive Discipline

11. Evidence and Degree of Proof • Evidence requirements usually less strict than courts • Hearsay, entrapment may be allowed • Tougher standards for cases with serious charges (e.g., theft) • Conflicting testimony • As in court, truth has to be assessed under uncertainty • One general rule: Who stands to gain the most by lying? Other things equal, odds say that person is (usually favors management) • Parole evidence rule noted earlier (some arbitrators). The contract is the final word. Contradictory evidence not allowed. “Change the contract next negotiation” • Standard of proof: Usually the “weight of the evidence” (or preponderance of the evidence). Not “beyond a doubt”

12. Is the Penalty Appropriate? • Reasonableness (e.g., discharge for chewing gum?) • Past practice. Is there consistency? • Mitigating circumstances. Most common reason for reducing or setting aside a penalty • Management contributed to a problem (e.g., poor training) • Good work record and/or disciplinary history • Improbable circumstances unlikely to reoccur • Union official role deserves extra “slack” in some cases • Due process issues • Written notice and opportunity to be heard • No double jeopardy (being tried twice) or escalating penalties, but initial action may be conditional (“pending further investigation”) • Right to union representation if discipline is likely

13. Significance and Prevalence of Grievance Procedures and Grievance Arbitration • Significance • Upward communication in a top-down environment • Grievances are often spurs to organizing and important for union day-to-day roles • Costly to management (and union), but also important in encouraging consistency, fairness, and forethought • An alternative to strikes and other costly conflict • A system of “industrial jurisprudence” • A key “voice institution.” Is exit more efficient? • How prevalent are GPs with arbitration? • About 99% of CB contracts include GP, and 97% of these include arbitration (75% in public sector due to Civil Service alternative) • Nonunion sector: Growing use, but arbitration is still rare

14. Appraisals of GP/Arbitration Systems • Generally regarded as working well in terms of protecting individual EE rights and providing a strike alternative • Problems and criticisms • Creeping legalism, formalism, and slower resolution. Various experiments on-going to recapture its earlier advantages • Limited availability as unions decline • “Horse trading” and other phenomena can weaken value in protecting individual rights • Management: Limits discretion and interferes with efficiency • Unions • Weakens member support by reducing member involvement (via strikes, etc.) -- not a “mainstream” view? • Processes sometimes abused by ERs to weaken unions (financially)