Labor Relations and Collective Bargaining Eighth Edition

Michael R. Carrell & Christina Heavrin Labor Relations and Collective Bargaining Eighth Edition www.prenhall.com/carrell PART IV: The Labor Relations Process in Action CHAPTER 11 The Arbitration Process © 2007 Prentice Hall Inc. All rights reserved

Chapter Outline History and Legal State of Arbitration Arbitration of Statutory Rights in Union and Non-union Cases Types of Arbitration Selecting the Arbitrator Determining Arbitrability Hearing Procedures Case Preparation Contractual Issues Arbitration Issues in the Public Sector

Labor News Arbitrator Cites “Double Jeopardy” Bus driver: terminated for his record of numerous minor offenses: 4 in one year Employer: discipline code included termination after four offenses in the period of a year Union: argued that his six-day suspension was the disciplinary action for the last offense, thus the termination decision was a second disciplinary action for the same offense, and was “double jeopardy,” or two penalties for the same offense. Arbitrator: applied the “double jeopardy”principle and thus employer could not levy the second penalty--termination.

History and Legal State of Arbitration Arbitration is a matter of contract Duty to arbitrate not influenced by the merits of the underlying grievance Presumption of arbitrability unless the contract contains an explicit exclusion of the issue under dispute Courts should enforce arbitration award without examining its correctness • Arbitrator’s award not limited by the • words of the contract • Past practice • Parol evidence • “Common law of the shop” Lincoln Mills Steelworkers Trilogy • Five principles to • govern arbitration

History and Legal State of Arbitration (cont.) Lincoln Mills and the Steelworkers Trilogy (cont.) Three issues have evolved from these decisions General arbitrability - grievance is presumed to be arbitrable as long as the contract provides for arbitration and does not exclude the topic under consideration Expired contracts or changes in ownership duty to arbitrate can extend beyond the life of the contract Successorship - successor employer not required to adopt the substantive terms of the predecessor’s agreement Successor nonetheless inherits contractual duty to arbitrate as long as there is “substantial continuity” between old and new companies If based on contract interpretation, arbitrators’ decisions should not be questioned by courts

History and Legal Status of Arbitration (cont.) Lincoln Mills and the Steelworkers Trilogy (cont.) In sum, the Supreme Court: Made it difficult to avoid arbitration if the contract requires the arbitration of grievances Acknowledged the superiority of arbitration in resolving labor-management disputes under collective bargaining agreements The arbitrator’s role is not unlimited Role limited to interpretation and application of the contract Arbitrator “does not sit to dispense his own brand of industrial justice” As long as it is based on interpretation of the contract, arbitrator’s decision should be final and binding

Arbitration of Statutory Rights in Union and Non-Union Cases Alexander v. Gardner-Denver Public policy exception to labor arbitration Court ruled that an individual could not be precluded from suing under Civil Rights laws just because his claim had gone through arbitration under the collective bargaining agreement Title VII cases Grievant who loses an EEO matter in arbitration entitled to take the matter to court Wright v. Universal Maritime Service Corp. If a collective bargaining agreement arbitration provision “clearly and unmistakably” includes anti-discrimination claims, the Court might require an employee to arbitrate such a claim before resorting to the federal court

Arbitration of Statutory Rights in Union and Non-Union Cases (cont.) Individual employment agreements: 3 governing acts--1925 Federal Arbitration Act (FAA), 1926 Railway Labor Act (RLA); 1947 Labor Management Relations Act (LMRA) Circuit City Stores Inc., v. Adams Individual employees agreed to settle all claims against the employer by means of arbitration Grievant filed employment discrimination lawsuit Supreme Court ruled that the complaint must be heard by an arbitrator Employment arbitration agreements have increased as a result of the Circuit City ruling Green Tree Financial Corp.-Alabama v. Randolph Court ruled that a party seeking to avoid an arbitration agreement must demonstratethe likelihood of prohibitive costs, not just the possibility

Types of Arbitration Interest arbitration Occurs when a labor contract does not exist or when a change is sought Used infrequently Few parties are willing to allow a neutral third-party to set the terms of the labor agreement Arbitrators tend to “split the difference,” thereby causing parties to take more extreme positions

Rights (contract) arbitration Involves interpretation of existing contract terms Found in almost every labor agreement Demand for rights arbitration Based on the wishes and needs of the parties Arbitration process is more private than public judicial proceedings Involves more sophisticated and knowledgeable parties than those in most judicial proceedings Types of Arbitration (cont.)

Determining When to Arbitrate a Grievance Importance of the issue Merits of the case Effect of winning Psychological (face-saving) aspects Effect oflosing Possibilities for a settlement Considerations in arbitrating a grievance

Selecting the Arbitrator Labor and management have a hand in the selection and compensation of the arbitrator Arbitrator’s jurisdiction evolves from the collective bargaining agreement Most arbitrators selected on an ad hoc basis Permanent umpire - resolves disputes for the life of a contract Helps to provide a stable union-management relationship Impartial agency is generally the source of arbitrators Federal Mediation and Conciliation Service American Association

Steps in Selecting the Arbitrator (cont.) Step 1 At request of parties, tribunal sends a list of proposed arbitrators Step 2 Parties given seven days to study list, cross-off unacceptable names, and rank remaining names Step 3 Additional names submitted to parties if no mutually acceptable names identified Step 4 If parties cannot agree on a mutually acceptable name, tribunal will make an administrative appointment

Roles of arbitrators Must follow contract language when the intent of the provision is clear When the language is ambiguous, arbitrator must interpret the provision in question Interpretation of contract is guided by basic principles Honor the intent of the parties Interpret the agreement as a whole Give effect to all terms of the agreement Give undefined terms reasonable definitions Avoid absurd results by considering reason and equity Well-reasoned arbitrator’s opinion may become part of the contract Selecting the Arbitrator (cont.)

Role of arbitrators (cont.) Two role models for arbitrators have been developed Judge or umpire Mediator or impartial chairperson Arbitration services Federal Mediation and Conciliation Service Office of Arbitration Services Maintains a roster of qualified arbitrators Provides the parties with a list of arbitrators Appoints arbitrators following selection by the parties Selecting the Arbitrator (cont.)

Selecting the Arbitrator (cont.) Qualifications of arbitrators Not required to have any specific educational or technical training Have a variety of backgrounds Variables that affect the arbitrator selection include: Visibility Past arbitration decisions Use of procedural justice methods General qualifications Impartiality Integrity Ability and expertise Legal training

Tripartite arbitration board Equal membership of labor and management A neutral member who serves as chairperson Majority award of the board is final and binding Additional time and expense are incurred with a board Chair has unique role to keep others informed, outline issues Selecting the Arbitrator (cont.)

Determining Arbitrability Not an issue if both parties agree to submit dispute to arbitrator If one party challenges arbitrability Courts may get involved May grant an injunction May issue court order to arbitrate Arbitrability may be considered if an arbitrator’s award is submitted to a court for review Arbitrator may rule on question of arbitrability 2004 Republic Waste Services: question of arbitrability due to expired contract & no “retroactivity” clause

Hearing Procedures Opening statement of each party Lays groundwork for testimony of witnesses Should clearly identify the issue, indicate what is to be proved, and specify the relief sought Rules of evidence Strict legal rules of evidence usually not followed Arbitrator determines how evidence will be presented Assessing credibility of witnesses Arbitrator is both judge and jury

Presenting documents Sections of collective bargaining agreement that pertain to the grievance Photographs, videos, other visual aids can be used Examination of witnesses Both direct- and cross-examination of witnesses Summation Both sides given equal time for closing statements Each side emphasizes relevant facts and issues Hearing Procedures (cont.)

Arbitrator’s award and opinion: Awards - usually short, presented in written form, and signed by the arbitrator—may include money back pay, reinstatement to former position Opinion - separate from the award Statement of the reasons for the decision Well-reasoned opinion can contribute greatly to the acceptance of the award Hearing Procedures (cont.)

Case Preparation Background reading Discuss case Study other party’s case Written summary witness testimony Interview all witnesses Plan arbitrator trip to plant Assemble documents Review labor agreement Examine initiating grievance paper Study grievance statement and review its history 11 - 22 © 2004 Prentice Hall Inc. All rights reserved

Factors that May Harm a Party’s Case Emphasize arguments, minimize facts Use arbitration to harass other party Exaggeration of party’s case Argue with the other party Conceal essential facts Discourteous behavior Hold back supporting documents Withhold cooperation from arbitrator Use unrehearsed witnesses Tie up proceedings Negative influence on arbitrator’s decision

Contractual Issues Commonly arbitrated issues include: Overtime pay, selection Just cause: “Protection from arbitrary and capricious discipline has remained the rock-solid foundation upon which all other negotiated benefits have been based” Contractual basis for the right-to-discipline or discharge workers Definition of just cause in a specific instance is often interpreted by an arbitrator “make whole” remedy common Bureau of National Affairs criteria for just cause include: Adequate warning Prior investigation Evidence Equal treatment Reasonable penalty Rule of reason Internal consistency (mgmt. Past practice in similar cases)

Contractual Issues (cont.) Commonly arbitrated issues (cont.) Seniority recognition issues (layoff, promotion, transfer) Drug testing Proving the fact of drug-related impairment through drug testing provides just cause test necessary for discipline Arbitrators consider the following factors in deciding drug cases: Does the drug testing procedure violate the contract? Was the testing of the employee reasonable? Was the test itself fair? Was there on-the-job impairment? Can an employee be disciplined for refusing to be tested?

Contractual Issues (cont.) Commonly arbitrated issues (cont.) Absenteeism Problems resulting from absenteeism include: Lost productivity Additional costs Benefits Administrative time Management considers absenteeism a controllable problem Unions recognize problems caused by unexpected absences

Commonly arbitrated issues (cont.) Incompetence Should not be treated the same as a disciplinary problem Proper remedies include training, transfer, or demotion Management typically bears the burden of proving the worker’s incompetence Holiday pay eligibility Contract eligibility requirements must be fulfilled to receive pay for the holiday Cost of this benefit predisposes management to arbitrate cases involving holiday pay Holiday stretching is a related issue that is arbitrated Contractual Issues (cont.)

Commonly arbitrated issues (cont.) Management rights Arbitration frequently addresses management rights not expressly defined in the labor agreement Arbitrators often, but not always, take the view that management retains all unstated rights Standards of reasonableness and good faith used to evaluate managerial actions that adversely affect employees Contractual Issues (cont.)

Arbitration in the Public Sector Legislation permits collective bargaining, but prohibits strikes Often details procedures to resolve bargaining impasses Mediation provided in most states with collective bargaining Fact finding and advisory arbitration more successful in public sector Unbiased third party examines the impasse before issuing findings and recommendations Legality of allowing a third party to set the terms of the contract has been questioned

Interest arbitration violates principle of bilateral settlement of collective bargaining issues Discourages parties from making concessions Frequently, award is a compromise between parties’ final positions Proponents believe this is an incentive to negotiate Rights arbitration: the authority of the arbitrator in rights arbitration is limited by the terms and conditions of the collective bargaining agreement Arbitration in the Public Sector (cont.)

Labor Relations and Collective Bargaining Eighth Edition