Category Archives: Arbitration

Illinois Workers Locked Out for Two Years after Voting in Union

Source: Gail Warner, Labor Notes, no. 365, August 2009

Two years into a strike and lockout at a small mental-health provider in central Illinois, the 40 counselors who walked out are still standing. Years of fruitless bargaining, mediation, and picketing have left the workers clamoring for binding arbitration to bring the struggle to a close. They’re campaigning for the Employee Free Choice Act, which includes an arbitration provision to resolve first-contract disputes.

Arbitration Law: Who’s in Charge?

Source: Margaret L. Moses, Loyola University Chicago School of Law Public Law and Legal Theory Research Paper Series No. 2009-001

From the abstract:
In interpreting the Federal Arbitration Act (‘FAA”), the Supreme Court has not carried out the will of Congress, but instead, has created over the last twenty-five years a new law based upon its own policy preferences. The Court’s interpretation in a recent case, Hall Street v. Mattel, in conjunction with its earlier decision in Mitsubishi v. Soler, demonstrates how it has undervalued or ignored both the text of the statute and its legislative history. In disregard of Congress’s statutory commands, the Court has created a law which undercuts the protections Congress has adopted in the areas of civil rights, securities, consumer protection, antitrust and employment.

With respect to the arbitration of claims under mandatory law, many have called for heightened scrutiny of arbitrator awards. The Supreme Court, on the other hand, has shown in Hall v. Mattel that it wants no review whatsoever of an award based on a regulatory statute that may rest upon an erroneous conclusion of law. Congress needs to take back control of arbitration law and policy, consider overturning Hall v. Mattel through corrective legislation, and consider a complete overhaul of arbitration law to provide either for no arbitration of claims under mandatory law, or, at the least, for heightened scrutiny of arbitral awards based on such claims.

First-Contract Arbitration Facts: The Canadian Experience

Souce: Patrick Eagan-Van Meter Ross Eisenbrey, Economic Policy Institute, EPI Issue Brief #256, June 25, 2009

Canada’s use of arbitration to resolve negotiations of a first contract in a newly unionized workplace can teach us a lot about how the process could work in the United States. Read this Issue Brief for answers to some common questions about first-contract arbitrations.

Constitutional Viability of the Employee Free Choice Act’s Interest Arbitration Provision

Source: Philip B. Rosen, Richard I. Greenberg, Hofstra Labor & Employment Law Journal, Volume 26, No. 1, Fall 2008

Irrespective of one’s position on EFCA, the employer community, the labor movement, interest groups, politicians, lawyers, and academics all recognize that the bill in its current form would result in a fundamental change in labor law in the United States.

The merits of EFCA, which can and will be debated in the months and years ahead, are not the focus of this Article. This Article will examine the constitutionality of the mandatory interest arbitration provision of EFCA, with a particular focus on procedural Due Process and Equal Protection. While organized labor has indicated that it will not
allow the mandatory arbitration provision of the bill to be excised, there is a viable argument that EFCA’s mandatory interest arbitration provision does not satisfy constitutional requirements.

Part I of this Article sets forth the legislative history and specific provisions of EFCA. Parts II.A and II.B analyze the constitutionality of EFCA’s mandatory arbitration provision under the Due Process and Equal Protection Clauses. Part II.C summarizes a few other potential constitutional challenges.

Academics on Employee Free Choice – Multidisciplinary Approaches to Labor Law Reform

Source: John Logan ed., UC Berkeley Center for Labor Research and Education, May 2009

This report includes 13 essays on the Employee Free Choice Act, labor law, and unionization by professors and experts at nine universities and colleges throughout California. It addresses such topics as problems with current U.S. labor law; the potential impact of labor law reform on the economy; and how unionization affects such industries as the long-term care sector. Its contributors hail from UC Berkeley, UC Davis, University of Southern California, UC Irvine, UCLA, UC Santa Barbara, UC Riverside, UC Santa Cruz, and Occidental College.

Duty of Fair Representation Jurisprudential Reform: The Need to Adjudicate Disputes in Internal Union Review Tribunals and the Forgotten Remedy of Re-Arbitration

Source: Mitchell H. Rubinstein, University of Michigan Journal of Law Reform, Vol. 42, No. 3, 2009

From the abstract:
One of the best kept secrets in American labor law is that duty of fair representation jurisprudence simply does not work. It does not work for plaintiff union members because they must satisfy a close-to-impossible burden of proof and have a short statute of limitations window in which to assert their claim. It does not work for defendant unions because they are often forced to file pointless grievances in order to avoid the cost of litigation. It does not work for defendant employers because they are often brought into these lawsuits because they have the “deep pockets.”

This Article makes two proposals to reform duty of fair representation jurisprudence. First, this Article posits that putative plaintiffs should be required to have their claims adjudicated before internal union review tribunals as opposed to courts. This internal tribunal system, if procedurally and substantively fair, would provide unions with a complete defense to duty of fair representation claims. This would move most duty of fair representation disputes from the ex-post stage (after a court dispute has arisen) to the ex-ante stage (before a court dispute has arisen) and reduce unnecessary litigation. Second, this Article argues that the current system needs to be “tweaked” to return to the original Vaca v. Sipes, 386 U.S. 171 (1967), intent of utilizing rearbitration as a remedy, as distinguished from money damages, when a breach of the duty of fair representation is found.

Do Courts Create Moral Hazard?: When Judges Nullify Employer Liability in Arbitrations

Source: Michael H. LeRoy, Minnesota Law Review, February, 2009

Part I of this Article connects the idea of moral hazard to employment arbitration, explaining that laws and social programs reduce personal incentives to avoid risks and arguing that judicial review can serve as government insurance by relieving employers of liability for socially undesirable conduct.

Part II describes how individual employment arbitration helps employers manage litigation costs, while simultaneously disadvantaging some individuals.

Part III describes the complex web of standards that courts use to review arbitration awards. I also demonstrate that common law standards for vacatur increasingly interfere with arbitration.

Part IV pinpoints four scenarios that often occur in conjunction with reversal of arbitrator rulings: courts find that the arbitrator’s remedy is unauthorized or excessive; when courts vacate awards, delay and litigation expenses grow large; vacatur is sometimes caused by arbitration agreements that embed broad, judicial review standards; and state arbitration laws tend to increase court interference with awards.

Part V is the heart of my study, consisting of research methods and statistical findings, that identifies a disturbing trend regarding court review of arbitration awards: state courts vacated many arbitration wins for employees, but not for employers.

Part VI states that courts create moral hazard by vacating a high percentage of employee wins at arbitration. I also propose two public policy changes to reduce moral hazard.

Congress Considers Legislation That Could Significantly Alter Arbitration in the United States

Source: Mark Kantor, NYSBA New York Dispute Resolution Lawyer, Vol. 1 no. 1, Fall 2008

Arbitration in the United States has grown rapidly to encompass consumer and employment disputes. Many arbitration clauses in those fi elds now include waivers of U.S. class action rights, creating signifi cant controversy. In response to these developments, Congress is now considering several legislative proposals that would, if adopted, fundamentally alter arbitration in the United States. The changes contemplated by those bills extend far beyond consumer and similar disputes, to cover business-to-business and international arbitration as well.

Judicial Review Standards for Interest Arbitration Awards Under the Employee Free Choice Act

Source: Andrew Lee Younkins, University of San Francisco Law Review, Vol. 43 no. 2, Fall 2008

When interest arbitration is legally mandated, one or both parties may feel aggrieved by the result, and wish to challenge the terms of the collective bargaining agreement. A provision
of the Employee Free Choice Act (“EFCA”), a proposed act of Congress, would mandate interest arbitration of initial collective bargaining agreements when the union and the employer cannot agree on a contract within a prescribed period of time. The EFCA, however, does not provide courts guidance on how to review the collective bargaining agreements it would mandate.

On its own, the EFCA is inadequate to meet the needs of employers and unions who will be affected by its compulsory arbitration provisions. The EFCA’s first-contract compulsory arbitration provisions will lead unions to become reliant on an arbitrator to resolve their contract disputes, yet the EFCA does not specify a standard or scope for judicial review of interest arbitration awards. Because federal courts have not developed a body of law to address the review of labor union contracts, the EFCA should be amended to require that (1) courts conduct arbitrations in on-the-record hearings; (2) courts vary the level of deference accorded to interest arbitration awards, based on the arbitrator’s expertise; and (3) arbitrators craft awards according to a prescribed set of substantive standards.