Category Archives: Arbitration

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.

Privatizing Labor Law: Neutrality/Card Check Agreements and the Role of the Arbitrator

Source: Laura Cooper, Indiana Law Journal, Vol. 83, 2008

[N]eutrality/card check agreements are usually administered by private arbitrators empowered to interpret and apply them. In the last six to eight years, the American labor movement has significantly bypassed the legal structure Congress created for employees to express their desires regarding union representation and instead privatized labor law. In entering into neutrality/card check agreements, unions have focused on their goal of increasing union representation. However, such privatization has the secondary consequence of placing in the hands of private individuals serving as arbitrators some powers that had previously been the exclusive province of the NLRB, and other powers that even the NLRB never possessed. While scholarly, political, and administrative attention has understandably been focused on the broad public policy implications of neutrality/card check agreements, scant attention has been directed to what neutrality agreements require of arbitrators and whether these expectations are consistent with the institutional capacity *1590 and role of arbitrators. Do arbitrators actually have the legal authority and administrative capacity to assume this role? Can neutrality/card check agreements achieve their intended objectives if arbitrators cannot perform that role? What role can and should arbitrators play when unions join with employers in agreeing to privatize labor law?

Crowning the New King: The Statutory Arbitrator and the Demise of Judicial Review

Source: Michael H. LeRoy, Journal of Dispute Resolution, Vol. 29, No. 3, Spring 2009

From the abstract:
Judicial review of arbitration awards is highly deferential- but when does it become rubber stamping? Using original data, I find that federal courts vacated only 4.3 percent of 162 disputed awards. Nearly the same result was observed for a sub-sample of 44 employment discrimination awards under Title VII. By comparison, federal appeals courts in 2006 reversed 12.9 percent of 5,917 rulings made by civil court judges on the merits of legal claims.

Why are the rulings of Article III judges scrutinized more than the awards of citizen-arbitrators? What does this mean when companies can avoid Article III court rulings by requiring employees to arbitrate their claims? Judicial review of awards based on statutory claims is inadequate, and undermines the constitutional role of federal courts.

I point to two prominent junctures – in 1698, and again in 1925 – when lawmakers in England and the U.S. believed that court litigation hampered commerce. They enacted similar statutes to authorize courts to confirm disputed awards, unless these private rulings resulted from corruption or misconduct. This deference grew out of practical considerations. The parties had chosen the arbitrator, agreed to the private process, and bound themselves to an industry norm.

Courts deferred so heavily to awards because William III wanted these merchant tribunals to be autonomous. His law, the 1698 Arbitration Act, did not allow courts to vacate awards for fact finding or legal errors. Great deference in its reviewing standards reflected the king’s infallibility.

My textual research shows that the FAA’s reviewing standards descended from William III. I suggest that our law crowns today’s statutory arbitrator with the king’s mantle of infallibility. But this deference is too extreme for awards that rule on statutory claims. In Gilmer v. Johnson/Interstate Lane Corp., the Supreme Court ignored the commercial history of arbitration when it broadly approved a theory of forum substitution. Gilmer said that arbitrators may decide statutory claims, even if one disputant objects to the forum and wishes, instead, to be heard by a court. The result is that the ruling of the arbitrator is subject to a narrower standard for review than an Article III judge’s order. Epitomizing this regal deference, a contemporary court said: “The arbiter was chosen to be the Judge. That Judge has spoken. There it ends.” In textual and empirical analysis, I show that statutory arbitrations enjoy a presumption of royal infallibility. I conclude with two solutions for aligning the review of rulings by statutory arbitrators and Article III judges.