A Primer on Labor Arbitration
By Roger L. Grandgenett, II and David R. Keene, II

Labor arbitration is a method of dispute resolution widely used as an alternative to litigation in the labor relations field. In fact, it is the preferred method in virtually every collective bargaining agreement in the United States. The purposes and benefits of labor arbitration are many it: avoids adding to already clogged federal courthouses; provides the parties with cheaper, faster dispute resolution; creates a body of arbitrators who are well-versed in the customs and traditions of labor relations; is less formal than litigation; and equitably shares the expenses, with the fees and expenses of the arbitrator split by both parties, and each party bearing the burden of their other expenses. Since the passage of the National Labor Relations Act in 1935, labor arbitration has grown and matured into a well-developed body of law.

The purpose of this article is to provide a broad overview of the labor arbitration process. First, this article discusses the grievance policy and issues that precede grievance arbitration. Next, it discusses arbitrator selection. Then the arbitration hearing itself is addressed, from preliminary motions to final decision and appeal. Finally, a different kind of arbitration, called interest arbitration, is briefly addressed.

The grievance policy and process
In any collective bargaining agreement there must be a process through which employees can contest alleged bargaining agreement violations. The right to seek redress of grievances is one of the hallmark purposes of collective bargaining. This process is the grievance procedure, and it is a mandatory subject of bargaining, meaning that the employer and the union must bargain with each other on the matter. A good grievance procedure places a strict time limit on the filing of a grievance, contains few administrative hurdles, and requires management to provide answers in relatively brief periods of time. A good grievance procedure also covers all harassment or discrimination matters that might arise, including, but not limited to, Title VII claims. A typical grievance process begins with an employee informally complaining about a work issue. As an example, let’s use the grievance of an employee, Mr. A. At Mr. A’s place of employment, the opportunity to work overtime arises. Mr. A volunteers, but another employee is selected for the overtime work, meaning that Mr. A is denied the opportunity to work overtime. Mr. A believes that he should have been given the opportunity to work the overtime, based on the terms and conditions of the collective bargaining agreement. Under a typical grievance procedure, Mr. A will have 30 days to file a written grievance over this alleged wrong.

Mr. A takes his grievance to his union steward, explaining how he thinks he was improperly denied the chance to work overtime. The steward will listen to Mr. A, then examine the collective bargaining agreement. The steward will make a determination whether to proceed, deciding whether Mr. A has a legitimate grievance or has no grounds for complaining. If the steward thinks Mr. A has a legitimate complaint, he puts the grievance in writing, and the grievance moves to a meeting with the grievant (Mr. A), a union representative, and a manager (perhaps Mr. A’s direct supervisor). Typically, the manager will have a short time period from the date of the meeting to sustain or deny the grievance. If the grievance is sustained, Mr. A will be paid for the overtime he should have been allowed to work. If the grievance is denied, the union can decide whether to continue with the grievance.

In this instance, let’s say the grievance is denied and the union, following the grievance procedure, takes the matter to the Human Resources Department. Here, a more formal discussion is held. Again, the department will typically have a short time period to sustain or deny the grievance. If sustained, Mr. A will be paid for the overtime he did not get to work. If denied, the union can decide whether to proceed to the next level in the grievance process. Typically, this is a formal meeting with a vice-president or equally high corporate executive and a high-level union official, for instance, the business manager. This is the final opportunity for the parties to resolve the grievance before arbitration. If the grievance is denied, the union must decide whether it wants to advance the grievance to the next level—filing a demand for arbitration.

Arbitrator selection
If the union decides to file for arbitration, it will look to the parties’ collective bargaining agreement to see what service, if any, it must use for filing its demand. Most collective bargaining agreements proscribe the arbitration service with which the demand must be filed, and from where the arbitrator comes. Typically such a service is the American Arbitration Association or the Federal Mediation and Conciliation Service. (different contracts refer to different services depending upon past experience, costs, arbitrator availability, etc.) Those services, and others, maintain a body of well-qualified arbitrators ready to hear cases. The arbitration service will then provide each side with a list of arbitrators from which to select. When each party receives the list, they take time to research the arbitrators, reading and analyzing their previous arbitration decisions, and examining their work history, education, training, and any other matters they may find bearing on the subject. The procedure for selecting an arbitrator will more than likely be set forth in the collective bargaining agreement.

Pre-arbitration preparation
After the arbitration date is set, each side begins to prepare their case. Preparation can be relatively brief, or it can be very extensive, depending upon the complexity of the case, and who bears the burden. If the matter is one of contract arbitration (as is the case with Mr. A), the parties may need to examine previous agreements between the parties, whether there have been any variances to the contract, and research published arbitration decisions to see whether any such decisions help their arguments. Previous overtime assignments must be reviewed. Witnesses must be interviewed and prepared to testify. If the matter concerns discipline, the research will include the grievant’s prior disciplinary record (if any), as well as discipline meted out for similar transgressions.

The arbitration hearing
The arbitration will begin much the same way as a court proceeding. Both parties make opening statements, call and examine witnesses, and introduce evidence. Who puts on their case first depends upon who bears the burden of proof. Thus, staying with our example, Mr. A and his overtime grievance, the union will bear the burden of proof as this grievance is a matter of contract interpretation. Essentially, the union is contending that the employer interpreted the contract incorrectly and, therefore, must demonstrate as such. In a grievance over discipline (let’s pretend that Mr. A was disciplined for failing to work overtime), the employer bears the burden of proof and must establish there was “just cause” for disciplining the grievant.

Upon completion of the arbitration hearing, the parties will decide whether to file briefs or conclude with oral argument. Then, once the record is closed, the arbitrator reviews the evidence, testimony, and the collective bargaining agreement, considers the parties’ arguments and principles of arbitration, including, as examples, the bargaining agreement and the parties’ actual performance, and briefs (if any), then renders a decision. Depending upon the complexity of the case, the arbitrator’s decision is generally rendered within 60 to 90 days; if the matter is of an urgent nature, the parties’ can ask for the arbitrator’s decision orally, and wait for the written decision. After the written decision, and if the parties agree, the decision may be submitted for possible publication by one of several commercial publishers, either the U.S. Bureau of National Affairs (Labor Arbitration Reports), the Commerce Clearing House (Labor Arbitration Awards), or other sources. Fewer than 10 percent of arbitrations awards are published.

Whether to pursue an appeal
Almost all arbitrations are considered “binding “ or “final,” with the intent that the arbitrator’s decision is final. Indeed, were the decision not binding, what would be the point? Nevertheless, arbitration decisions can be appealed. However, the grounds for overturning an arbitration are few and difficult to meet. The contesting party must show that the award violates strong public policy, can in no way be read as arising from the terms and conditions of the parties’ collective bargaining agreement, or is the result of fraud. These exceptions are quite difficult to sustain, and it is usually not in a party’s best interest to appeal.

Interest arbitration
Before concluding, there is another kind of arbitration, called interest arbitration. Interest arbitration is where the arbitrator actually writes the terms and conditions of the parties’ agreement. It is often used in government labor relations settings (e.g., firefighters), where the union cannot go on strike, and the employer cannot lock out the employees, and therefore there is no economic way to avoid an impasse.

Many times, the parties in such a situation will reach an agreement on many terms and conditions, but cannot agree to the last few items. To bridge the impasse, the arbitrator conducts an arbitration—hearing witnesses, including lay and expert witnesses, and considers other evidence—regarding what the actual terms of the agreement should be. Following that, he or she renders an opinion that contains the actual contract language. If you are interested in greater detail on interest arbitration, please contact the authors.

Labor arbitration is the preferred method of dispute resolution in the collective bargaining environment. Its advantages are many, including faster time to hearing, fewer expenses, and the opportunity to influence the choice of decision-maker. The arbitration itself is similar to trial, including preparation, witness and exhibit introduction, the rendering of a decision, and the possibility of appeal. Labor arbitration plays a unique role in the American legal system, a role it plays quite well.

Take Arbitration Hearings Seriously
By Kevin Diamond 

If I hear one more attorney on cross-examination say “please tell the arbitrator what happened that day” I will puke. Do not test me, I will puke.

For those of you who have had the distinct pleasure of arbitrating a case against me, you likely have heard me say the following to the arbitrator at the hearing: “Mr./Ms. Arbitrator, while the evidence rules at an arbitration are relaxed, they are not to be thrown out the window.” Then you likely rolled your eyes at me. Yes, I saw you roll your eyes.

Some attorneys do not take arbitration hearings seriously enough, and often fail to put forth the effort this hearing deserves. It is important to keep in mind that very often this is essentially the trial–this is the only “day in court” you and your client may have. It is not a time set for an informal discussion about the merits of your case. Since a large percentage of cases resolve after the arbitration hearing, as opposed to proceeding to a trial de novo, this may be your only shot. Arbitrations are “to provide a simplified procedure for obtaining a prompt and equitable resolution of certain civil matters.” NAR 2(A). While arbitrators have authority “to relax all applicable rules of evidence and procedure,” rules of evidence are still to be followed. NAR 8(A)(2). NAR 8 should not prompt attorneys to relax their cases, or the presentation of their cases. As an attorney who has arbitrated many cases, and as an arbitrator, I would like to offer some guidance to assist in handling your cases at arbitration, and in taking arbitration hearings more seriously.

Prepare your witnesses
At the very least, let your witness know that this may be their only “day in court,” and perhaps their only opportunity to tell their side of the story. Your witness should be aware of how the hearing will proceed [so that they will not, for example, start to offer additional testimony during closing arguments]. They should also be adequately prepared for cross-examination questions. Many arbitrators ask questions of witnesses, and this should not throw your witness off.

Draft a solid, comprehensive arbitration brief
Generally arbitrators do not allow for opening statements. The brief will serve this purpose. Just as with hearing an opening statement, many arbitrators will lean one way or the other after reading the briefs, so this is a chance to really influence the decision. Stay away from templates. Avoid spending four pages explaining the definition of negligence. Also, if a cause of action, claim or defense has been waived or is not going to be argued, do not include it in the brief. Use headings and make concise arguments. Try to stay as factual as possible–you should expect [or hope] that the Arbitrator has a knowledge of the law. As such, your focus should be on applying the facts to the applicable law.

Use exhibits and enlargements
It is more helpful to include only the portions of exhibits that emphasize your arguments. You need not include every page of medical records, or an entire deposition transcript, if you do not need it. The arbitrator usually has the Rule 16.1 productions if he/she wants to review the records in their entirety. It also does not hurt to bring extra copies of color photographs and enlargements of exhibits, for emphasis. You need not spend much money here, since the people involved in the hearing will be sitting around a table–even an 11 x 17 enlargement will be helpful.

Be prepared with evidentiary issues
Be prepared to discuss any unique, significant evidentiary issues before the hearing. These do not arise very often, but if there is a crucial issue which may have a significant affect on the outcome, be prepared to address it.

Introduce documents in a timely manner
Do not attempt to introduce documents or disclose witnesses that were not disclosed in a timely manner per Rule 16.1. This will simply cause a delay and arguments. There is little chance an arbitrator will allow this “surprise” evidence to first be disclosed at the hearing.

Conduct a thorough direct examination of your witness
Yes, use open ended questions, and allow the arbitrator to “meet” your witness via some background information. This is especially important so that the arbitrator can judge credibility issues. Some counsel have their witnesses testify via telephone. I realize that this saves on expenses, especially for an out of town witness, but it severely limits an arbitrator’s ability to judge credibility. Allow your witness to fully explain their story, as opposed to asking that they simply “skip to the” important parts. This may make the hearing last longer, but will also allow your witness to feel more satisfied that they had a chance to explain their position/recollection to the arbitrator.

Prepare a cross-examination
Not to sound like Trial Practice 101, but please, please prepare a cross–examination, with questions that nail the witness down to a position. Do not ask open ended questions on cross-examination. There are typically only a few key issues that need to be addressed at an arbitration. Make sure each witness is locked into their position on each issue, to assist with your overall case argument. Just like at a trial, do not allow the witness to re-hash their direct examination testimony during your cross-examination. Also, this is not the time to conduct discovery and attempt to learn new information. It should not appear to the arbitrator that your client intends to file a de novo regardless of the outcome, but this is how it will seem if you use cross-examination for discovery purposes at the hearing.

Use objections sparingly
Objections should be made sparingly. However, as discussed above, if there is a crucial evidentiary issue with a significant impact on the case, make the objection.

Use closing argument
Use closing argument to sum up your case’s strong points. Some attorneys ask if their clients can be excused before closing arguments. I believe it is better for them to remain for closings. The arbitrator can watch their reaction to arguments, and counsel can show their clients that they are fighting for them. Also, do not use this time to take jabs at opposing counsel.

Be professional
Be careful of informality with the arbitrator and counsel. Even if you know everyone on a first name basis, the proceeding will be taken more seriously by all involved, including your client, if you try not to use first names or talk to the arbitrator about whether he/she caught Survivor last night. If the above makes an arbitration hearing sound like a “mini trial,” good. That’s how arbitration hearings should be handled. Seriously.

Kevin Diamond grew up in Las Vegas and is a civil litigation attorney at Thorndal, Armstrong, Delk, Balkenbush & Eisinger. He also serves as an Arbitrator, Short Trial Judge, and Mediator.