1. PowerPoint Presentation by Charlie Cook The University of West Alabama Copyright © 2009 Cengage Learning. All rights reserved. Labor and Employment Arbitration Chapter 11

2. © 2008 Cengage Learning. All rights reserved.11–2 Development of Labor Arbitration 1865 to World War II1865 to World War II  Arbitration was first used in 1865.  Executive Order 9017 established National War Labor Board (NWLB), which used arbitration to avoid strikes in war materials production plants during WWII.  Arbitrator’s decisions could be ignored at will. The Postwar YearsThe Postwar Years  Lincoln Mills case (1957)  An aggrieved party could sue a party that refused to arbitrate a labor dispute for violation of the labor agreement under Section 301 of the LMRA.

3. © 2008 Cengage Learning. All rights reserved.11–3 Development of Labor Arbitration (cont’d) The Steelworkers’ Trilogy DecisionsThe Steelworkers’ Trilogy Decisions  Arbitrators, not courts, decide whether the grievance is arbitrable.  The courts recognize arbitrators’ knowledge of the common law of the shop in deferring to arbitration.  Arbitrators have no obligation to the court to give their reasons for an award.  Courts only decide if grievance should be submitted to arbitration when there is disputed language in the labor contract.

4. © 2008 Cengage Learning. All rights reserved.11–4 Legal Obligations to Arbitrate and Enforce Arbitration Decisions Continuing Rights Under a Labor ContractContinuing Rights Under a Labor Contract  Successor employers can be required to arbitrate a preexisting grievance.  Grievances arising prior to the termination of a labor agreement can be arbitrated. Boys Market DecisionBoys Market Decision  Parties to a labor contract must use the contractually specified arbitration procedure.

5. © 2008 Cengage Learning. All rights reserved.11–5 Selection of an Arbitrator Securing listings of arbitratorsSecuring listings of arbitrators  Federal Mediation and Conciliation Service (FMCS)  American Arbitration Association (AAA)  State and local agencies Selection proceduresSelection procedures  Striking method: eliminating names from a list until one arbitrator’s name remains.  Striking and ranking: eliminating names from a list and selecting the highest-ranked remaining name.  Requesting a direct appointment.

6. © 2008 Cengage Learning. All rights reserved.11–6 Types of Arbitrators Permanent Arbitrator or UmpirePermanent Arbitrator or Umpire  An arbitrator who will resolve all disputes during the life of a labor agreement.  Permanent status allows the arbitrator to become intimately knowledgeable about the industry, the company, and the union. Ad Hoc ArbitratorAd Hoc Arbitrator  The arbitrator is selected on a case-by-case basis, providing flexibility in the use of different arbitrators in addressing specific grievance issues.

7. © 2008 Cengage Learning. All rights reserved.11–7 Exhibit 11.1Profile of Members of the National Academy of Arbitration and Arbitration Data (462 responses from 600 members) SOURCE: Michel Picher,Ronald Seeber, and David B. Lipsky, The Arbitration Profession in Transition, Ithaca, NY: Cornell/PERC Institute of Conflict Resolution, 2000, pp. 11–28; updated from http://www.fmcs.gov (accessed January 9, 2004).

8. © 2008 Cengage Learning. All rights reserved.11–8 Arbitration Procedures Prehearing ActivitiesPrehearing Activities  Prehearing Stipulations  Joint union-management statements as to the issues involved and certain applicable grievance “facts” The Arbitration HearingThe Arbitration Hearing  Averages one day in length  Formats:  Informal quasi-litigation (legalistic approach)  Formal, ongoing collective bargaining (problem-solving approach)

9. © 2008 Cengage Learning. All rights reserved.11–9 Exhibit 11.2Behavioral Examples of Legalistic Versus Problem-Solving Approaches Legalistic ApproachProblem-Solving Approach Drafting the statement of the issue in such a way that there is a definite winner and a definite loser. Looking for restrictions on the arbitrator’s authority to hear issues not expressly stated in the written grievance. Insisting on a specific burden of proof at the beginning of the hearing (preponderance of evidence, clear and convincing evidence, or beyond a reasonable doubt). Harsh and aggressive (eat ’em alive) cross- examining in an attempt to destroy witness credibility. Objecting to any form of hearsay evidence. Noting for the record objections to certain types of evidence, even though the arbitrator has allowed the evidence to be introduced. Acknowledging that the parties have a mutual obligation to bring out all relevant facts. Citing custom and/or practice of the parties. Arguing that the arbitrator should interpret provisions of the collective bargaining agreement in such a way that it will be reasonable and equitable to both parties. Stipulating certain facts where the parties have no dispute. Asking questions that call for a narrative answer, for example, asking the witness to tell the story about what happened in her own words. Asking only a few nonthreatening questions on cross-examination. Using friendly and dignified behavior toward the opposite party. SOURCE: Adapted from Richard A. Posthuma and Maris Stella Swift, ‘‘Legalistic vs. Facilitative Approaches to Arbitration: Strengths and Weaknesses,’’ Labor Law Journal, 52 (Fall 2001), pp. 181–182.

10. © 2008 Cengage Learning. All rights reserved.11–10 Arbitration Procedures (cont’d) The Arbitration Hearing—Order of BusinessThe Arbitration Hearing—Order of Business  Introduction of joint exhibits  Contract in question  Copies of grievance and responses  Stipulated facts  Arbitrator’s framing of the issue  Presentation of exhibits (joint, company, and union)  Opening statements (company and union)  Testimony and cross examination of witnesses  Summaries and closing statements or posthearing briefs

11. © 2008 Cengage Learning. All rights reserved.11–11 Arbitration Procedures (cont’d) Elements of Posthearing BriefsElements of Posthearing Briefs  Statement of the facts of the case  Citation of the relevant contract language  Arguments in support of the party’s position  Arguments countering the opposing party’s position  The requested decision from the arbitrator

12. © 2008 Cengage Learning. All rights reserved.11–12 Exhibit 11.3Advantages of Labor Arbitration over Litigation 1.The parties themselves can potentially save money and time because there are fewer legal procedures, less discovery, and fewer appeals. Also, the parties are able to select the arbitrator and set up the hearing instead of waiting for the court to schedule a hearing. The parties can also require a decision by the arbitrator in 30 to 60 days. 2.Parties select an arbitrator who has expertise in labor–management relations as opposed to a judge assigned to the case who may or may not have any experience in labor–management relations. 3.Arbitration is a system of self-government in which the parties design the rules and procedures: how the arbitrator is selected, how many arbitrators, the authority of the arbitrator, and the like. 4.The parties negotiate and agree to the terms of their collective-bargaining agreement as opposed to a law enacted by a legislative body. 5.Labor arbitration is a private process between the union and the company as opposed to a public tribunal with a public record; the arbitrator’s decision may be published only with the consent of both parties. SOURCE: Adapted from Elkouri & Elkouri How Arbitration Works, 5th ed., eds. Marlin M. Volz and Edward P. Goggin (Washington, D.C. Bureau of National Affairs, 1985), pp. 10–15.

13. © 2008 Cengage Learning. All rights reserved.11–13 Comparison of Arbitration and Judicial Proceedings Arbitration Judicial Proceedings Principle of Stare Decisis Liberal Admission of Evidence Formal Rules of Evidence Common Law of the Shop

14. © 2008 Cengage Learning. All rights reserved.11–14 Exhibit 11.4Survey of Arbitrators’ Consideration of Conflicting Medical Opinions SOURCE: Daniel F. Jennings and A. Dale Allen, Jr., ‘‘Arbitration and Medical Evidence: A Longitudinal Analysis,’’ Labor Law Journal (June 1994), p. 352. Reprinted by permission of Daniel F. Jennings.

15. © 2008 Cengage Learning. All rights reserved.11–15 The Arbitrator’s Decision Components of the DecisionComponents of the Decision  Names of those involved in the case, along with others who gave testimony  A statement of the issue(s)  A statement of the facts surrounding the grievance  Pertinent provisions of the labor agreement  A summary of management and union contentions  An analysis of the evidence and arguments in relation to the contract language  The arbitrator’s decision (grievance upheld, grievance denied, or a compromise)

16. © 2008 Cengage Learning. All rights reserved.11–16 Decision-Making Criteria Used by Arbitrators Past practices Provisions of the labor agreement Award Decision Criteria Burden of proof, witness credibility, and cross-examination Intent of the parties Previous arbitration awards

17. © 2008 Cengage Learning. All rights reserved.11–17 Expedited Arbitration Procedures Prehearing ProceduresPrehearing Procedures  Appointing a panel of arbitrators  Appointing a permanent umpire Posthearing ProceduresPosthearing Procedures  Setting a deadline for return of the award  Reducing or eliminating the number of citings  Setting a maximum for the length of the award statement  Establishing a maximum to be paid for the decision

18. © 2008 Cengage Learning. All rights reserved.11–18 Current Issues Affecting Arbitration: Legal Jurisdiction Labor Arbitration and EEOCLabor Arbitration and EEOC  Alexander v. Gardner-Denver Company case  Arbitrators’ expertise is limited to labor agreements, not federal civil rights laws.  Minority employees can pursue both arbitration and the judicial process. Labor Arbitration and the NLRBLabor Arbitration and the NLRB  Spielberg Manufacturing Company case  The NLRB defers to the arbitration policy in settling labor disputes.

19. © 2008 Cengage Learning. All rights reserved.11–19 Current Issues Affecting Arbitration: Legal Jurisdiction (cont’d) Labor Arbitration and the NLRB (cont’d)Labor Arbitration and the NLRB (cont’d)  Collyer case  Related disputes can be better resolved through the special skills and experiences of the arbitrators.  The objectives of the NLRA--industrial peace and stability-- can be met by adherence to arbitration procedures.  An employee is obliged to use the labor agreement’s arbitration process before the NLRB will review the case.  Olin Corporation and United Technologies cases  Parallel contractual and ULP issues may be considered together.

20. © 2008 Cengage Learning. All rights reserved.11–20 Current Issues Affecting Arbitration: Legal Jurisdiction (cont’d) Labor Arbitration, the Courts, and Public PolicyLabor Arbitration, the Courts, and Public Policy  Misco case  A management decision is based on facts known at the time of the decision and cannot be supported by later-revealed facts.  However, the court may not enforce a labor agreement that is contrary to an “explicit” public policy.

21. © 2008 Cengage Learning. All rights reserved.11–21 Current Issues Affecting Arbitration: Legal Jurisdiction (cont’d) Employment ArbitrationEmployment Arbitration  Gilmer v. Interstate Johnson Lang Corp case  The use of mandatory arbitration of civil rights does not violate the Age Discrimination in Employment Act.  Wright case  If contract language does not clearly waiver employee rights, then the employee can file a federal court suit.  Circuit City Stores v. Adams case  The Supreme Court reaffirmed its support of arbitration in resolving labor disputes.  EEOC is still empowered to sue on behalf of employees.

22. © 2008 Cengage Learning. All rights reserved.11–22 Current Issues Affecting Arbitration: Legal Jurisdiction (cont’d) Employment Arbitration (cont’d)Employment Arbitration (cont’d)  EEOC v. Waffle House, Inc.  Employee’s agreement to arbitrate does not preclude the EEOC from suing the employer on behalf of the employee in order to enforce the Equal Employment Opportunity Act.

23. © 2008 Cengage Learning. All rights reserved.11–23 Exhibit 11.7An Employment Application Form under Mandatory Employment Arbitration I agree that I will settle any and all previously unasserted claims, disputes or controversies arising out of or relating to my application or candidacy for employment, employment and or cessation of employment with XYZ Company, exclusively by final and binding arbitration before a neutral arbitrator. By way of example only, such claims include claims under federal, state, and local statutory or common law, such Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, including the amendments of the Civil Rights Act of 1991, the American With Disabilities Act, the law of contracts and the law of tort. SOURCE: Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001).

24. © 2008 Cengage Learning. All rights reserved.11–24 Criticisms of Mandatory Employment Arbitration Mandatory Employment Arbitration Public Policy Implications Payments to Arbitrators Repeat Players Arbitral Deficiencies

25. © 2008 Cengage Learning. All rights reserved.11–25 Exhibit 11.8Guidelines to Procedural Fairness in Arbitrating Statutory Discrimination Claims Parties knowingly and voluntarily agree to submit their claim to arbitration. Arbitration agreement which contains specific language with sufficient notice that signing the agreement represents an agreement to arbitrate all statutory employment discrimination claims (with inclusion of a representative list of employment discrimination statutes for illustrative purposes). Pre-hearing consultation to address formulation of issues, production of evidence witnesses lists, discovery, and application of rules of evidence. Due process procedures that provide that the employee has a right of representation of his/her choosing, and equate discovery of access to all information relevant to the employee claim, arbitrator authority to subpoena relevant information upon a specific request by one of the parties, and a reasonably timely hearing.

26. © 2008 Cengage Learning. All rights reserved.11–26 Exhibit 11.8Guidelines to Procedural Fairness in Arbitrating Statutory Discrimination Claims (cont’d) Impartial and competent arbitrator who possesses personal qualities of honesty and integrity, discloses any prior association that might represent a potential conflict. Joint selection of the arbitrator with each party having adequate information about the potential arbitrators or organizational associations, biographical data, published case decisions, copies of recent decisions, etc. to avoid the “advantage to the repeat player” in the arbitration process. Written opinions and awards that would include the issues decided, the findings of facts, conclusion of law, materials supplied by the parties and information, such as relevant decisions of courts and administrative agencies, presented by the parties, arbitrator reasoning in reaching the decisions the remedy sought and the remedy decided.

27. © 2008 Cengage Learning. All rights reserved.11–27 Exhibit 11.8Guidelines to Procedural Fairness in Arbitrating Statutory Discrimination Claims (cont’d) Publication of the decisions with the consent of the prevailing party to serve as a deterrent to future similar discriminatory acts. Payment of the costs of arbitration shared by the parties to insure impartiality and based on the employee’s ability to pay and the relevant and necessity of incurred expense for adequate presentation of the employee’s case.

28. © 2008 Cengage Learning. All rights reserved.11–28 Exhibit 11.9Differences between Employment Arbitration, Labor Arbitration, and Jurors Involving an Employee Discharge SOURCE: Ideas from Brian S. Klass, Douglas Mahony, and Hoyt N. Wheeler, ‘‘Decision-Making about Workplace Disputes: A Policy Capturing Study of Employment Arbitrators, Labor Arbitrators and Jurors,’’ Industrial Relations, Vol. 45, No. 12 (2006): 68–95.

29. © 2008 Cengage Learning. All rights reserved.11–29 Key Terms National War Labor Board (NWLB)National War Labor Board (NWLB) Steelworkers’ TrilogySteelworkers’ Trilogy Permanent arbitratorPermanent arbitrator Ad hoc arbitratorAd hoc arbitrator Arbitration hearingArbitration hearing Common law of the shopCommon law of the shop Self-governmentSelf-government Parole evidence ruleParole evidence rule Intent of the partiesIntent of the parties Past practicePast practice Employment arbitrationEmployment arbitration