Labor Law Arbitration Analysis

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Table of Contents

Introduction
History of Arbitration
Interest Arbitration
Grievance Arbitration
Difference of Interest and Grievance Arbitrations
Conclusion
Reference List

Introduction

Arbitration in relation to the United States of America law is considered as an alternative means of resolving disputes, rather than the use of legal litigation. Arbitration gives the parties involved in a dispute a chance to submit complains to a neutral third party. Parties opt to resolve their indifferences through the arbitration process due to some of the weaknesses that are associated with current judicial systems such as being considered as very expensive, slow and often biased. In some regions that do not have formal law, arbitration is taken as the next substitute means of resolving disputes. Arbitration has been noted as being a very effective optional to strikes as a process of resolving disagreements. There are two forms of labor arbitration which are; the interest arbitration and grievance arbitration. Interest arbitration acts as a platform that disputing parties use to solve their disagreements pertaining to the terms to be included in a new contract. On the other hand, grievances arbitration provides a method that enables disputing parties to resolve their indifferences by helping them interpret and apply collective bargaining agreement. Labor arbitration has been used in the United States for more than a century. The discussion that follows highlights the history of the labor arbitration in the United States. It also demonstrates the difference and functions of the two types of labor arbitration, interest and grievance.

History of Arbitration

There are various forms of arbitration which include international, commercial, grievances and interest arbitration. International arbitration is used to settle disputes between two nations so that to prevent war and thus help to achieve world peace. Commercial arbitration is considered as the oldest of all and was/is used to resolve disputes between national and international firms. The grievance and interest arbitrations came later on when it was realized that there was a need to have some alternative means of solving disputes and mostly for the welfare of the workforce. This was considered important so that to ensure existence of a motivated workforce and avoid occurrence of low morale which may decrease productivity. In united State Unionization, it has been noted that the number of collective bargaining agreements that contain arbitration as the form of settling disputes have greatly risen. This has been associated with the high efficiency that is associated with arbitration as the means of solving disputes. For example, by 1944 the Bureau of statistics reported that 73% of entire United States labor contracts contained arbitration clauses. The success of the arbitration as the alternative means of settling disputes cannot be undermined since in the 1980 the same body revealed that those contracts in United State that contained arbitration clauses had increased from 73% to 95%. Nowadays, 98% of all labor contracts in United States contain the arbitration clause. The federal government has supported the arbitration as an option method in resolving disputes for its excellence performance in dispute solving. Instances that indicate preference of arbitration by the government is the enacting of the Interstate act in 1887 and also the passing of Federal Arbitration Act in 1925 and finally the passing of Civil Rights Acts in 1991 that encouraged the use of arbitration in assisting in the interpretation of indiscrimination laws(Massey, 2011).

Interest Arbitration

Interest arbitration was introduced in U.S. as a strategy to stop employees strikes. Since its establishment, it has been very effective in the realization of its objective. Final offer arbitration and tradition arbitration are the two models that are used in interest arbitration in U.S. In final offer arbitration, the third party who is neutral tries to bring consensus between the disputing factions by selecting one of the two parties offer (Fletcher, 2010). This form of arbitration can either be solved wholesomely or issue-by-issue. The third party picks all the contract terms of one of the party for total package final offer arbitration. In the other case of issue-to-issue arbitration, the third party may pick some issues proposed by one party and also picks others offered by the other party as a solution to a different scenario. Tradition interest arbitration is the model that allows the arbitrator to give contract term that is in between the terms proposed by the parties. Despite the success associated with the interest arbitration in resolving contracting bargain disputes, it has been noted to have a weakness in its inability to being flexible and allow the disputing parties adapt the novel solutions. Similarly, it has been criticized for being rigid because it only concentrates on the process alone and thus hinders parties to bargain sincerely. The presence of the interest arbitration has been noted to favor the bargaining power of public sector unions. This is because unions have more to profit than what public employers gain. This is as the result the public employers being considered less likely to yield control to the neutral party. Similarly, when it assumes political power, its members are often known to favor any propositions of reducing taxations. Interest arbitration should avoid instances where the offer awarded is determined or approximated by the neutral party. The problem with this type of resolving the dispute is that the solution is not left to be made by the political power, but is determined basing on the strength of the unions legal arguments (Kersey & Sherk, 2007).

Grievance Arbitration

Prior to 1930, arbitration was used as a preventive tool against strikes in America and particularly through negotiations. Arbitration became more common in America after 1930 due to increased industrialization and unionization and after enacting the National Labor Relation Act in 1935. Grievances arbitration was adapted as an alternative means of resolving conflict in US in 1945. Grievance attribution was adapted as the best method of resolving workforce disputes after the American government realized that interest attributions were not adequate solve all to work related disputes issues. This was evident after USA witnessed some interruptions of supply of some steel materials and war materials during World War II due to continued strikes, despite interest arbitration interventions. Therefore, Roosevelt recommended the inclusion of grievances attribution clauses into collective bargaining as the final verdict to avoid future such occurrences. The American Attribution Association is one of the most famous grievance attribution organization with more than 800 employees in 35 offices globally and representing more than 8,000 arbitrators and mediators globally. The success of arbitration is clear since In 2010 it resolved 23. Nowadays, the grievance arbitration is expanding its services beyond the industrial relations. For example, in 1996 arbitration was employed for Olympic athletes as a condition for qualifying to take part in the Olympic exercise. Many arbitration proponents argue that arbitration organizations should take over from the judicial system the duty of solving disputes that relates to divorce, wills, property disputes and the court be left to concentrate on criminal cases. It is estimated that over 70,000 grievances case are ruled by arbitrators annually in United State and less than 1.5% of these cases are the one that end up to court (Saltzman, 2010).

Difference of Interest and Grievance Arbitrations

The differences between the interest arbitration and grievances arbitration is that whereas interest arbitration acts as a platform that disputing parties use to solve their disagreements pertaining to the terms to be included in a new contract, the latter provides a method that enables disputing parties to resolve their indifferences by helping them interpret and apply collective bargaining agreement. In summary, interest arbitration is used for bargaining purposes, while grievances arbitration is used for resolving disputes that arises due to differences in the interpretations of the contract (Zulu, 2011).

Conclusion

The use of arbitration as an alternative means of resolving disputes have greatly been effective in United State of America. Both the interest and grievances arbitrations have helped the country prevent occurrences of strikes in US like the one witnessed in 1945, where the employees who were working in the steel companies went on strike and caused a disruption in the supply of war materials. The uses of these arbitration processes have greatly boosted efficiency in industries in United States since nowadays companies do not get work disruptions due to strikes.

Reference List

Fletcher, J. (2010).Interest Arbitration. Web.

Kersey, P. & Sherk J. (2007).Interest Arbitration: Risky for Unions and Employers. Web.

Massey, R. (2011).History of Arbitration and Grievance Arbitration in the United States. Web.

Saltzman, G. (2010).Decision-Making Principles of Labor Arbitrators in College and University Grievance Cases. Web.

Zulu, R. (2011).The Effect of Interest Arbitration on Fire Fighter Wage Increases: Evaluating Michigans Act 312. Web.

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