Grievance Arbitration This chapter covers the procedure used to render a decision about the merits of a grievance when the parties cannot reach agreement. Arbitra- tion is not solely a labor relations process, and within labor relations it does not deal solely with grievances. The chapter covers the definition of arbitration, its legal place in labor relations, the process itself, difficul- ties associated with its practice, and results associated with arbitration of employee discharge and discipline cases.
In reading this chapter, consider the following questions:
1. How have the Supreme Court’s decisions influenced the application and practice of arbitration?
2. How has the NLRB aided or interfered with arbitration? 3. What procedures are used during arbitration? 4. What problems do critics of arbitration point out?
WHAT IS ARBITRATION?
Arbitration is a quasi-judicial process in which parties agree to submit unresolved disputes to a neutral third party for binding settlement. Both parties submit their positions, and the arbitrator decides what each party is entitled to. This chapter is concerned with labor arbitration, but the method is also applied to disputes between buyers and sellers, contrac- tors and real estate developers, stockbrokers and customers, and doctors and patients.
Two major topics of labor arbitration involve interest and rights . This chap- ter is primarily concerned with rights arbitration. Chapter 16 covers interest arbitration, which is primarily applied in the public sector. The Supreme Court distinguished between interest and rights arbitration this way:
[Interest arbitration] relates to disputes over the formation of collective agreements or efforts to secure them. They arise where there is no such agreement or where it is sought to change the terms of one, and therefore the issue is not whether an existing agreement controls the controversy. They look to the acquisition of rights for the future, not to assertion of rights claimed to have vested in the past.
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[Rights arbitration], however, contemplates the existence of a collective agreement already concluded or, at any rate, a situation in which no effort is made to bring about a formal change in terms or to create a new one. The dispute relates either to the meaning or proper application of a particular provision with reference to a specific situation or to an omitted case. In the latter event the claim is founded upon some incident of the employment relation, or asserted one, independent of those covered by the collective agreement. In either case the claim is to rights accrued, not merely to have new ones created for the future. 1
Thus, rights arbitration applies to interpreting and applying terms of an existing contract, and interest arbitration decides unresolved future issues.
DEVELOPMENT OF ARBITRATION
The Knights of Labor preferred arbitration for resolving interest differ- ences but was never able to use it. In 1925 Congress passed the Arbitration Act establishing the right of parties to a contract to specify the processes to be used to resolve disputes over the interpretation or implementation of the contract. There is no legal requirement to arbitrate private sector labor disputes. However, during World War II the National War Labor Board required that labor contracts provide for arbitration of intracontract disputes. 2 Beginning in 1957, NLRB and Supreme Court decisions have defined and expanded the role of rights arbitration.
Lincoln Mills Lincoln Mills established arbitration as the final forum for contract dis- putes. 3 In Lincoln Mills , the Supreme Court held that Section 301 of the Taft-Hartley Act required that federal courts enforce collective bargaining agreements, including provisions for arbitrating future grievances. If the contract called for arbitration and if the court agreed with the arbitrator, the award would be enforced by the court if either party failed to comply with it.
Steelworkers’ Trilogy In 1960 the Supreme Court ruled on the legitimacy and finality of rights arbitration for settling intracontract disputes. 4 The Court ruled that arbi- trators’ decisions were essentially not subject to judicial review, and it laid down three basic protections for arbitration. First, contractual arbitration
1 Elgin, Joliet & Eastern Railway Co. v. Burley, 325 U.S. 711 (1945). 2 F. Elkouri and E. A. Elkouri, How Arbitration Works, 3rd ed. (Washington, DC: Bureau of National Affairs, 1973), p. 15. 3 Textile Workers Union v. Lincoln Mills, 355 U.S. 448 (1957). 4 United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574; United Steelworkers of America v. Enterprise Wheel and Car Corp., 363 U.S. 593; and United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564 (1960).
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clauses require that parties arbitrate unresolved grievances. Second, the substance of grievances and their arbitrability are to be determined by arbitrators, not courts. And third, if an arbitration clause exists, unless a dispute is clearly outside contract provisions, courts will order arbitra- tion. The decisions state that labor arbitrators are presumed to have spe- cial competence in labor relations and are thus better able than courts to resolve labor disputes.
In the Warrior and Gulf case, the Court held that if a contract includes a broad arbitration clause, a dispute not covered in other sections is still arbi- trable. In this case, the employer subcontracted work while its employees were in a partial-layoff status. While lower courts held subcontracting to be a potential management right, the Supreme Court held that the broad arbitration agreement, coupled with the no-strike provision, brought the dispute within the arbitral arena.
The American Manufacturing case involved an employee who became disabled and accepted workers’ compensation. Later, his doctor certified his ability to return to work, but the company refused to reinstate him. He grieved, but the company refused to process the grievance, claiming it was frivolous. The Supreme Court ordered arbitration.
Enterprise Wheel involved several employees who had been fired for walking out in protest when another employee was fired. After the com- pany refused to arbitrate the discharge grievances, a federal district court ordered arbitration. The arbitrator reinstated the employees with back pay for all but 10 days’ lost time. The award was rendered five days after the contract expired, but the Supreme Court ordered compliance.
The trilogy decisions enable arbitrators to decide whether disputes are arbitrable and, if they are, to render awards, free from judicial intervention. 5 When companies or unions have gone to court over arbi- tration procedures or awards, courts most often compel arbitration if a party has tried to avoid it or they enforce awards if awards haven’t been implemented. Less than 1 percent of cases end up in court. About a quarter of postarbitration appeals succeed. 6
The Steelworkers’ trilogy protects a union’s right to insist on arbitra- tion and to have awards enforced without court review. But could man- agement also expect similar treatment if it agreed to arbitrate, received a favorable award, and was struck to prevent enforcement (given that the Norris-LaGuardia Act prevents federal courts from enjoining most union activities, including strikes for any purpose as long as they do not threaten life or property)?
5 R. A. Smith and D. L. Jones, “The Supreme Court and Labor Dispute Arbitration,” Michigan Law Review, 63 (1965), p. 761. 6 P. Feuille and M. LeRoy, “Grievance Arbitration Appeals in the Federal Courts: Facts and Figures,” Arbitration Journal, 45, no. 1 (1990), pp. 35–47; M. H. LeRoy and P. Feuille, “The Steelworkers Trilogy and Grievance Arbitration Appeals: How the Federal Courts Respond,” Industrial Relations Law Journal, 13 (1991), pp. 78–120.
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The 1962 Trilogy The 1962 trilogy involves the requirement for arbitrating damages for violating a no-strike clause rather than taking the disputes directly to the federal courts. 7 The Drake decision held that management should request arbitration, when a no-strike clause exists, to determine whether the con- tract has been violated. In the Sinclair cases, the Court held that the federal courts could not enjoin a strike in violation of a no-strike clause because the Norris-LaGuardia Act prevented injunctions against labor activities.
The decision in Sinclair v. Atkinson calls into question the utility of no-strike clauses for employers. Without court enforcement of no-strike clauses, a strike over an arbitrator’s adverse award, or striking rather than using the grievance procedure, could not be enjoined. In a 1970 reversal, the Supreme Court held that a strike in violation of a no-strike clause before arbitration is enjoinable if the company is willing to arbitrate the dispute. 8
Additional Supreme Court Decisions on Arbitration in Unionized Firms Three cases involving arbitration procedures and awards modified and reaffirmed the basics of the Steelworkers’ trilogy. In the first case, the company and the union couldn’t agree on whether the disputed situation involved the contract. The union argued the decision should be made by the arbitrator after appointment, while the company maintained arbitra- bility should be up to the courts. The Supreme Court agreed with the com- pany and declared the courts ultimately are responsible for deciding the arbitrability of contract disputes. This doesn’t mean that an arbitrator can’t rule on arbitrability; it means that a decision is subject to court review. If a dispute exists, a party can petition the courts to decide arbitrability before the case is heard. 9
In the second case an arbitrator had reinstated an employee fired for smoking marijuana. The company appealed the decision, which was overturned in court as inconsistent with public policy on drug use. The Supreme Court reversed, however, holding that in the absence of fraud or dishonesty, courts may not review a decision on its merits, or for errors of fact, or for possible contract misinterpretations. Further, to overturn an award on the basis of public policy, the court must show that the policy is well defined, dominates the interests of the employee or employer, and has a history of laws and legal precedents to support it. 10 A later Supreme Court decision continued this logic. An arbitrator restored a truck driver
7 Sinclair Refining Co. v. Atkinson, 370 U.S. 195 (1962); Atkinson v. Sinclair Refining Co., 370 U.S. 238 (1962); and Drake Bakeries v. Local 50, 370 U.S. 254 (1962). 8 Boys Markets, Inc. v. Retail Clerks Union Local 770, 398 U.S. 235 (1970). 9 AT&T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643 (1986). 10 United Paperworkers International Union, AFL-CIO v. Misco, Inc., 484 U.S. 29 (1987).
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to duty who had twice tested positive for marijuana use. The award included a last chance agreement provision. The Court held the ruling did not conflict with the requirements of the Omnibus Employee Testing Act of 1991. 11
The third case held that where a contract has expired and the employer takes a unilateral action (e.g., a layoff) that had no history under the expired contract, the employer cannot be compelled to arbitrate a griev- ance where a renewal has not been negotiated. 12
NLRB Deferral to Arbi tration Occasionally, a dispute involves both a grievance and an unfair labor practice (ULP) charge. For example, bargaining-unit members might claim certain work has been given to nonunion employees outside the bargain- ing unit. The grievance would allege a violation of the contract on work assignments, and the union might charge the employer with discrimina- tion based on union membership. To prevent “forum shopping” and to reduce its caseload, the NLRB has adopted rules for deferring to arbitra- tion when a contract violation and a ULP are alleged simultaneously.
In developing its policy, the NLRB first held that where a grievance also alleged a ULP and the arbitration award had been adverse to, say, the union, the union could not then pursue the ULP. 13 The board decreed it would defer to arbitral awards if the parties had agreed in the contract to be bound by the decisions, the proceedings were fair and regular, and the results were consistent with the provisions of the labor acts.
In 1971, the NLRB decided to defer pending ULP-charge hearings until arbitration was completed, as long as the process was consistent with Spielberg . 14 In 1977, the NLRB partially retreated from the Collyer doctrine by limiting deferral to cases where the alleged ULP is not a Section 7 employee rights violation. 15 Ironically, a study of several cases where the board deferred to arbitration in 1977 and 1978 in the Detroit region found that arbitrator decisions on ULPs involving violation of Section 7 rights were seldom incompatible with board decisions, while refusals to bargain ULP decisions were frequently incompatible. Unions frequently received more favorable treatment from arbitrators than they would have before the NLRB. 16 In 1984, the board extended deferral to arbitration awards unless the decision was “palpably wrong.” 17 The NLRB declared it would 11 Eastern Associated Coal Co. v. United Mine Workers of America, 531 U.S. 57 (2000). 12 Litton Financial Printing Division v. NLRB, 501 U.S. 190 (1991). 13 Spielberg Manufacturing Co., 112 NLRB 1080 (1955). 14 Collyer Insulated Wire Co., 192 NLRB 150 (1971). 15 Roy Robinson Chevrolet, 228 NLRB 103 (1977); General American Transportation Corporation, 228 NLRB 102 (1977). 16 B. W. Wolkinson, “The Impact of the Collyer Policy of Deferral: An Empirical Study,” Industrial and Labor Relations Review, 38 (1985), pp. 377–391. 17 Olin Corporation, 268 NLRB 574 (1984).
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defer to arbitration if the arbitrator had adequately considered the alleged ULP and contractual and ULP issues were essentially parallel. Even before Olin , regional directors of the NLRB deferred about 90 percent of cases alleging ULPs. Following Olin, this rate increased even though appeals courts have not enforced cases similar to Olin . 18
Exceptions to Deferral Although the Supreme Court upheld the finality of arbitration in contract disputes, and the NLRB allowed arbitrators to decide cases simultane- ously alleging violations of federal labor relations law and the contract, there are limits on deferral. 19 Individual rights granted under other statu- tory employment laws cannot be decided in a collectively bargained arbi- tral procedure if a party objects to the outcome. Thus, if the grievant is dissatisfied with an arbitrator’s ruling, the case could be started again by complaining to the appropriate federal compliance agency.
In Alexander , an African-American maintenance employee bid on a skilled job. After being promoted, he was warned that his performance in the skilled job was substandard. After completing the probationary period (and the expiration of his right to revert to his former position), Alexander was terminated. He charged his termination was racially motivated. How- ever, the arbitrator ruled it had been performance-motivated and upheld the decision.
Alexander complained to the Equal Employment Opportunity Com- mission (EEOC). Early in the process, the company refused conciliation because the arbitrator had ruled in its favor. The district court dismissed the suit because the contract had an EEO clause and an arbitrator had ruled. At its ultimate appeal, the Supreme Court ruled that an arbi- tral award in a grievance involving a statutory claim could not receive automatic deference and remanded the case. On remand, the district court determined that Alexander had been discharged for performance reasons.
Employers and unions might still arbitrate discrimination cases if a grievance alleged a violation of both contract and law. Appropriate proce- dure would require that a single grievant alleges discrimination and is not arguing that the contract is discriminatory. Individuals would be entitled to their own lawyers and a transcript would be kept. Arbitrators would be required to render written awards. Thus, courts might be willing to defer on a case-by-case basis because the procedure would meet the suggested requirements in Alexander . 20
18 P. A. Greenfield, “The NLRB’s Deferral to Arbitration before and after Olin: An Empirical Analysis,” Industrial and Labor Relations Review, 42 (1988), pp. 34–49. 19 Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974); and Barrentine v. Arkansas-Best Freight System, 450 U.S. 728 (1981). 20 H. T. Edwards, “Arbitration as an Alternative in Equal Employment Disputes,” Arbitration Journal, 33, no. 12, (1978), pp. 23–27.
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In 1998 the Supreme Court considered another case involving a dis- crimination grievance. 21 The contract had a broad arbitration clause, but it did not refer specifically to statutory claims. The Court held that in the absence of specific provisions that statutory claims would be covered by the arbitration clause, arbitration cannot be compelled. 22
In some public sector situations, employees are subject to both the labor agreement and rules of administrative agencies. The Supreme Court requires that arbitrators apply the same standards as administrative bod- ies in deciding employee performance cases. 23 This prevents the grievant from shopping for the most hospitable forum.
In this section we examine the prearbitration processes, arbitrator selec- tion, conduct of the arbitration hearing, preparing and rendering an award, and the magnitude of arbitration.
Prearbitration Matters The contract specifies how an unresolved dispute goes to arbitration. Normally, arbitration is used for cases the parties have been unable to settle in one of the preceding steps of the process. If management denies a grievance at the last step or fails to modify its position sufficiently for the union to agree, the union can demand arbitration.
If the parties agree to concessions before arbitration, these may not be communicated to the arbitrator. In most cases, the parties can return to their step 1 positions without establishing precedents. Also, in cases settled before arbitration, the company may explicitly state that the settle- ment is not precedent-setting for similar future grievances.
The union’s request for arbitration must be timely. The contract speci- fies time limits for the various steps of the grievance process. If manage- ment denies the grievance at the last step, the union has a certain time to demand arbitration. If it does not exercise its rights within this period, management’s decision becomes final.
Selection of an Arbitrator Procedures for selecting an arbitrator are specified in the contract. Usually arbitration is performed by one impartial arbitrator or a tripartite board consisting of company and union representatives, and an impartial
21 Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998). 22 K. D. Schwartz, “Wright v. Universal Maritime Service Corp.: The Supreme Court Goes Back to Arbitration Basics,” Employee Relations Law Journal, 24, no. 4 (1999), pp. 75–90; see also W. J. Kilberg, “Wright v. Universal Maritime Service: Can Collective Bargaining Agreements Trump Discrimination Suits?” Employee Relations Law Journal, 25, no. 1 (1999), pp. 1–4. 23 Cornelius v. Nutt, 472 U.S. 648 (1985).
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chairperson who all hear the evidence and render an award. In large organizations or those where a long-term bargaining relationship exists, the contract may name an individual or group of permanent umpires to judge disputes. Permanence, however, is relative, because arbitrators continue to serve only as long as both parties are satisfied with their rul- ings. Permanent umpires may be more vulnerable when a militant union presents less meritorious cases than when a union saves arbitration for very important issues. In dealing with a militant union, an arbitrator would likely more frequently find merit in management’s position and, as a result, be rejected by the union quite soon. 24 Ad hoc arbitrators are appointed to hear only one case or set of cases. The appointment ends when the award is rendered and implemented.
Both methods of arbitrator selection have advantages and disadvan- tages. Less may be known about an ad hoc arbitrator, although infor- mation about potential arbitrators is usually available through résumés, previously published decisions, fields of expertise, and so on. But the appointment constitutes no continuing obligation by the parties. The per- manent umpire has a better grasp of the problems the parties encounter because of his or her continuing experience with both. But because the relationship is continuous, whether the umpire will engage in award split- ting may always be open to question.
A study of arbitrator acceptability found that the visibility of the arbi- trator rather than personal background or practice characteristics was the factor most highly related to volume of cases heard. Other important factors included being listed by referral agencies, publication of awards, membership in professional organizations, and background as a perma- nent umpire. 25 Another study suggests managements and unions should not pay too much attention to the personal background characteristics of arbitrators in making choices for a particular case because they account for little variance in arbitrators’ rulings. 26 One study of decisions in suspen- sion cases found that male arbitrators were more lenient for female than male grievants, while female arbitrators dealt similarly with both men and women. 27 However, a study focusing on the public sector found that rulings there were more often favorable for men. 28 A study of discharge
24 M. Marmo, “Acceptability as a Factor in Grievance Arbitration,” Labor Law Journal, 50 (1999), pp. 97–114. 25 S. S. Briggs and J. C. Anderson, “An Empirical Investigation of Arbitrator Acceptability,” Industrial Relations, 19 (1980), pp. 163–174. 26 H. G. Heneman III and M. H. Sandver, “Arbitrators’ Backgrounds and Behavior,” Proceedings of the Industrial Relations Research Association, 35 (1982), pp. 216–223. 27 B. Bemmels, “Gender Effects in Grievance Arbitration,” Industrial Relations, 30, (1991), pp. 150–162. 28 D. J. Mesch, “Arbitration and Gender: An Analysis of Cases Taken to Arbitration in the Public Sector,” Journal of Collective Negotiations in the Public Sector, 24 (1995), pp. 207–218.
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GAINING ACCEPTABILITY AS AN ARBITRATOR “Paul, you’ve been an active arbitrator for over 25 years. For several of those years arbitration was your principal means of livelihood. At what point did you personally cease to be a fringe arbitrator and consider yourself a mainliner?”
“Not on any one single case, I can assure you. A fringe arbitrator can be broken by a bad opinion in just one arbitration, but becoming a mainliner is a process rather than the result of a single spectacular case.”
“Is there any condition or status you can describe which clearly defines a mainline arbitrator?”
“When you put it that way, Pete, I can make the line of demarcation between a fringe arbi- trator and a mainliner quite distinct. When I was a fringe arbitrator, the losing party would scrutinize my opinion to find out where I was wrong. I knew I had arrived at the mainline stage when in many cases the loser would study my opinion to find out where he was wrong.”
Source: P. Prasow and E. Peters, Arbitration and Collective Bargaining: Conflict Resolution in Labor Relations (New York: McGraw-Hill, 1970), pp. 284–285.
cases found reinstatement to be less likely when the arbitrator was a pro- fessor or was older; reinstatement was more likely when the employee had increased seniority or was assigned to a professional, technical, or skilled/ semiskilled job or when the discharge was for work performance rather than a rule violation. 29 How the parties perceive the arbitrator’s attention to justice issues influences their evaluation of arbitral performance. Arbi- trator selection rates in interest cases are higher for arbitrators who are evaluated highly on attention to procedural justice issues. 30 Exhibit 15.1 reports a conversation between two experienced arbitrators on gaining acceptability.
Sources and Qualifi cations of Arbitrators There are no absolute qualifications to be an arbitrator. Anyone can simply declare that he or she is an arbitrator and seek appointments. However, to arbitrate, an individual must be selected by the parties. Where do arbitra- tors come from? Arbitrators are those who have arbitrated. Arbitrators are generally from two groups: increasingly, attorneys who are full-time arbitrators; and academics who teach labor law, industrial relations, and economics. Since 1975, the average mainline arbitrator has become older
29 N. E. Nelson and A. N. M. M. Uddin, “The Impact of Delay on Arbitrator’s Decisions in Discharge Cases,” Labor Studies Journal, 23, no. 2 (1998), pp. 3–20. 30 R. A. Posthuma, J. B. Dworkin, and M. S. Swift, “Arbitrator Acceptability: Does Justice Matter?” Industrial Relations, 39 (2000), pp. 313–335.
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and more experienced, with many having more than 30 years of experi- ence and being older than 65. 31 One method for becoming an arbitrator is to serve an informal apprenticeship under an experienced arbitrator, gain- ing practice in writing decisions and learning hearing techniques. Expo- sure with a highly regarded arbitrator may lead to later appointments. There are few formal training courses for arbitrators; however, programs designed to train minority arbitrators have been quite successful. 32 Evi- dence suggests arbitrator acceptability of those who complete training is quite high.
There are three major sources of arbitrators. Each serves a slightly dif- ferent function, but all have interests in providing arbitrator services in labor disputes.
National Academy of Arbitrators The National Academy of Arbitrators includes full-time arbitrators, as well as law school, industrial relations, and economics professors who have established excellent arbitral reputations. The academy holds meet- ings and issues proceedings, commenting on difficult problems in arbitra- tion and offering alternative solutions. For example, it offered a variety of approaches in the arbitration of discrimination cases, given the Alexander v. Gardner-Denver decision. 33
The academy’s membership directory provides a source of recognized, highly qualified arbitrators the parties can contact directly to request appointments to ad hoc or permanent umpire positions.
American Arbitration Association Many contracts specify that the parties use American Arbitration Asso- ciation (AAA) services for their unresolved grievances. The AAA does not employ arbitrators but acts as a clearinghouse to administer matters between the parties and the arbitrators.
If a contract specifies that the AAA assists in choosing an arbitrator, the AAA is notified that a dispute exists. The AAA sends the parties a panel of arbitrators (usually five and almost always an odd number). The arbitrators may have particular expertise in the disputed area (e.g., job evaluation) or may practice in a particular geographic area. The parties reject names alternately until only one remains. This person will be the nominee unless either party objects. If an objection occurs, the AAA sends
31 D. F. Jennings and A. D. Allen, Jr., “A Longitudinal Analysis of Content Issues in Labor Arbitration: View from Arbitrators Themselves,” Labor Studies Journal, 16, no. 2 (1991), pp. 35–49. 32 W. A. Nowlin, “Arbitrator Development: Career Paths, a Model Program, and Challenges,” Arbitration Journal, 43, no. 1 (1988), pp. 3–13. 33 H. T. Edwards, “Arbitration of Employment Discrimination Cases: A Proposal for Employer and Union Representatives,” Labor Law Journal, 27 (1976), pp. 265–277.
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out another panel. Generally, referral agencies refuse to send more than three panels for any dispute. After a name has been agreed on, the AAA contacts the appointee to offer the dispute, and the appointee accepts or declines. If the appointment is accepted, arrangements are made directly with the parties for a hearing date. The AAA will provide hearing facilities and court reporters if the parties request. Finally, the AAA follows up to see what decisions were rendered.
Federal Mediation and Conciliation Service The Federal Mediation and Conciliation Service (FMCS) maintains a roster of arbitrators from which it selects panels. The arbitrators are not FMCS employees but private practitioners. If FMCS assistance is specified in a contract, the FMCS would provide panels as the AAA does but would not provide reporting or facilities assistance.
The FMCS screens arbitrators who seek listing. People with obvious conflicts of interest (union organizers, employer labor consultants, etc.) are not included, and listees who fail to be selected are purged from sub- sequent lists. 34 Figure 15.1 shows some of the listing requirements.
The FMCS follows up on referrals by requiring arbitrators to render awards within 60 days of the hearing’s close and the receipt of posthear- ing briefs.
Once the arbitrator has been selected, processes related to the sched- uled hearing begin. The phases of this process include prehearing, hear- ing, and posthearing activities.
Prehearing Elkouri and Elkouri detail a number of steps both parties should go through before an arbitration hearing:
a. Review the history of the case as developed at the prearbitral steps of the grievance procedure.
b. Study the entire collective agreement to ascertain all clauses bearing directly or indirectly on the dispute. Also, compare current provisions with those contained in prior agreements to reveal changes significant to the case.
c. So as to determine the general authority of the arbitrator, and accord- ingly the scope of the arbitration, examine the instruments used to initiate the arbitration.
d. Talk to all persons (even those the other party might use as witnesses) who might be able to aid development of a full picture of the case, including different viewpoints. You will thus better understand not only your own case but your opponent’s as well; if you can anticipate your opponent’s case, you can better prepare to rebut it.
34 Title 29, Chapter 12, Part 1404, Code of Federal Regulations.
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Section 1404.5 Listing on the Roster, Criteria for Listing and Retention
Persons seeking to be listed on the Roster must complete and submit an application form which may be obtained from the Office of Arbitration Services. Upon receipt of an executed form, OAS will review the application, assure that it is complete, make such inquiries as are necessary, and submit the application to the Arbitrator Review Board. The Board will review the completed applications under the criteria set forth in paragraphs (a), (b), and (c) of this section, and will forward to the Director its recommendation on each applicant. The Director makes all final decisions as to whether an applicant may be listed. Each applicant shall be notified in writing of the Director’s decision and the reasons therefore.
(a) General Criteria. Applicants for the Roster will be listed on the Roster upon a determination that they: (1) Are experienced, competent, and acceptable in decision-making roles in the resolution of labor relations
disputes; or (2) Have extensive experience in relevant positions in collective bargaining; and (3) Are capable of conducting an orderly hearing, can analyze testimony and exhibits, and can prepare clear and
concise findings and awards within reasonable time limits.
(b) Proof of Qualification. The qualifications listed in paragraph (a) of this section are preferably demonstrated by the submission of actual arbitration awards prepared by the applicant while serving as an impartial arbitrator chosen by the parties to disputes. Equivalent experience acquired in training, internship or other development programs, or experience such as that acquired as a hearing officer or judge in labor relations controversies may also be considered by the Board.
(c) Advocacy (1) Definition. An advocate is a person who represents employers, labor organizations, or individuals as an
employee, attorney, or consultant, in matters of labor relations, including but not limited to the subjects of union representation and recognition matters, collective bargaining, arbitration, unfair labor practices, equal employment opportunity, and other areas generally recognized as constituting labor relations. The definition includes representatives of employers or employees in individual cases or controversies involving worker’s compensation, occupational health or safety, minimum wage, or other labor standards matters. The definition of advocate also includes a person who is directly associated with an advocate in a business or professional relationship as, for example, partners or employees of a law firm.
(2) Eligibility. Except in the case of persons listed on the Roster before November 17, 1976, no person who is an advocate, as defined above, may be listed. No person who was listed on the Roster at any time who was not an advocate when listed or who did not divulge advocacy at the time of listing may continue to be listed after becoming an advocate or after the fact of advocacy is revealed.
(d) Duration of Listing, Retention. Initial listing may be for a period not to exceed three years, and may be renewed thereafter for periods not to exceed two years, provided upon review that the listing is not canceled by the Director as set forth below. Notice of cancellation may be given to the member whenever the member:
(1) No longer meets the criteria for admission; (2) Has been repeatedly and flagrantly delinquent in submitting awards; (3) Has refused to make reasonable and periodic reports to FMCS, as required in Subpart C of this part,
concerning activities pertaining to arbitration; (4) Has been the subject of complaints by parties who use FMCS facilities and the Director, after appropriate
inquiry, concludes that just cause for cancellation has been shown. (5) Is determined by the Director to be unacceptable to the parties who use FMCS arbitration facilities; the
Director may base a determination of unacceptability on FMCS records showing the number of times the arbitrator’s name has been proposed to the parties and the number of times it has been selected.
No listing may be canceled without at least 60 days’ notice of the reasons for the proposed removal, unless the Director determines that the FMCS or the parties will be harmed by continued listing. In such cases an arbitrator’s listing may be suspended without notice or delay pending final determination in accordance with these procedures. The member shall in either case have an opportunity to submit a written response showing why the listing should not be canceled. The Director may, at his discretion, appoint a hearing officer to conduct an inquiry into the facts of any proposed cancellation and to make recommendations to the Director.
FIGURE 15.1 Requirements for Listing as an Arbitrator with the FMCS
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e. Interview each of your own witnesses (a) to determine what they know about the case; (b) to make certain they understand the relation of their testimony to the whole case; (c) to cross-examine them to check their testimony and to acquaint them with the process of cross-examination. Make a written summary of the expected testimony of each witness; this can be reviewed when the witness testifies to ensure that no important points are overlooked. Some parties outline in advance the questions to ask each witness.
f. Examine all records and documents that might be relevant to the case. Organize those you expect to use and make copies for use by the arbitrator and the other party at the hearing. If needed documents are in the exclusive possession of the other party, ask that they be made available before or at the hearing.
g. Visit the physical premises involved in the dispute to visualize better what occurred and what the dispute is about. Also, consider the advis- ability of asking at the hearing that the arbitrator (accompanied by both parties) also visit the site of the dispute.
h. Consider the utility of pictorial or statistical exhibits. One exhibit can be more effective than many words, if the matter is suited to the exhibit form of portrayal. However, exhibits that do not fit the case and those that are inaccurate or misleading are almost certain to be ineffective or to be damaging to their proponent.
i. Consider what the parties’ past practices have been in comparable situations.
j. Attempt to determine whether there is some key point on which the case might turn. If there is, it may be to your advantage to concentrate on that point.
k. In interpretation cases, prepare a written argument to support your view as to the proper interpretation of the disputed language.
l. In interests or contract-writing cases, collect and prepare economic and statistical data to aid evaluation of the dispute.
m. Research the parties’ prior arbitration awards and the published awards of other parties on the subject of the dispute for an indication of how similar issues have been approached in other cases.
n. [O]utline your case and discuss it with other persons in your group. This ensures better understanding of the case and will strengthen it by uncovering matters that need further attention. Then, too, it will tend to underscore policy and strategy considerations that may be very impor- tant in the ultimate handling of the case. Use of the outline at the hearing will facilitate an organized and systematic presentation of the case. 35
35 Elkouri & Elkouri, How Arbitration Works, pp. 198–99. See also C. A. Borell, “How Unions Can Improve Their Success Rate in Labor Arbitration,” Dispute Resolution Journal, 61, no. 1 (2006), pp. 28–38.
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In addition, the parties may continue to seek a settlement or reduce the time necessary to settle a case. Anytime during the prehearing phase, the arbitration request may be withdrawn by joint consent. Contracts will often specify whether withdrawal is final and whether a withdrawal is precedent-setting. The parties also may stipulate certain facts in a case, agree on applicable contract terms, and prepare joint exhibits. Settlement after arbitration is requested, but settlement before the hearing occurs more frequently when the parties’ representatives are not attorneys. 36
Hearing Processes The actual hearing may take many forms. Most simply, a case may be completely stipulated, with the arbitrator ruling on an interpretation of the contract given the written documents submitted. This option is not entirely up to the parties, however, because the arbitrator may insist on calling witnesses and examining evidence on site.
Representatives of the Parties The parties’ positions may be advocated by anyone they choose, which means the representatives may be attorneys, company or union officials, or the grievant. In most cases involving smaller companies, a national union field representative or local union officer and an industrial relations director or human resource manager are the advocates. Parties repre- sented by an attorney have an advantage when the other side is not repre- sented by one. When only one side retains an attorney, it is more frequently management that does so. 37
Presentation of the Case Because the union generally initiates grievances, it presents its case first, except in discipline and discharge cases. The union presents exhibits rel- evant to its case and calls witnesses. Management may object to exhibits and may cross-examine witnesses. When the union has completed its case, management offers its evidence in a similar manner. Rules of evidence in arbitration are more liberal than those in courts of law. At the end, both sides may present closing arguments. The arbitrator may question wit- nesses but is not required to do so.
Posthearing Following the hearing, the parties may submit briefs supporting their positions. The arbitrator studies the evidence, takes briefs into account, and perhaps examines similar cases.
36 C. R. Deitsch and D. A. Dilts, “Factors Affecting Pre-Arbitral Settlement of Rights Disputes: Predicting the Methods of Rights Dispute Resolution,” Journal of Labor Research, 7 (1986), pp. 69–78; see also R. Mittenthal, “The Impact of Lawyers on Labor-Management Arbitration,” Dispute Resolution Journal, 60, no. 3 (2005), pp. 42–44. 37 R. N. Block and J. Stieber, “The Impact of Attorneys and Arbitrators on Arbitration Awards,” Industrial and Labor Relations Review, 40 (1987), pp. 543–555.
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The arbitrator then prepares an award and sends it to the parties. In some cases, the arbitrator maintains jurisdiction until the award has been implemented in case additional proceedings are necessary to iron out dif- ferences in its application.
Evidentiary Rules Where AAA rules apply, Rule 28 states: “The arbitrator shall be the judge of the relevancy and the materiality of the evidence offered, and confor- mity to legal rules of evidence shall not be necessary.” 38 However, arbitra- tors must weigh the relevance or credibility of evidence when considering a grievance. Evidence is either direct or circumstantial . Direct evidence is information specifically tying a person to a situation. The search for the “smoking gun” is an attempt to find direct evidence. Circumstantial evidence suggests a connection between events and an individual. For example, if shortages in a cash register occur only when one particular employee is scheduled, that circumstance, when connected with others, may establish guilt.
Evidence is relevant if it addresses the issue at hand. For example, if an arbitrator hears a case involving drinking on the job, evidence related to the subject’s work assignment is not highly relevant. The evidence must also be material. For example, testimony that the subject bought a six-pack of beer the week before the alleged offense has little impact on establishing a connection with the offense.
In arbitration hearings, the union must prove management violated the contract, except in discipline cases. The level of proof required in discipline cases varies among arbitrators, but it is usually greater if the potential consequences are more severe.
Generally, employees are expected to know that published rules apply and that prior written warnings they received were correctly given unless challenged. Past discipline may be used to corroborate that an employee committed the type of offense at issue; but the longer the time since that discipline, the less weight it usually carries.
If another arbitrator has ruled on the same issue in this company and no contract changes have occurred in the area, the present arbitrator will probably rule that the issue has already been decided. In discipline cases where criminal proceedings have also occurred, the arbitrator is not bound by the same rules for evaluating evidence to prove the offense beyond a reasonable doubt.
Arbitrators weigh the credibility of witnesses. Persons who have little inherent interest in the case might be considered more credible, and an individual’s reputation for honesty may also be considered. 39
38 30 LA 1086, 1089. 39 M. Hill Jr. and A. V. Sinicropi, Evidence in Arbitration (Washington, DC: Bureau of National Affairs, 1980), pp. 1–108.
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Occasionally, one party has information that would aid the other in the preparation of a case. Four rules have been suggested for the production of material held by one party: (1) The information should be produced if the arbitrator requests it; (2) if the party refuses to produce the information, the arbitrator may weigh the refusal as he or she sees fit; (3) the document or information could be used to attack the credibility of a witness; and (4) the arbitrator may admit only the parts of the information that are relevant to the hearing. 40
For cross-examination and confrontation, (1) depositions and previ- ous testimony should be admitted if a witness is unavailable; (2) hearsay should be accepted when a direct witness declines to testify against a fellow employee; (3) the arbitrator should generally not attempt to inves- tigate; (4) where exposing the witness’s identity would damage either party’s legitimate interests, the witness should be questioned by counsel with only the arbitrator present. 41
The accused is not required to testify in criminal trials. Arbitrators prob- ably will not grant absolute immunity against self-incrimination and will give evidentiary weight to refusals to testify. However, arbitrators should not sustain a case based on a refusal to testify. 42
Arbitral Remedies When a case is submitted to an arbitrator, the issues usually are specified and the grievant has indicated what relief is desired. The relief requested tends to vary depending on the type of case, but generally arbitrators will grant relief, up to but not exceeding the relief desired, when it is found that the aggrieved party has been wronged.
In discipline and discharge cases, requested relief is usually for back pay for periods when an employee was out of work, restoration of employment, rescission of a demotion or transfer, elimination of reprimands from person- nel files, and the like. If reinstatement and/or back pay is to be granted, the arbitrator must determine the amount through the likely job history of the grievant, minus pay earned on other jobs, and the like. Arbitrators might also reduce discipline if it exceeds what the offense merits, given similar situations at that employer or other workplaces with similar settings.
More difficult cases to remedy involve such issues as subcontracting, plant closures, entitlements to overtime, assignment of work, and other economic issues. Usual remedies may require the restoration of work to the bargaining unit and payment of wages forgone by employees who would have been entitled to the work. 43
40 R. W. Fleming, The Labor Arbitration Process (Urbana, IL: University of Illinois Press, 1965), p. 175. 41 Ibid., p. 181. 42 Ibid., p. 186. 43 M. Hill Jr. and A. Sinicropi, Remedies in Arbitration (Washington, DC: Bureau of National Affairs, 1981).
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Preparation of the Award The award conveys the arbitrator’s decision in the case, including (in most cases) a summary of the evidence presented, the reasoning behind the decision, and what action must be taken to satisfy the decision.
To prepare the award, the arbitrator must determine whether the dis- pute was arbitrable. Did the grievance allege an actual violation of the con- tract? Were the grievance procedure steps followed in a prescribed manner so that the grievance and the union follow-up were timely? If these criteria are met, the arbitrator examines the merits.
While the arbitrator has no statutory obligation to do so, it is important that the reason for a particular award be included to guide the parties in the future. Even though the grievance may appear trivial, the decision will guide employer and union conduct during the contract, so it is important for them to know why the issue was decided as it was.
The arbitrator must be careful that the award draws from the essence of the contract. Most contracts prohibit arbitrators from adding to, subtract- ing from, or modifying the agreement. The arbitrator must show how the interpretation is within the parameters of the contract. If there are ambi- guities in the contract that apply to the grievance, the arbitrator needs to explain how they are resolved in the award. 44 In general, arbitrators are expected to apply the “plain-meaning rule” to contract language, but the history of how clauses were constructed is also important in understand- ing the meaning of the words used. 45
Occasionally, arbitrators find a conflict between contract language and federal labor or civil rights laws or interpretations. No clear-cut guidance for this situation exists. Some argue the arbitrator should give primacy to a contractual interpretation, 46 while others suggest federal employment laws must supersede contract terms and influence the award where they apply. 47 Arbitrators may also need to explain the rationale for their award if there appears to be a potential conflict with public policy—particularly in substance abuse, dishonesty, or theft discipline cases where the public would potentially or actually be at risk from the disciplined behavior. 48
44 J. B. LaRocco, “Ambiguities in Labor Contracts: Where Do They Come From?” Dispute Resolution Journal, 59, no. 1 (2004), pp. 38–41. 45 D. A. Dilts, “Of Words and Contracts: Arbitration and Lexicology,” Dispute Resolution Journal, 60, no. 2 (2005), pp. 40–46. 46 B. Meltzer, “Ruminations about Ideology, Law, and Labor Arbitration,” in The Arbitrator, the NLRB, and the Courts: Proceedings of the National Academy of Arbitrators (Washington, DC: Bureau of National Affairs, 1967), p. 1. 47 R. Howlett, “The Arbitrator, the NLRB, and the Courts,” in The Arbitrator, the NLRB, and the Courts: Proceedings of the National Academy of Arbitrators (Washington, DC: Bureau of National Affairs, 1967), p. 67. 48 D. J. Petersen and H. R. Boller, “Applying the Public Policy Exception to Labor Arbitration Awards,” Dispute Resolution Journal, 58, no. 4 (2003), pp. 14–23.
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Mean Median Minimum Maximum
Prearbitration grievance steps (days) 54.7 41.5 0 334 Arbitrator selection (days) 77.7 50.0 0 428 Scheduling (days) 128.3 112.0 9 623 Decision preparation (days) 65.2 55.9 0 347 Total procedure (days) 333.6 161.2 14 936 Length of award (pages) 15.1 13 1 105
TABLE 15.1 Time Involved in Arbitrated Grievances
Source: Adapted from A. Ponak, W. Zerbe, S. Rose, and C. Olson, “Using Event History Analysis to Model Delay in Grievance Arbitration,” Industrial and Labor Relations Review, 50 (1996), p. 112.
PROCEDURAL DIFFICULTIES AND THEIR RESOLUTIONS
Time delays are a major problem in arbitration. Some cases take up to two years to resolve. Table 15.1 provides the time data from almost 600 arbi- trated cases in the province of Alberta, Canada, between 1985 and 1988. 49 The total time is quite similar to that in U.S. data.
The arbitral process can take more time, but data indicate an average of 184 days from appointment to award. The 65 days from the end of the hearing to the award date is greater than the 60-day limit established by the FMCS, but it may include time during which briefs are submitted. 50 The median of 50 days is within the FMCS limit. One arbitrator noted that the time between the close of hearings and the rendering of a decision for about 150 cases varied from 0 to 94 days, with a mean of 30 days or less in every industry except railroads. For the 150 cases, the time lapse between the grievance and the hearing was 0 to 1,426 days, with a mean of over 100 days in all industries and a mean of over one year in steel, railroads, and the federal government. 51
Time delays occur at various points. From the original grievance to referral to arbitration, complexity and nondischarge grievances increase time required. A delay in arbitrator selection is related to using attorneys and the size of the arbitration board. Delays in scheduling relate to use of outside attorneys and hours, wages, benefits, and job entitlement issues. Delays in decisions were related to complexity; discipline, hours, wages, benefits, and other issues; board size; lawyer counsels; and the arbitrator’s workload. Public sector arbitrations took longer. 52
Time delays are difficult for the grievant. The quote “Justice delayed is justice denied” is not an empty platitude. It is important to individuals who have been disciplined to have their cases decided so that they can
49 A. Ponak, W. Zerbe, S. Rose, and C. Olson, “Using Event History Analysis to Model Delay in Grievance Arbitration,” Industrial and Labor Relations Review, 50 (1996), pp. 105–121. 50 Ibid. 51 G. Mangum, “Delay in Arbitration Decisions,” Arbitration Journal, 42, no. 1 (1987), p. 58. 52 Ponak et al., “Using Event History Analysis.”
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move on to a new job or return to work made whole. Delays in discharge arbitrations reduce the likelihood of reinstatement. A one-month delay is related to an 8.6 percent decrease in reinstatement odds. 53 For firms, a grievance involving many employees can lead to heavy back pay liabilities if long-delayed findings are adverse.
Arbitration costs also cause problems, particularly for unions. Because unions and managements usually share arbitration costs, a poorly financed union may be reluctant to use arbitration as much as it would like. Table 15.2 estimates the costs for a typical, relatively uncomplicated arbitration case, using 2006 per diem figures for arbitrators and increasing most other costs by about 275 percent over the costs when the table was first constructed in 1976. 54 The impact of the total cost of $11,950 can be estimated in relation to union dues. Assume that dues are equal to two hours of pay per month ($20 × 2 = $40). Usually the local retains about 50 percent of the dues ($20). It would take 597.5 dues payments to pay for an arbitration. If a local union budgeted 50 percent of dues collected for arbitration cases, this would mean that a bargaining unit with about 600 union members could take no more than six cases to arbitration annually. Using the rates at which employees grieve, on average, and the rate at which grievances ultimately are arbi- trated as discussed in Chapter 14, a local union with 600 members would be projected to take between .3 and 1.5 cases to arbitration annually. Thus, its expected arbitration costs would be between $3,585 and $17,925 annually.
Expedited Arbitration Since the early 1970s, some larger companies and unions have used expedited arbitration to reduce time delays and costs. In expedited arbitration, arbitrators hear several cases and submit very short written awards. Most expedited arbitration cases involve individual discipline and discharge or are emergencies. Expedited arbitration facilitates the entry of new arbitrators because relatively simple and straightforward cases are generally handled in this way.
Inadequate Representation Chapter 14 noted a few cases in which employees were not fairly repre- sented by their unions. Inadequate representation could be either mali- cious or inept. Because arbitration awards are viewed as final by courts, the quality of advocacy is very important. The Supreme Court reversed an arbitration award discharging an over-the-road trucker accused of padding expenses because an adequate investigation would have found that a motel clerk charged more than the published rate and pocketed the difference. The trucker was actually blameless. 55
53 Nelson and Uddin, “Impact of Delay.” 54 Federal Mediation and Conciliation Service, 2006 Annual Report, p. 8, www.fmcs.gov. 55 Hines v. Anchor Motor Freight, Inc., 424 U.S. 554 (1976).
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Lost time: Grievant and witnesses @ $20 × 32 hours 640 Lawyer: Library research @ $300 × 4 hours 1,200 Interviewing witnesses @ $300 × 4 hours 1,200 Filing fee: AAA (shared equally) $300 150 Total prehearing costs 3,190
Arbitrator: Fee (shared equally): 1 hearing day @ $860 430 Expenses for meals, transportation, etc. (shared) 250 Travel time (shared): ½ day 215 Transcript, 200 pages @ $12.50 per page (shared) 1,250 Lawyer: presentation of case @ $300 × 8 hours 2,400 Lost time: Grievant and witnesses @ $20 × 32 hours 640 Hearing room (shared) 150 Total hearing 5,285
Lawyer: preparation of posthearing brief @ $300 × 8 hours 2,400 Arbitrator: study and award preparation time, 2.5 days @ $860 (shared) 1,075 Total posthearing 3,475 Total cost to union 11,950
TABLE 15.2 The Union’s Cost of Traditional Arbitration for a 1-Day Hearing
During hearings, arbitrators may become aware of differences in the quality of representation. Although arbitrators may question witnesses and probe into other matters, their impartiality in an adversarial hearing could be questioned as a result. Is it ethical for an arbitrator to “make a case” for an advocate who has inadequately prepared a case? This issue has not been settled. However, if it’s clear to the arbitrator that the griev- ant’s rights are not adequately represented, a later appeal could reverse an award based on the inadequately prepared case. 56
ARBITRATION OF DISCIPLINE CASES
Many arbitration cases are employee appeals to reconsider evidence related to employer discipline or to reassess the severity of a punishment. Any punishment that includes discharge is particularly likely to go to arbitration. What principles do arbitrators apply to evaluate evidence and establish fair punishment in industrial discipline cases?
56 See J. T. McKelvey, “The Duty of Fair Representation: Has the Arbitrator a Responsibility?” Arbitration Journal, 41, no. 2 (1986), pp. 51–58, for one arbitrator’s opinion.
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Role of Discipline Employees have specified job rights under the contract, and employers are entitled to performance from their workers. An employer expects employ- ees to carry out orders, regardless of the employees’ interpretation of the rightness of the orders, unless they are unsafe, unhealthful, or illegal. 57 If employees believe orders violate the contract, they are entitled to file grievances and seek relief. But if employees take matters into their own hands, they are guilty of insubordination and may be punished. Punish- ment can serve two basic purposes: (1) to motivate employees to avoid similar conduct in the future and (2), by example, to deter others.
Evidence Because imposed discipline is extremely important to the grievant, arbitra- tors require that the employer present evidence showing that the grievant actually committed the offense and the punishment was proportional to the violated rule. Arbitrators decide discipline cases based on their assess- ment of what caused the problem to occur. 58 Arbitrators who overturn dis- cipline decisions generally cite a lack of supporting evidence; mitigating circumstances; arbitrary, capricious, or disparate treatment; inappropriate administration of rules; or procedural errors. 59 Given this evidence, arbi- trators may uphold or deny punishment or modify it downward (but not upward) to more closely match the disciplinary breach.
Uses of Punishment Punishment can be thought of, first, as a legitimate exercise of authority to impose consequences for a breach of rules and, second, as a corrective effort to direct employees’ attention to the consequences of their actions and to change their attitudes toward the punished behaviors. 60 Arbitrators may consider these purposes, but they are more concerned with the pro- cedural regularity of the discipline in the case at hand, in the evenness of its application across persons within the same firm, and in its fundamental fairness given societal norms. 61
The application of authoritarian or corrective discipline is divided about equally, while a small proportion of cases uses humanitarian discipline, which uses rules only as guidance and takes into account individual inten- tions. Table 15.3 shows the results. Corrective discipline is used more often for
57 D. L. Jones, Arbitration and Industrial Discipline (Ann Arbor: Bureau of Industrial Relations, University of Michigan, 1961), pp. 17–18. 58 B. Bemmels, “Attribution Theory and Discipline Arbitration,” Industrial and Labor Relations Review, 44 (1991), pp. 548–562. 59 G. W. Bohlander and D. Blancero, “A Study of Reversal Determinants in Discipline and Discharge Arbitration Awards: The Impact of Just Cause Standards,” Labor Studies Journal, 21, no. 3 (1996), pp. 3–18. 60 Jones, Arbitration and Industrial Discipline, pp. 2–4. 61 Ibid., pp. 16–20.
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absenteeism and incompetence, while authoritarian approaches are applied more often for dishonesty and illegal strike activity. 62 Corrective discipline is often applied for alcohol use, and punishment is more likely for drug use. 63
Given that corrective discipline is applied about half the time, is it effective? An intensive study concluded that employees who performed unsatisfactorily and received corrective discipline never performed satis- factorily later. A number of reasons are suggested for this finding. First, the individual is often restored to the original work group, where behavior that resulted in the punishment is reinforced. Second, the grievant may be unclear as to which behavior the punishment was related. And third, in some cases, placing an employee in a probationary status rather than punishing him or her makes the discipline contingent on future rather than past behavior. 64
An employee’s previous work record is predictive of job performance after reinstatement. Poor performance after reinstatement was predicted by the number of warnings and other disciplinary actions before being discharged and by discharges for absenteeism or dishonesty. 65 Among another group of reinstated employees, most discharges had been for
62 H. N. Wheeler, “Punishment Theory and Industrial Discipline,” Industrial Relations, 15 (1976), pp. 235–243. 63 K. W. Thornicroft, “Arbitrators and Substance Abuse Discharge Grievances: An Empirical Assessment,” Labor Studies Journal, 14, no. 4 (1989), pp. 40–65. 64 Jones, Arbitration and Industrial Discipline, pp. 71–74. 65 C. E. Labig Jr., I. B. Helburn, and R. C. Rodgers, “Discipline History, Seniority, and Reason for Discharge as Predictors of Post-Reinstatement Job Performance,” Arbitration Journal, 40, no. 3 (1985), pp. 44–52.
Humanitarian Corrective Authoritarian Total
Absenteeism, tardiness, leaving early 2 20 8 30 Dishonesty, theft, falsification of records 2 13 28 43 Incompetence, negligence, poor workmanship, violation of safety rules 1 27 9 37 Illegal strikes, strike violence, deliberate restriction of production 0 12 19 31 Intoxication, bringing intoxicants into plant 1 10 7 18 Fighting, assault, horseplay, troublemaking 3 16 15 34 Insubordination, refusal of job assignment, refusal to work overtime, fight or altercation with supervisor 2 42 54 98 Miscellaneous rule violations 2 20 26 48 Total 13 160 166 339 Percent 4% 47% 49%
TABLE 15.3 Analysis of Arbitration Decisions Relating to Discharge and Discipline by Theory of Discipline and Type of Offense, as Reported in Labor Arbitration Reports, May 1970–March 1974
Source: Hoyt N. Wheeler, “Punishment Theory and Industrial Discipline,” Industrial Relations, May 1976, p. 239. Reprinted with permission from Blackwell Publishing.
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attendance problems, and the performance of reinstated employees was about average. 66 These findings are consistent with the results following last chance agreements, examined in Chapter 14.
Substance Abuse Cases Increasingly, contracts and/or work rules recognize alcoholism and addiction to narcotics as diseases. Employers and unions have agreed generally to facilitate treatment for employees who make their condi- tions known and to forgo discipline for the substance abuse. 67 Some abuse problems become known to employers through drug testing. Since abstinence would be a condition of employment, testing is a mandatory bargaining issue. Where probable cause of abuse exists, failure to submit to a drug test will usually lead an arbitrator to uphold a discharge. 68
In alcohol and drug cases arbitrators uphold company discipline depending on proof of misconduct, the reasonableness of the company’s action, and appropriateness of the penalty. Other factors include proper notice to employees of likely consequences for drug and alcohol offenses, equal treatment, and proper investigation. 69
Where last chance agreements are violated, courts have held that they supersede the contract and discharges under them are not arbitrable if the facts are uncontroverted. 70
Sexual Harassment Violations Sexual harassment is a violation of Title VII of the 1964 Civil Rights Act. Employers are liable for damages if an employee is sexually harassed and the employer has taken no affirmative action to prevent its occurrence. Thus, most employers promulgate policies forbidding supervisors to solicit sexual favors for positive employment treatment and forbidding employ- ees to create and maintain a sexually hostile environment. Courts have generally viewed harassment from the standpoint of the potential target of the harassment (e.g., if the target is a woman, what would a “reasonable woman” consider harassment?). Many companies have “zero-tolerance” policies for harassment (i.e., employees who harass will be terminated).
66 W. E. Simkin, “Some Results of Reinstatement by Arbitration,” Arbitration Journal, 41, no. 3 (1986), pp. 53–58. 67 T. Schneider-Denenberg and R. V. Denenberg, “Arbitration of Employee Substance Abuse Rehabilitation Issues,” Arbitration Journal, 46, no. 1 (1991), pp. 17–33. 68 C. L. Reder and A. Abbey, “The Arbitration of Drug Use and Testing in the Workplace,” Arbitration Journal, 48, no. 1 (1993), pp. 80–85. 69 S. M. Crow, E. C. Stephens, and W. H. Sharp, “A New Approach to Decision-Making Research in Labor Arbitration Using Alcohol and Drug Disciplinary Cases,” Labor Studies Journal, 17, no. 3 (1992), pp. 3–18. 70 D. S. McPherson and B. R. Metzger, “‘Last Chance’ Discharges at Arbitration: Emergent Standards of Judicial Review,” Proceedings of the Industrial Relations Research Association, 46 (1994), pp. 315–323.
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An analysis of arbitration awards in sexual harassment cases found that 72 percent involved co-workers, 5 percent supervisors, and 4 percent nonemployees, with 92 percent involving complaints of unwanted sexual advances or hostile work environments. 71 If arbitrators find a violation but don’t view it as serious enough to merit discharge, there is a potential problem if a harassing employee is restored to the same work area as the person who was harassed, thereby continuing a threatening or hostile workplace. 72
Fighting Employers often discharge employees involved in fights, regardless of their role in the altercation. A study of arbitration awards involving dis- cipline for fighting found that individuals involved in fighting could be assigned to three categories: unprovoked aggressor, provoked aggressor, and victim. Arbitrators reduced discipline in about two-thirds of cases they heard. The role of the grievant was related to the reduction in about half of the cases. 73
Work-Family Confl icts There may be situations where an employee is scheduled to work during a period when a child is sick or needs to be picked up from day care or school or when some other conflict occurs. Some of these situations may involve short absences of a few hours or a few days, while others may be for extended periods. If there is a bona fide reason for an extended absence, an employee is normally entitled to take a leave under provisions of the Family Medical Leave Act, but such leaves may not be requested in short, ad hoc situations.
Generally, if an employer imposes discipline for a work-family conflict absence, arbitrators will weigh evidence regarding the grievant’s usual attendance record, the severity of the illness of the family member, the effort the grievant took to try to arrange for alternative care, and the length of time or shortness of notice given by the employee regarding the sched- uled work. 74
E-Mail Abuse Employers may establish reasonable rules under management rights clauses. They may establish codes of conduct regarding the use of an employer’s e-mail system and its connection with the Internet.
71 V. E. Hauck and T. G. Pearce, “Sexual Harassment and Arbitration,” Labor Law Journal, 43 (1992), pp. 31–39. 72 T. J. Piskorski, “Reinstatement of the Sexual Harasser: The Conflict between Federal Labor Law and Title VII,” Employee Relations Law Journal, 18 (1993), pp. 617–623. 73 M. A. Lucero and R. E. Allen, “Fighting on the Job,” Dispute Resolution Journal, 53, no. 3 (1998), pp. 50–57. 74 B. Wolkinson and R. Ormiston, “The Reconciliation of Work-Family Conflicts in Arbitration,” Dispute Resolution Journal, 59, no. 3 (2004), pp. 84–95.
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Requirements that computer usage be for business purposes and that con- tent may not be pornographic or abusive are generally seen by arbitrators as reasonable. An employer must make sure that rules are communicated and that they are enforced in an even manner.
Situations that lead to discipline include e-mails to large numbers of recipients protesting management decisions, intentional or accidental transmission of confidential material, the viewing and/or storing of por- nography, distribution of bulk mail or chain letters, or a variety of other personal uses. 75
ARBITRATION OF PAST-PRACTICE DISPUTES
Certain work practices or benefits may not be written in the contract but may have been applied so consistently that there is an understanding they will continue. Unions may frequently negotiate clauses stating that both parties agree that existing conditions will not be reduced during the agreement.
In a variety of situations, arbitrators have ruled that certain practices not mentioned in the contract are protected to the initiator: union or man- agement. If management confers a benefit but announces special circum- stances each time it confers it, the employer does not establish a continuing practice. On the other hand, if management mentions a benefit as a reason for not conceding in some area during negotiations, the benefit assumes binding characteristics. If conditions change and management decides to drop a practice, it must do so within a reasonably short time after the change to defend itself against past-practice grievances. 76
Eight criteria are examined in ruling on past-practice grievances:
1. Does the practice concern a major condition of employment? 2. Was it established unilaterally? 3. Was it administered unilaterally? 4. Did either party seek to incorporate it into the body of the written
agreement? 5. What is the frequency of repetition of the practice? 6. Is the practice of long standing? 7. Is it specific and detailed? 8. Do the employees rely on it? 77
75 A. Lichtash, “Inappropriate Use of E-Mail and the Internet in the Workplace: The Arbitration Picture,” Dispute Resolution Journal, 59, no. 1 (2004), pp. 26–36. 76 P. Prasow and E. Peters, Arbitration and Collective Bargaining: Conflict Resolution in Labor Relations (New York: McGraw-Hill, 1970), pp. 96–121. 77 Jacob Ruppert v. Office Employees International Union Local 153, October 19, 1960, 35 LA 505, Arbitrator, Burton B. Turkus.
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Specific Issues 1973 1981 1990 1997 2006 Percent Change from 1990
Total 4,255 8,126 5,916 3,787 2,473 �58.2 General issues 1,130 1,962 1,419 779 320 �77.4 Distribution of overtime 187 202 143 63 6 �95.8 Compulsory overtime 17 23 21 12 1 �95.2 Other overtime 49 50 20 4 �92.0 Seniority 653 761 552 346 103 �81.3 Promotion and upgrading 203 215 214 108 40 �81.3 Layoff bumping and recall 264 361 198 129 39 �80.3 Transfer 96 92 66 44 0 �100.0 Other seniority 90 93 74 65 24 �67.6 Union officers 27 41 19 15 1 �94.7 Strike and lockout 19 13 6 4 0 �100.0 Working conditions 48 27 64 21 23 �64.1 Discrimination 63 47 22 18 �61.7 Management rights 199 156 81 85 �45.5 Scheduling of work 179 150 88 82 50 �43.2 Work assignments 404 273 140 29 �89.4 Pay issues 581 930 671 409 178 �73.5 Wage issues 107 98 69 156 59.2 Rate of pay 176 133 91 1 �99.2 Severance pay 18 13 13 1 �92.3 Reporting, call-in and call-back 86 72 48 13 0 �100.0 Holidays and holiday pay 119 129 87 40 7 �92.0 Vacations and vacation pay 113 142 91 74 4 �95.6 Incentive rates and standards 82 74 38 15 1 �97.4 Overtime pay 181 212 163 94 8 �95.1 Fringe benefit issues 161 228 251 110 127 �49.4 Health and welfare 51 86 124 40 48 �61.3 Pensions 24 23 27 18 19 �29.6 Other 86 119 100 52 60 �40.0 Discipline and discharge 1,302 3,231 2,546 1,941 913 �64.1 Technical issues 400 380 299 163 59 �80.3 Job posting and bidding 18 98 58 43 �56.1 Job evaluation 400 75 75 60 14 �81.3 Job classification 197 126 75 2 �98.4 Scope of agreement 186 231 191 120 28 �85.3 Subcontracting 95 127 131 79 24 �81.7 Jurisdictional disputes 40 49 30 25 4 �86.7 Foremen, supervision, etc. 42 47 24 13 0 �100.0 Mergers, consolidations, etc. 9 8 6 4 0 �100.0 Arbitrability Issues 416 1,468 550 198 191 �65.3 Arbitrability of grievances 223 734 275 99 26 �90.5 Procedural 143 434 168 29 96 �42.9 Substantive 70 218 77 59 37 �51.9 Procedural and substantive 10 82 30 11 17 �43.3 Not elsewhere classified 243 320 264 188 15 �94.3
TABLE 15.4 Number of Issues Reported to Applicable FMCS Closed Arbitration Award Cases for Fiscal Years 1973, 1981, 1990, 1997, and 2006 and Percentage Change from 1990
Source: U.S. Federal Mediation and Conciliation Service, Thirty-Eighth Annual Report, Fiscal Year 1986 (Washington, DC: Government Printing Office, 1986), pp. 38–39; U.S. Federal Mediation and Conciliation Service, Forty-Third Annual Report, Fiscal Year 1990 (Washington, DC: U.S. Government Printing Office, 1990), p. 44; www.fmcs.gov/annuals/97/arb.htm; U.S. Federal Mediation and Conciliation Service, Fifty-Ninth Annual Report, Fiscal Year 2004, www.fmcs.gov/annuals/04, pp. 36–37; U.S. Federal Mediation and Conciliation Service, 2006 Annual Report, www.fmcs.gov, pp. 9–10.
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78 D. A. Dilts and C. R. Deitsch, “Arbitration Win-Loss Rates as a Measure of Arbitrator Neutrality,” Arbitration Journal, 44, no. 3 (1989), pp. 42–47. 79 D. Feller, “The Remedy Power in Grievance Arbitration,” Industrial Relations Law Journal, 5 (1982), pp. 128–137.
If the answers to these questions are yes, the condition will likely take on the same legitimacy as a negotiated benefit.
ARBITRAL DECISIONS AND THE ROLE OF ARBITRATION
For arbitration to be accepted by the parties, neither expects to fare worse in the results. In a survey of published decisions, win rates for unions and managements were divided evenly. The party with the burden of proof (management in discipline cases, the union in others) wins in 43 percent of cases. 78
The parties agree to use arbitration for unresolvable grievances. Most contracts indicate arbitrators cannot add to the agreement or decide a case using criteria outside the agreement. Yet the parties encounter situations in which they cannot agree on the interpretation of the contract. One com- mentator suggests that the role of the arbitrator is to add to the agreement by setting terms to cover one of a number of infinite work situations the parties could not contemplate when the agreement was negotiated. 79 The method continues to be the choice of parties to resolve intracontractual differences that cannot be negotiated or mediated.
The FMCS gathers data on the number of cases going to arbitration and the issues involved for panels it supplies. Table 15.4 shows the pro- gression from 1973 through 2006. The table indicates that grievances taken to arbitration for almost all issues have declined substantially since the early 1980s. A good deal of this is probably due to the reduced proportion of workers currently represented by unions as compared to earlier periods.
Summary Arbitration is a process for resolving disputes through the invitation of a neutral third party. The use of arbitration is encouraged by the courts, and the outcome of arbitral awards is generally considered nonreviewable. Supreme Court decisions in the Steelworkers’ trilogy laid the groundwork for the present status of arbitration.
Arbitral hearings are quasi-judicial in nature and resolve alleged con- tract violations. Arbitrators hear evidence from both parties and rule on the issue in dispute.
A large number of arbitration proceedings are associated with indi- vidual discipline and discharge cases. Arbitration cases appear to be split about evenly in applying authoritarian or corrective standards in the use of punishment.
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Arbitration has been criticized because it can entail substantial time delays and costs and because some decisions seem to go outside the scope of the contract or dispute. But opponents and proponents are relatively satisfied with the system.
1. Given the Supreme Court and NLRB rulings, what is the scope and finality associated with rights arbitration proceedings in the private sector?
2. What possible drawbacks do you see associated with the expansion of expedited arbitration?
3. What duty, if any, does an arbitrator have to the parties to see that both are competently represented?
4. Give arguments for and against the greater involvement of attorneys in arbitration, as both advocates and umpires.
5. Forecast what you see as the future of labor arbitration in terms of the expansion or contraction of issues within its jurisdiction and the finality of its decisions.
Key Terms Arbitrability, 492 Steelworkers’ trilogy, 492 Collyer doctrine, 494
Permanent umpire, 497 Ad hoc arbitrator, 497
Expedited arbitration, 508 Past practice, 514
Cases About 6 months after the new GMFC–Local 384 contract was ratified, four grievances were sent to arbitration by the union. The company and the union agreed that all four grievances would be heard on separate dates by the same arbitrator. Your name was on the panel the FMCS sent to the parties, and they selected you to arbitrate the grievances. You agreed and have heard all four grievances over the past three days. Now you have to prepare your awards.
George Jones was a level 1 assembler in the heavy-components assembly department. He worked with six other assemblers of the same grade, constructing cabs for power shovels. The supervisor, Ralph Barnes, was in charge of three of these heavy-assembly crews. George Jones had been with GMFC for about four years. Over the past six months, he had spent all of his time with his present work crew.
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His work record had been unremarkable. He had two unexcused absences but no problems with supervision.
On May 6, Jones struck a co-worker, Elliot Johnson, with his fist, rendering him uncon- scious. As soon as Barnes arrived on the scene and gave first aid, he asked the work crew what had happened. They had only seen Jones strike Johnson. After Johnson regained consciousness, Barnes asked him what hap- pened. Johnson stated he and Jones had been talking when Jones suddenly turned and swung at him. Barnes then asked Jones what happened. Jones, who is the only African- American employee in his work group, said Johnson had been making racial slurs toward him ever since he joined the crew, and this morning he had been pushed over the brink when Johnson said, “If it weren’t for affirma- tive action, welfare would be the only thing that would keep a shirt on your back.”
From his supervisor training course, Barnes knew it was company policy to dis- charge anyone who struck another employee or started a fight. Thus, he called security to take Jones to the HR department for termina- tion. When he arrived there, he demanded to see Ralph Murphy, the union steward in his area. After conferring, Murphy filed a griev- ance on Jones’s behalf, alleging the company had violated Section 4.02 of the contract by discharging him without cause. His griev- ance stated the attack on Johnson was justi- fied given his past harassment and punching him seemed to be the “only way to get him off my back.”
When Murphy gave the grievance to Barnes, it was immediately denied. Barnes said, “The rule is ironclad, as far as I’m concerned. They said we supervisors didn’t have any latitude on this issue.”
Murphy then presented copies of the griev- ance to the shift IR representative, Carolyn Foster, and the general supervisor, Neal Young. In her examination of the grievance,
Foster called Johnson and Cronholm, Jensen, and Albers (three other employees in the work group) to her office separately. When questioned, Johnson repeated his allegation that Jones’s attack was unprovoked and adamantly denied ever making racial slurs toward him. Information from Jensen and Albers supported Johnson’s denial of racial slurs, but Cronholm said he had repeatedly heard Johnson make disparaging remarks to Jones and Jones had asked him to stop. After weighing this information and consid- ering company policy on fighting, she upheld Barnes’s action.
The union continued to demand Jones’s reinstatement with full back pay, and man- agement adamantly refused.
When the case was heard, the union’s grievance alleged not only that had Jones been discharged without cause (Section 4.02) but also that the discharge had been racially moti- vated, violating the EEO section (12.16a). In its opening argument, the company asked you to find the grievance nonarbitrable because Jones could file a charge with the EEOC under Title VII if your award upheld the discharge. The company also said the discrimination issue was not arbitrable because it had not been raised in step 3 as provided in EEO Section 12.16b. You noted the arguments but reserved your ruling on arbitrability for the decision you would prepare.
Both sides presented their evidence. All of it was in substantial agreement with what Barnes and Foster had found in their inves- tigation. Jones and Johnson held to their sto- ries, as did Jensen, Albers, and Cronholm. The company introduced evidence to show that without exception employees had been terminated for fighting. It also provided sta- tistics showing that 12 percent of the eight employees discharged for fighting over the past three years were African-American and 14 percent of the production labor force was African-American.
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In this case, your award should contain:
1. Your ruling on the arbitrability of the grievance.
2. Your rationale in finding on the merits of the case (if arbitrable).
3. If arbitrable, the degree to which you would grant the relief Jones is asking or uphold management.
CASE 2 Until the point at which the present grievance was filed, the company has always used its own janitors for cleaning and maintenance. Because of operational requirements, most of this work is performed on the third shift. About 16 janitors are required to maintain the Central City facilities. GMFC has always had problems with absences among its janitors, but since the last contract was signed, the absence rate has increased from an average of about 2.5 percent each week to 20 per- cent. Because of this increase, housekeeping lagged, and GMFC officials were starting to worry about fire code violations result- ing from the superficial cleaning. Manage- ment considered discharging those who were chronically absent but found on investigation that absences seemed to rotate systematically among members of the crew, as if they were planned.
As a result of management’s investigation, Carolyn Foster contacted Matt Duff, Local 384 president, and asked him to enforce the con- tract and get the janitors’ absence rate down. She told Duff that the company considered the action the equivalent of a slowdown and that strong action would be taken if absence rates were not reduced. Duff protested, say- ing there was no concerted activity behind the absences.
When the high rate and rotating pat- tern persisted, the company discharged the janitors and subcontracted their work to
Dependa-Kleen, a full-time janitorial service. To the company’s pleasure, Dependa-Kleen was able to take over the entire operation at a lower cost than the in-house operation had incurred before the absence problem.
On behalf of the janitors, Duff filed a griev- ance arguing the discharges violated Section 4.02 of the contract. He also filed a ULP charge with the NLRB, claiming the company vio- lated Section 8(a)(5) of the Taft-Hartley Act through its unilateral action in subcontracting the work without consulting or bargaining with the union.
The company argued it was justified in replacing the janitors because their system- atic absences were a violation of the contract’s no-strike or slowdown clause (Section 9.05). The company argued it was entitled to replace the participants consistent with the manage- ment rights clause in Section 4.02.
Assume the testimony at the hearing does not seriously challenge the evidence manage- ment has gathered on the increase in absences among the janitors. In this case, decide the following:
1. Would you find the grievance arbitrable given the ULP charge filed by the union?
2. Assuming you find the grievance arbitra- ble, frame an award and justify it.
CASE 3 The maintenance electricians in the unit are assigned to repair jobs around the Central City facilities shortly after they report to work at their central shop at the beginning of a shift. Before ratification of the most recent contract, electricians traditionally returned to the shop for their afternoon coffee breaks. All of the electricians left their work so that they would arrive at the shop at the beginning of the break, and they left the shop at the end of the break to return to work.
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The electrical shop supervisor, Ken Bates, issued a new policy after the new contract was approved, stating the break would commence once work stopped at the assigned location and end when work was restarted. This policy change meant some electricians would have insufficient time to return to the shop for their breaks.
The union filed a grievance alleging that the company had revoked a prevailing practice that had the effect of a contract term. It also argued it had not been consulted, as Article 12.03 of the contract required. The company denied the grievance, citing the language in Section 12.02.
1. Should the grievance be sustained? 2. If it should be sustained, what is your rea-
soning and what should the award be? If it should be denied, what is the basis for the denial?
CASE 4 Two months ago, GMFC decided to change its health care preferred provider organiza- tion (PPO) from the Central Indiana Medical Group (CIMG) to UniCare of Indiana, a local affiliate of UniCare of America. This shift has meant that GMFC employees must change from their present family doctors in CIMG to employee doctors of UniCare if they are to receive PPO coverage. If they remain with
their present doctors, they will have to pay the difference in treatment costs between the UniCare and CIMG schedules, which are, on average, about 20 percent higher. In addition, UniCare does not cover some of the treatments offered by CIMG, such as chiropractic treat- ments when referred by a medical doctor.
The union grieved this change, arguing the chosen provider would be expected to remain in place over the term of the agreement. It argues that a significant negotiated benefit issue has been unilaterally changed by the employer and that employees’ compensation would suffer as a result. The union has also filed a refusal-to- bargain ULP charge with the NLRB.
The company argues that Section 12.08 of the negotiated agreement permits it to choose the PPO. It further argues that none of the pro- visions of Section 12.08 has been changed. The company still stands ready to pay 80 percent of the first $2,500 in treatment provided by the PPO. It simply has made a business decision to change suppliers to maximize performance.
1. Should the grievance be sustained or denied?
2. If it should be sustained, what should the award be?
3. Has a ULP been committed? If so, what action can the NLRB take? Given the evi- dence in how the NLRB acts in cases where ULPs are charged, how would it likely rule?