A Few Words On Remedies
What Can You Win Or Lose in Arbitration
Hi there, Champions. In my last post, I evaluated most of the factors that go into deciding whether to arbitrate or not. The last factor to consider - the remedy - warrants its own consideration.
The remedy is the outcome granted by the arbitrator as part of their decision. In arbitration, remedies are limited to what you would have gotten if the contract had not been violated. Unlike civil litigation, there are no punitive damages, for example. When evaluating a case., it’s important to ask what you want from the case and what you can reasonably expect to win. It also helps to ask yourself what outcome you can expect if you lose.
It might be possible that the parties could reach a better outcome with a settlement than with an arbitrator’s award. For the union, a last-chance agreement or a resignation for a discharged employee might be a better outcome than losing the case. For management, reinstatement of an employee with a lesser discipline today might be better than a year from now, when the back pay and benefits costs have started to mount. In other words, the parties should evaluate whether there is an acceptable outcome that is short of losing and short of winning.
In evaluating the remedy, the parties might conclude the remedy has little value. For example, if the grievant is employed elsewhere and not interested in returning to work, arbitration might not be necessary to resolve the grievance. On the other hand, an employed grievant may be under less pressure to settle, and the employer faces less exposure in back pay. Sometimes, in evaluating the remedy, you realize there’s no monetary value and you’d be better off deferring the matter to bargaining. Knowing what you want from the grievance procedure is almost as important as knowing if you’ll win.
So what can you win? When I represented unions, I often told individual employees not to expect “justice” from the arbitrator. The arbitrator wasn’t going to make someone apologize or award damages for pain and suffering. Arbitrators are limited to contract remedies, which are “make whole,” meaning you can get what you would have gotten if the contract hadn’t been violated.
If you are the employer, the remedy you hope for is the status quo. You want the arbitrator to confirm that you had just cause to terminate an employee or that you didn’t violate the contract when you mandated overtime work.
In some cases, either party will request attorney’s fees or an order requiring the other side to pay all the costs of arbitration. Arbitrators rarely grant these requests unless there’s a contract provision or extraordinary circumstances like egregious, bad faith, and repetitive violations. In an informal survey of eight arbitrators I know, no one had ever ordered attorney’s fees if the contract didn’t have an express provision allowing it.
Unions have a wider array of contract remedies available. In a disciplinary case, the Union may seek reinstatement, a lower level of discipline, backpay with interest, and all lost benefits. In a contract case, Unions want contract enforcement, injunctive relief, and for their members to be made whole monetarily. Unions may also occasionally ask for attorney’s fees and arbitration costs. Again, they are rarely awarded unless there is explicit contract language or egregious, bad faith, and repetitive misconduct by the employer.
It’s important to identify the remedy you seek at the time you are evaluating the case. It may help settlement, either early on or later when you prepare for arbitration. It’s also important to articulate to the arbitrator what remedy you seek. Arbitrators who don’t have that road map may craft remedies that neither party wants.
Arbitrators will also occasionally craft novel remedies, like completion of drug rehabilitation or a Last Chance Agreement as a condition of returning an employee to work in a discipline case. In cases where it’s difficult to know which employees were harmed but a deterrence message is sought, the Arbitrator might order a contribution to an education fund or apprenticeship program in the industry. The parties don’t usually request these remedies and many people feel that they go beyond the scope of the arbitrator’s authority, but be aware that they occur. The parties may even agree beforehand to tell the arbitrator what they believe is not acceptable.
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