Selecting An Arbitrator

Understanding the Process

Photo by Salih Enes Alkan on Unsplash

Hi there, Champs. I hope this finds you well. Today, I want to talk about how parties select an arbitrator, and about the factors you might consider when selecting an arbitrator.

As with almost everything in a unionized workplace, the process of selecting an arbitrator is usually laid out in the agreement. There are several different ways that contracts specify arbitrator selection.

FYI - The names of the employers, unions, and employees are not actual employers, unions, and employees, but are cultural references. For example, Local 282 is a reference to the band Thinking Fellers Union Local 282.

Permanent Panel in the Agreement: Rotation from a list

Some CBAs list a permanent panel of individual arbitrators whom the parties rotate through their cases. Rotation means that you do not have to worry about selecting an arbitrator - whichever one is next in rotation will have your case. For example, Local 282’s contract says: “The parties will select an arbitrator from among the following names; Fred, Wilma, Barney, Betty, Bam Bam.” For many years, Kraftwerk, Inc. and Local 282 rotated through the arbitrators in order; the first grievance would go to Fred, the second to Wilma, and so on. After many years, Kraftwerk decided Barney was too pro-union, and Local 282 hated an award that Wilma wrote. That left Fred, Betty, and Bam Bam to hear arbitration cases. The parties can withdraw their agreement to one of the arbitrators during the term of the agreement and substitute new names either at bargaining or by agreement mid-contract.

If you have a very bad or very good experience with an arbitrator, your contract negotiators, so the negotiator knows whether to try to keep them or replace them on the list. The arbitrator panel in the agreement is rarely (never?) as important as the wage negotiations, but it does have a big impact during the life of the Agreement. Keep that list current. It’s shocking how many agreements mention arbitrators who are no longer working.

Arbitration Services or Arbitration Rosters

Some agreements specify that the parties will use lists provided by a roster service, such as the American Arbitration Association (AAA), the Federal Mediation and Conciliation Service (FMCS), or their state public employment relations board. The roster service websites make it very easy to get randomly generated lists of arbitrators and will provide lists of arbitrators with specific expertise or in a particular region. Some arbitration services are “full service” and will do scheduling and other administrative functions (for a fee, obviously).

Sometimes the parties will agree on an arbitrator they get from an agency just by looking at the list but it’s more common for the parties to take turns striking a name from the list until the last name is left and that person is selected.

Arbitrator List in the CBA

Some contracts also have a list of arbitrators available for selection. This is different from the rotating list because the parties strike names as they would from a list provided by an agency. You might wonder why parties would keep names on their list that they want to strike, but sometimes people prefer an arbitrator for a disciplinary case and they strike their name if the grievance is a contract dispute. Talk to colleagues about their experiences with the arbitrators on the list. Arbitrators may not be viewed as wholly good or bad. Some may be favorable on discipline cases but bad on cases involving back wages.

If you are selecting an arbitrator where you are “striking names,” don’t start with your most objectionable. If there are five names, rank them according to your preference. You will strike two names and the other side will strike two names. You want to make sure that the arbitrators you ranked #4 and #5 are struck. First round, strike the less objectionable (#4). It is possible that the other side will strike your most objectionable and you will be able to strike #3 with your second round.

Ad Hoc or Private Selection

When the contract is silent, the parties might suggest arbitrators to one another until they reach an agreement. It’s common to gravitate to the names you recognize or, more commonly, shy away from the names of arbitrators who have ruled against you in the past. People stay away from unfamiliar names, which is too bad. More established arbitrators are harder to schedule. A few arbitrators I know do not have available dates for up to a year in the future. Relying on a small pool of arbitrators often means new arbitrators with more diverse backgrounds have a difficult time establishing a practice. This leads to complaints from practitioners that there aren’t enough diverse arbitrators or arbitrators who are available to hear a case on short notice.

Selecting New Arbitrators

If you would like to see a more diverse group of arbitrators, propose the names of newer arbitrators to the other party and see if they’re interested. When I first started practicing, I was picked with some frequency by two parties I had no previous knowledge of. After our third hearing, the lawyers both told me (together) that they had originally selected me because, for one reason or another, they’d rejected every other arbitrator on several lists they received!

Understandably, parties want to know what kinds of decisions they can expect. Established arbitrators are more likely to offer consistency in that regard. There are useful ways to evaluate new arbitrators.

1. Read their resume: The best indicator that a new arbitrator will be familiar with labor arbitration is that they have experience with collective bargaining, contract administration, and grievance handling. General employment law or human resources experience isn’t helpful unless it is in a unionized work environment.

2. Review their training: While it isn’t foolproof, if an arbitrator has completed the FMCS Becoming an Arbitrator training or an analogous National Academy of Arbitrators or state training, they should have a good grounding in the basics. The FMCS course includes a decision writing assignment (the “Nurse Kevin” case). You can request a copy of that work as a writing sample if the arbitrator doesn’t have any published decisions available.

3. Ask your colleagues: Although your colleagues may seem like a great source of information, take their feedback with a grain of salt since a losing party might be more negative than necessary. You might ask the colleague if you can read the award they received. What you want to know is: whether can they run a hearing, make clear evidentiary rulings, and manage the whole case efficiently. Is the arbitrator fair, and what does fair mean to your colleague? Do they express their opinions in a clear and readable way that your staff and/or membership will understand? Employers occasionally rely on a service called Simpsons, which writes reports on arbitrators. The union-side bar has a less formal approach to sharing information but is forthcoming with their opinions when asked. I believe that the Union Lawyers Alliance may have a listserv for its members where lawyers can find arbitrator recommendations. 

Still not sure you are ready to trust someone new? Some parties who have multiple grievances pending agree to hire a new arbitrator to mediate a set of grievances. The parties pick 3-6 grievances and do oral presentations to the arbitrator, who then tries to help settle the cases. If they are unable to settle the cases, the arbitrator might offer a non-binding advisory opinion. The upside to this approach for the parties is the exposure to the arbitrator’s approach to cases, possible settlement of grievances, and a non-binding third-party opinion that may influence the parties’ positions on the case. There isn’t a downside except for the expense of the arbitrator’s per diem expense. Still, six cases for the price of one isn’t a bad deal.

The Cost of Arbitration

It’s easy to find out how much an arbitrator will charge. Arbitrators publish rate schedules and you can obtain one by asking the arbitrator directly. Some arbitrators post their rates on their websites. You can also obtain an arbitrator’s resume and rate schedule from the agencies that provide arbitrator rosters (AAA and FMCS, for example).

Arbitrators usually charge by the day (called a per diem rate). A “day” is typically up to eight hours for a hearing. Some arbitrators specify that they will charge a second “day” if the hearing exceeds eight hours.

Arbitrator’s per diem rates vary throughout the country. The Federal Mediation and Conciliation Service publishes an annual survey of per diem rates. Don’t judge an arbitrator on their per diem rate alone. Some charge a low rate but drag out the hearing or take a long time to write a report. While this conduct is rare (and possibly unethical), one arbitrator in New York City made the news when he charged more than a hundred hours on a case that had a one-day hearing. Most arbitrators would have written a decision in a couple of days.

Arbitrators are split on how they charge for studying the record and writing a decision. Some charge another full “day” for each day of study and writing, while other arbitrators charge a pro-rated fee. An arbitrator might charge $2400 for the hearing day and then $300 per hour for study and writing, while another charges $2400 for up to 8 hours of study and writing.

Arbitrators charge for travel expenses, including airfare, cabs/rideshare rides, hotels, trains, mileage, and tolls. Their rate schedule will specify limitations for travel. Some arbitrators may require the purchase of a refundable plane ticket or first-class passage if the trip will take longer than 3 hours. Many arbitrators also charge a pro-rated travel time if a trip will exceed a certain time or distance from their home. For example, I charge for travel time if the round trip will take more than 2 hours.

One of the most important parts of the arbitrator’s rate schedule is the cancellation fee, which is the cost the parties will incur if they do not cancel or reschedule the hearing within a certain time frame. Cancellation times vary widely among arbitrators and can be confusing, particularly about whether the arbitrator considers business days or calendar days. A good practice I’ve seen parties use is to send the chosen arbitrator a message that confirms the hearing date and the cancellation date. For an arbitrator with a 30-day cancellation period, the language would state: “This will confirm that the hearing date for this matter is March 26, 2024. It’s our understanding that the cancellation date for this matter is February 25, 2024. If that is not correct, please let us know.”

Arbitrator per diem rates don’t vary widely within regions. Some areas of the country don’t have enough work for arbitrators to do only labor cases, while other regions do. After you’ve seen a few arbitrator rate schedules, you’ll get a sense of what the range is in your area.  Arbitrators who do employment cases sometimes charge twice what labor arbitrators charge. Arbitrators who do other types of cases, like commercial arbitrators, tend to charge an even higher rate. Unions have smaller budgets and often avoid arbitrators whose rates exceed the average greatly. There’s a ceiling above which few parties would pay.

When considering an arbitrator for selection, it is more useful to note the expenses an arbitrator charges. Travel expenses and necessary meals are customary; office expenses like calendaring and copying are less customary but happen. Most of all, mind the cancellation fee. Always calendar the date you’ll incur a cancellation fee and try to settle or cancel the case before that to avoid incurring a fee you or your client didn’t expect.