Should We Arbitrate This Grievance?

Factors in Deciding Whether to Withdraw, Settle, or Arbitrate A Grievance

Photo by Elena Mozhvilo on Unsplash

If my data is correct, only a small percentage of grievances go to arbitration. Of the 68 cases that I closed in 2023, I wrote 32 decisions and mediated one settlement. 22 of the cases were settled by the parties before the hearing. In 7 cases, the grievance was withdrawn, and I had three cases where the parties just went silent after a year. A fifty percent settlement rate is on par with my experience as an advocate. I also assume that a lot of grievances never get moved to arbitration. This column is about those cases that live in Step 3 and the arbitration hearing.

By the time the grievance has moved to the arbitration step, the parties are pretty firm that their view of the case is the correct one. It’s unlikely that both sides are correct. Once the steps of the grievance procedure have been met, it’s important to decide whether this grievance should go to arbitration. Here are the factors that influence this decision.

Cost

There’s an obvious economic cost to arbitration. The parties pay the arbitrator’s fees for hearing the case and writing the decision. The parties may retain a court reporter and pay for transcripts. Many times, parties hire outside lawyers. There is a soft cost to the lost productivity when witnesses need to be interviewed and for time spent preparing the case. Those are the costs incurred before the employer has to reckon with the remedy costs if they lose.

Time

Unless the parties take measures to ensure that the matter is heard and decided promptly, arbitration can take longer than the parties hope. From the perspective of a disciplined grievant, the long time frame is frustrating and demoralizing. For the employer, the growing cost of a potential back pay award is daunting. In contract cases, the parties may find themselves in bargaining for a new contract before the matter is even heard. When this happens, the parties should discuss all open grievances at the bargaining table to see whether settlement is possible in the context of a new agreement.

Effect on Other Grievances

An arbitration decision becomes a part of the contract. Therefore, it will affect other disputes. This can be a good thing or a bad thing. It’s good when an arbitrator resolves a dispute that clears up a long-simmering problem, reducing future grievances by clarifying the contract. It’s not good when an arbitrator rules so firmly against you that you need to contend with “bad language,” meaning language that deepens the dispute, for all your other grievances related to that area. In litigation, it’s often said that bad cases make bad law, and that is the case with grievances as well. Think through the impact of a bad decision on your organization’s long-term goals. Subsequent arbitrators are often bound by the prior arbitration award when it concerns the same language in the agreement.

Fear of other litigation

    Unions must consider their duty of fair representation to their members, and employers should be aware that this duty may compel unions to take a case to arbitration that the employer believes lacks any merit. The duty of fair representation means that a union must fairly represent each member. That doesn’t mean they have to take every grievance to arbitration. It means that the basis of the decision not to take a case to arbitration has to be based on the substantive merits of the case and not an administrative snafu. A union can even make an error in judgment about the substantive merits of the case and not be held liable for violating the duty.

The union may be held responsible if they make an administrative error in handling the grievance that results in the matter not going to arbitration. For example, if a union blows a timeline and the grievance is dismissed as untimely, the grievant may try to recover the lost wages and benefits from the union in federal court. However, a union can decide not to take a grievance to arbitration if they believe the grievance lacks merit. In short, the union must have a reason for withdrawing a grievance. I want to emphasize that there is no duty to take every case to arbitration. Employers should be aware of this consideration even if the union can’t tell them about it.

On the flip side, Employers are often concerned that aggrieved employees intend to sue them for discrimination or state law claims. When there is a collective bargaining agreement (or other contract) that requires arbitration, the employer may insist on pursuing discipline within the grievance procedure in an attempt to prevent litigation.

Merits of the Case

The biggest consideration in deciding whether to take a case to arbitration is the merits of the case. In other words, will you win? As soon as the parties decide to arbitrate, it’s a very good idea for both sides to make a list of the union’s and the employer’s arguments and note the evidence needed to support or refute that argument. Who are the witnesses? Will they testify willingly? Do you have all the documents you need, or do you need to do an information request?

Evaluating the merits of a grievance is one of the more difficult tasks a new practitioner faces when they get their first arbitration case. Here’s an example of the type of analysis that could be written by either side, with the evidence to support it noted in parentheses:

Employer’s Arguments

Video evidence of employee sleeping (video)

Supervisor witnessed employee and woke him (supervisor testimony)

Second time this has happened (documentation of prior discipline)

Clear work rules prohibit sleeping on the shop floor (documentation of rule and showing employee knew of rule)

Union’s Arguments

Employee admitted the behavior (employee testimony)

Employee apologized (employee testimony)

Employee is 26-year employee (stipulated)

He was resting his eyes during his break and inadvertently napped briefly. Slept in the break room, not on the shop floor (time records show he didn’t clock out of break)

Too often, arbitrators see advocates who are not prepared for arguments the other side raises or make arguments that have no basis. Preparing for arbitration early in the grievance process will either save you the expense of a difficult losing case or will help you prepare a stronger, more winning case.

Imagine you have made the notes above. It would be tough to conclude from those arguments whether you would win the case or not, and it will probably proceed to arbitration. In a lot of cases, however, taking the time to evaluate the merits of your case can help you decide whether to proceed to arbitration. It may also help you see a path to settlement, or even convince you to grant or withdraw the grievance. Even if it does not, your notes will be valuable when it comes to preparing for the hearing itself.

The reason I advise doing this analysis as soon as you move to arbitration is that you can revisit the analysis in three or six months - or whenever you go to arbitration - and see if anything has changed. Your best witness might have been fired. The grievant may have moved. A month before the hearing, you look at your notes and realize that the supervisor is gone and won’t testify, or that the employee now denies that it was him sleeping in the break room. These changes might cause you to re-evaluate your chances of winning and thus influence your willingness to present the case to an arbitrator. Even if the evidence is still available, you or your attorney will be glad you wrote yourself a road map when the case was fresh.

Remedy

The last factor to consider is the remedy. Remedies are complex enough to get their own class in law school, so I think they deserve their own post. Stay tuned for my next post, dedicated to what each party can win, or lose, in arbitration.

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