Chapter

Dispute Resolution Procedures

9

McGraw-Hill/IrwinAn Introduction to Collective Bargaining & Industrial Relations, 4e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

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Mediation

• Mediation is the most widely used, yet most informal, type of third-party intervention

- In mediation, a neutral party assists the union and management negotiators in reaching an agreement

- A mediator has no power to impose a settlement, but rather acts as a facilitator

- They must rely on persuasion and communications skills

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The Federal Mediation and Conciliation Service

• The NLRA requires that the party proposing changes in a contract must notify the Federal Mediation and Conciliation Service (FMCS) at least 30 days before the start of a strike

- The law does not require the parties to use mediation if they reach an impasse

- 15 - 20% of all cases in which 30-day strike notices were filed involved some informal (by telephone) type of mediation, and 8-10% involved formal mediation

- The Railway Labor Act requires mediation prior to impasse

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Mediation in the Public Sector

• Mediation is more commonly used in the public sector than in the private sector

- Almost all state statutes call for mediation as the first phase of impasse resolution for government employees

- In NY state, about 30% of all public negotiations reached an impasse and required mediation

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The Kinds of Disputes That Can Be Settled by Mediation

• Disputes that arise from poor communications and misunderstandings and lack of experience of the negotiators can benefit from mediation

- Disputes that arise from intraorganizational conflicts are difficult to resolve

- The less the mediator becomes involved in trying to mediate within one of the parties, the more likely he/she is to be accepted by both parties

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What Mediators Do

• The ultimate objective is to help the parties reach a settlement- Progress is measured by narrowing the differences and

not necessarily by reaching full agreement on each issue- Mediation helps the parties to informally move off their

bottom-line demands- Mediator tries to prevent holding back on concessions

they would make to avoid a strike- Since parties do not always share information directly

with the mediator, he/she must make assumptions from conversations

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The Traits of Successful Mediators

• The mediator must be acceptable to both parties- If the mediator subsequently becomes

unacceptable to both parties, he/she should withdraw from the case

- Mediation is an art and must be learned through trial and error

- Unions and management rated FMCS mediators either excellent or good in their knowledge and skills in 70-85% of cases

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“Excellent” or “very good” rating of mediator

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The Dynamics of Mediation in Traditional Bargaining

• The Initial Stage: Gaining Acceptability- In the initial stage, the mediator is primarily concerned

with gaining acceptability, determining the attitudinal climate, and the distribution of power within the negotiating teams

- This stage requires passive questioning and active listening

- In this stage, the parties are often testing the mediator - A mediator’s challenge is to accurately diagnose the

problems and move forward

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The Middle Stage: Probing for Potential Compromises

• Once the stalemate is overcome, the mediator tests for compromise and exchanges proposals

- The mediator at this stage may intervene more actively

- Sometimes an ulterior reason for delay may be present

- The mediator probes for the bottom line- Being too aggressive may hurt a settlement

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The Final Stage: The Push for Compromise

• With a sense that the time for settlement is at hand, the mediator becomes more aggressive

- Tries to get the parties to face reality and adjust their expectations

- The push for compromise should not identify the mediator with a specific settlement point

- Over identification with a solution can hurt the mediator if it fails

- In some cases, a “mediator’s proposal” is made• Helpful when the parties already agree, but

can’t publicly accept for political reasons

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Mediation in Interest-Based Bargaining

• The mediator in this case takes on the role of an active facilitator, teacher, and coach rather than a traditional mediator

- This approach is most successful:• When parties have elements of cooperation in place and

want to take it to the next level• If the parties don’t solve their problems, their will be

serious consequences• The key is to have a strong motivating factor

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Effects on Settlements

• Mediation has led to an agreement in 46% of the cases in which an FMCS mediator was involved in negotiations

- In another 35% of cases, mediation brought the parties closer together

- Mediation is more successful in units with less than 250 workers, and with women negotiators

- Over 90% of FMCS customers indicated they would use the FMCS mediators again

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The Potential Tension between What Is Right and What Will Bring a Settlement

• In theory, a mediator is not supposed to be concerned with the substance of the outcome, but simply to bring the parties together

• In interest based bargaining, the view is somewhat different- In this case, the substantive terms of the settlement are

as important to success as the settlement per se- As more parties use interest based bargaining, the

expectations of the mediator are likely to escalate

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Fact-Finding

• A third party is used to study the issues in dispute when an impasse has been reached

- The fact finder issues a report and often makes recommendations for an appropriate settlement

- It is assumed that this neutral report will bring pressure upon both parties to settle

- Rarely used in the private sector, and not required by the NLRA

- Fact-finding is part of the national emergency dispute procedures of the NLRA

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The Performance of Fact Finding

- The record of fact finding is mixed- In most cases, the recommendations do not

generate enough pressure for a settlement- Works better with inexperienced negotiators

• Which may explain why its use declined over time as negotiators became more adept

- It can be a useful device for a negotiator in convincing constituents to face reality

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Interest Arbitration

• Involves using a third party who is empowered to impose a settlement

• The arbitrator sets the terms of the contract- Not used very often in the private sector- Some argue that it be limited to Taft-Hartley

emergencies

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The Use of Interest Arbitration in the Public Sector

• Most states initially turned to fact-finding as a compromise between the right to strike and compulsory interest arbitration

• About half of the states that endorsed collective bargaining for public employees turned to some form of arbitration for police and firefighters

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Types of Interest Arbitration

• Voluntary arbitration• Compulsory arbitration• Conventional arbitration: In this form, the arbitrator is

free to fashion his or her award• Final Offer Arbitration: The arbitrator must choose

either the employer’s proposal or the union’s; maybe as a package or on an issue-by-issue basis

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The Terminology of Various Types of Interest Arbitration

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Debates over the Performance and Effects of Interest Arbitration

• Interest arbitration in the public sector has a better record of preventing strikes than fact-finding or bargaining without any impasse procedure

- The rate of use rarely exceeded 25%- It tends to narrow the range of settlements across a

state and eliminates very high or low contracts- Arbitration tends to raise wage levels 5-10%

higher than wages where not available

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Voluntary Interest Arbitration in the Private Sector

• A number of voluntary interest arbitration schemes have been used in the private sector

- In electrical construction, large construction projects, and newspapers

• The only significant private sector use of interest arbitration now occurs in major league baseball

• It has also been used on an ad hoc basis as a conflict resolution device of last resort

- Such as with the U.S. Postal Service

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Interest Arbitration Structure and Process

• A wide array of choices is available for designing the structure of interest arbitration systems

• The system chosen reflects the parties fundamental views on the interest arbitration system

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Combined Mediation-Arbitration Approach

• Considered an extension of the collective bargaining process

• The arbitrator seeks to shape an award that is acceptable to the parties

- A forum for continued negotiations or mediation with the arbitrator holding the authority to decide

- Advocates feel that no system of interest arbitration will survive long unless it produces outcomes that are acceptable to the parties

- Parties attempt to limit the discretion of the arbitrator

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The Judicial Approach

• In the judicial approach, the arbitrator adheres strictly to predetermined criteria

• Arbitrator is not influenced by the bargaining power or preferences of the parties

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The Influence of Arbitration Structure

• The structure of an interest arbitration system can influence which of the two types will prevail

• The mediation-arbitration process is favored when:- Selection of the arbitrator is by the parties- Tripartite structure - Use of private ad hoc arbitrators appointed on a case-

by-case basis, or arbitrators who remain mutually acceptable

- Decision making standards that are flexible- Judicial review of procedure and not the merits of the

award

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Nontraditional Dispute Resolution

• Focuses on a team-building effort and problem resolution on an ongoing basis

- The arbitrator acts as a “consultant” with technical expertise

- Time horizon tends to be long and focuses not on an impasse but a long term relationship

- Requires parties to share information readily- In response to increased demand, the FMCS has

increased its emphasis on “preventive mediation”

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Key Organizations and Agencies Involved in Impasse Resolution

- American Arbitration Association (AAA)- Federal Mediation and Conciliation Service- National Academy of Arbitrators- National Mediation Board- State mediation and conciliation agencies

• In states with public employee bargaining rights, there is a separate agency concerned with the process (in New York state, the Public Employment Relations Board)

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Summary

• The chapter describes three major impasse resolution procedures - mediation, fact-finding, and interest arbitration

• Mediation has been commonly used in both the private and public sectors

• Fact-finding and interest arbitration primarily in the public sector.

• The procedures vary extensively