The Ascendancy of Employment Arbitrators in US Employment Relations: A New Actor in the American System?
| Author | Ronald L. Seeber,David B. Lipsky |
| Date | 01 December 2006 |
| DOI | http://doi.org/10.1111/j.1467-8543.2006.00521.x |
| Published date | 01 December 2006 |
British Journal of Industrial Relations
44:4 December 2006 0007– 1080 pp. 719– 756
© Blackwell Publishing Ltd/London School of Economics 2006. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
Blackwell Publishing Ltd.Oxford, UKBJIRBritish Journal of Industrial Relations0007-1080Blackwell Publishing Ltd/London School of Economics 2006December 2006444719756Special
Edition on New Actors in Industrial Relations
The Ascendancy of Employment ArbitratorsBritish Journal of Industrial Relations
Ronald L. Seeber and David B. Lipsky are at Cornell University.
The Ascendancy of Employment
Arbitrators in US Employment Relations:
A New Actor in the American System?
Ronald L. Seeber and David B. Lipsky
Abstract
In this paper, we survey the underpinnings of the trend towards employment
arbitration in the United States, and its implications for the broader industrial
relations system. Specifically, we address the question of whether or not employ-
ment arbitrators have been substituted for collective bargaining by the govern-
ment to an extent that warrants their inclusion as an actor in the industrial
relations system. We review developments in workplace dispute resolution in the
United States, the literature that attempts to explain these developments and
posit an assessment of the stability of employment arbitration, and employment
arbitrators, as a central feature of the US industrial relations system.
1. Introduction
In recent years, workplace dispute resolution has undergone dramatic
changes in the United States. A variety of forces have resulted in a fundamen-
tal shift in favour of private methods, rather than governmental or collective,
of resolving workplace disputes. Dissatisfaction with traditional methods of
resolving workplace disputes has caused many US employers to use alterna-
tive dispute resolution (ADR), especially mediation and arbitration. In the
United States, a growing number of scholars and practitioners are distin-
guishing labour arbitration (or mediation) from employment arbitration (or
mediation). Labour arbitration now refers to the arbitration of collective
labour–management disputes; employment arbitration refers to the arbitra-
tion of disputes arising between employers and non-unionized employees. As
recently as 20 years ago, employment arbitrators were rarely used in disputes
involving individual employees. Within the last decade, employment arbitra-
tors have become significant new participants in US employment relations.
Some observers regard the shift in dispute resolution from the courts and
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British Journal of Industrial Relations
© Blackwell Publishing Ltd/London School of Economics 2006.
other public forums to arbitration and other private forums as nothing less
than the
de facto
privatization of the American system of justice.
Whether or not employment arbitrators ought to be considered new actors
in the US industrial relations system depends on to what extent they are truly
playing a significant and influential role in the system. Dunlop maintained
that there were three actors in an industrial relations system: (1) ‘a hierarchy
of managers and their representatives in supervision’; (2) ‘a hierarchy of
workers (non-managerial) and any spokesman’; and (3) ‘specialized govern-
mental agencies (and specialized private agencies created by the first two
actors) concerned with workers, enterprises, and their relationships’ (Dunlop
1958: 7). Subsequent scholars have frequently referred to the three actors as
employers, unions and the State (i.e. government) (Bellemare 2000: 383–440).
We contend in this paper that if employment arbitrators are not already an
actor in the US industrial relations system, then a variety of forces will cause
them to emerge as an authentic actor in the foreseeable future. Essentially,
the government has subcontracted to arbitrators the task of interpreting and
applying the law of the workplace. If arbitrators are replacing the courts in
performing this governmental function, then it seems clear to us that they
ought to be considered a new actor in the system.
Our argument can be summarized briefly. For more than 30 years, the US
system has been undergoing a historic transformation (Kochan
et al
. 1986).
There are two significant features of that transformation that have led to
the emergence of employment arbitrators. The first feature is the growth in
the statutory regulation of US labour markets, motivated in large part by the
desire to protect the individual rights of American workers. The growth in
regulation resulted in dramatic increases in the number of employment dis-
putes that were litigated in federal and state courts. The burden these disputes
represented for both the court system and employers motivated the search
for alternative methods of resolving them.
The second feature of the transformation is the relative decline in the US
labour movement. Collective bargaining can be — and has been — used as
a means of resolving workplace disputes generally and statutory claims by
employees specifically. But the decline of collective bargaining had the effect
of depriving both employers and employees of a proven method of resolving
workplace disputes. Paradoxically, many American employers who have been
opposed to unions discovered that in the absence of collective bargaining they
were forced to rely increasingly on the court system to resolve statutory
complaints by their employees. Many employers coped with the growing
burden of employment disputes and the decline in collective bargaining by
developing their own means of handling these disputes, relying heavily on
arbitration and mediation. American judges, facing burgeoning dockets, have
been more than willing to delegate to employers the authority to resolve
public claims using private methods.
This article is a review of the literature on employment arbitration in the
United States. In addition to the work of other scholars, we draw heavily on
the studies we have conducted over the last decade or so on employment
The Ascendancy of Employment Arbitrators
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© Blackwell Publishing Ltd/London School of Economics 2006.
arbitration specifically and ADR more generally. In 1997, we conducted a
survey of the Fortune 1000 on their use of ADR, focusing particularly on
employment and mediation; our survey was targeted at the general counsel
of these companies, and we received responses from 606 of them (Lipsky and
Seeber 1998). In 1999, we conducted a survey of the 599 members of the
National Academy of Arbitrators (NAA), the premier organization of labour
arbitrators in the United States; our survey focused on the extent to which
these labour arbitrators had accepted employment arbitration cases and other
ADR work, and we obtained completed surveys from 462 Academy members
(Picher
et al
. 2000). Over the course of several years, we conducted (with
Richard D. Fincher) over 200 field interviews with managers and attorneys
in nearly 60 corporations in the United States with a view towards deepening
our understanding of the development of workplace dispute resolution sys-
tems in these organizations (Lipsky and Seeber 2003; Lipsky
et al
. 2003;
2004).
2. The origins of employment arbitration in the United States
The arbitration and mediation of statutorily based employment disputes in
non-union workplace settings has been growing in recent years in the United
States, Canada, and elsewhere (Lipsky
et al
. 2003); for recent developments
in the United Kingdom, see Colling (2004); Hughes and Pilling (2001); and
Tow ers and Brown (2000). Some observers have called the rise of ‘alternative
dispute resolution’ (ADR) in North America a ‘revolution’ in the method of
handling workplace disputes. In this article we focus on arbitration, rather
than mediation, because arbitrators in the United States have the authority
to make final and binding decisions whereas mediators are confined to assist-
ing disputants in reaching their own voluntary settlements. Thus, arbitration
in the United States, used as a means of resolving statutory claims, serves as
a substitute for the court system, but the use of mediation still allows dispu-
tants to have access to the courts.
As Elkouri and Elkouri point out, ‘Arbitration as an institution is not new,
having been in use many centuries before the beginning of the English com-
mon law’ (Elkouri and Elkouri 2003: 3). The arbitration of commercial dis-
putes has been a well-established technique for resolving disputes between
businesses for nearly 200 years; the arbitration of international disputes has
been used to settle disputes (and to avoid war) between nations since ancient
times (Elkouri and Elkouri 2003: 3–5).
The Development of Labour Arbitration in the United States
In the United States, the arbitration of labour–management disputes had its
origins in the nineteenth century and became the standard method of resolv-
ing grievance disputes after the Second World War (Barrett 2004; Elkouri and
Elkouri 2003: 5–7; Fleming 1965; Katz & Lipsky 1998: 145–61; Kheel 1999).
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