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Arbitration Lesson #3 - History part 1
July 10, 2006 by Ross Runkel at LawMemo
Today: The history of collective bargaining arbitration, or traditional labor arbitration. Next: The history of individual agreements to arbitrate.
Organized labor has long demanded that collective bargaining agreements contain arbitration clauses. One hundred years ago labor unions distrusted judges and the court system. Judges has issued injunctions against peaceful strikes and picketing, blocked their efforts to organize employees, and jailed their leaders. They did not want judges interpreting their hard-won labor contracts.
Many employers resisted arbitration, mostly because they didn't want outsiders second-guessing their decisions. Litigation was a better forum for them because the cost of litigation would keep down the number of claims and because many judges had pro-management leanings.
Today almost every collective bargaining agreement has an arbitration clause. The main reasons are that agreeing to arbitration is necessary in order to settle contract negotiations, the employer gains a trade-off when the union agrees not to go on strike during the term of the agreement, and the employer gains advantages from arbitration.
In the unionized portion of the private sector the alternative to arbitration is not litigation, it is the strike. Unions see the strike, not litigation, as the alternative method of enforcing their labor agreements. Therefore, the costs and benefits of labor arbitration must be weighed against the costs and benefits of strikes.
During the 20th century the law changed dramatically. Prior to the Taft-Hartley Act of 1947, the enforcement of collective bargaining agreements was a matter for state courts, and they applied state law. In many states pre-dispute agreements to arbitrate could not be enforced at all. In some states an employer's refusal to honor an arbitration agreement resulted in an award of money damages, but the union still could not force the employer to actually engage in arbitration.
In 1947, the Taft-Hartley Act gave unions the right to sue in federal court to enforce their collective agreements. Labor Management Relations Act of 1947 § 301; 29 U.S.C. § 185. That meant unions could get a court to force an employer to arbitrate.
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