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Collective Bargaining

Collective bargaining consists of negotiations between an employer and a group of employees that determine the conditions of employment. The result of collective bargaining procedure is called the collective bargaining agreement or CBA. Often employees are represented in the bargaining by a union or other labor organization. Collective bargaining is governed by federal and state statutory law, administrative agency regulations, and judicial decisions.

Unions and management engage in negotiations in order to reach a CBA agreement (contract). The law (National Labor Relation Act) requires that both sides "bargain in good faith." This means that they both must come to the table willing to give and take. Often, though, each side feels a need to "push" the other side in order to get what they want.

Management might, for example, engage in a publicity campaign against the union, furlough workers (temporary layoff), and in the direst of circumstances, lock out workers. In the past management took certain actions which are now illegal such as the hiring of armed thugs (the Pinkertons are an example), signing workers to yellow dog contracts (contract a worker signed that promised they would not join a union as a condition of their employment), and black listing (creation of lists of union organizers that would be circulated to other employees so that those on the list could not get jobs).

Unions also have a variety of weapons at their disposal. They might have a mass sick out, slow downs or have picket lines. They might engage in a boycott of the manufacturers product and they also might engage in a publicity campaign. Of course the last resort and strongest weapon for a union is the strike.

Sometimes, in the event of a strike management hires replacement workers, know derisively as scabs. Unions often respond with great venom to these workers who are threatening there jobs by making the strike less effective.

If both parties are headed towards a labor impasse certain steps may be taken outline below to avoid continued labor discord.

Fact Finding/Non Binding Arbitration

Fact Finding is typically a step taking to avoid labor impasse that occurs before mediation and arbitration. In fact finding, a neutral third party is hired to review the relevant labor dispute and to render a finding of fact. The finding of fact is the independent arbiters view of what has occurred in the labor dispute and what decision they would have made had they been empowered to make it. The difference between fact finders and non binding arbitration is that fact finders are usually those that are hired independently by either party. Non binding arbitration occurs when both parties agree to present their dispute together.

The purpose of fact finding and non binding arbitration is to push along negotiations by having an unbiased third party opinion. Typically one side then uses the findings as a crutch in negotiations.


Mediation is a process for resolving disputes with the aid of a neutral third party. The mediators role involves assisting parties, privately and collectively, to identify the issues in dispute and to develop proposals to resolve the disputes. The mediator is not empowered to decide any disputes; accordingly the mediator may meet privately and hold confidential and separate discussions with the parties to a dispute.

Mediation may be mandatory, under the terms of certain laws or court rules, or may be voluntary, by agreement of the parties. Some laws and court rulings have rules requiring mediation of disputes at some point in the litigation process. Voluntary arbitration may be undertaken when two parties agree in advance to submit any disputes to mediation. Such mediation clauses are common in agreements in which the parties seek to resolve their disputes in a manner which avoids hostility and preserves an ongoing relationship. Mediation agreements also may be made at the time a dispute arises.

A typical mediation might involve allowing each party to submit pre-mediation briefs which succinctly set forth the essence of the dispute, and each parties' position. At mediation, the mediator will typically conduct introductions, explain the mediation process, provide assurances of confidentiality, and give each party an opportunity to explain the dispute and the reasons behind the party's position. Many mediators will then meet privately with each party, and provide an evaluation of the dispute, pointing out the strengths and weaknesses of each party's position. The mediator may then, again in private, assist each party to determine both parties' genuine interests, and encourage each party to identify settlement proposals intended to address those interests. Typically, the mediator communicates settlement proposals to each party, and helps each party determine how best to respond to a settlement proposal.


In arbitration, a dispute is submitted to an arbitrator for a decision. Arbitration may be binding or non binding (advisory). Binding arbitration involves having a neutral person (or a panel of neutral persons) decide a dispute, after hearing each parties' presentation of evidence and argument. The parties agree in advance that the decision (award) of the neutral is to be final. Generally, there are no appeals from an arbitrator's award, though parties may seek judicial relief from binding arbitration if the arbitrator exceeds the authority conferred under the parties' agreement to arbitrate, or if the arbitrator denies a party a fair hearing, or demonstrates bias or prejudice. Also, parties may sometimes seek judicial relief if there is an obvious mistake, such as a calculation error, that appears on the face of an award.

Non binding arbitration (sometimes called advisory arbitration) operates in much the same fashion, except that the award of the arbitrator is not intended to be final or binding. Rather, the award is intended to provide guidance to the parties so that the parties can consider the persuasive influence of their positions, as reflected by the advisory arbitrator's award.

Arbitration may be court-ordered, for example, under court rules which mandate that certain disputes be submitted to arbitration. Or, arbitration may be mandatory, under the terms of rules or agreements to which the parties have agreed in advance of any dispute. For example the rules of the (United States) National Association of Securities Dealers require members to submit all disputes between them to binding arbitration.

In contrast, arbitration may be voluntary. Voluntary arbitration refers to the arbitration of a dispute submitted to an arbitrator by agreement of the parties. Typically, parties to a dispute submit their dispute to arbitration in order to minimize the expense, delay, or publicity which they perceive will accompany litigation. Voluntary arbitration is consensual. Parties enter into an agreement to arbitrate or a submission agreement. The Agreement to arbitrate may be entered into in advance of any dispute, and may, for example, be included in a dispute resolution clause of a contract. Parties may agree to arbitrate a dispute at the time a dispute arises, or at any time before a final judgment is entered in a court proceeding.

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