Professor Stephen Ware of the University of Kansas in Lawrence, KS, discusses how labor arbitration differs from most other arbitration in the United States. https://pennstatelaw.psu.edu/events/2020-arbitration-law-review-symposium

1. Labor Arbitration’s
Differences
Stephen J. Ware
Frank Edwards Tyler Distinguished Professor of Law
University of Kansas ware@ku.edu, 785.864.9209

2. Taught Not Taught
1. Contracts
2. Commercial Law:
Sales
3. Commercial Law:
Payments
4. Commercial Law:
Secured
Transactions
5. Consumer Law
6. Bankruptcy
7. ADR
8. Arbitration
1. Labor Law
2. Employment
Law
3. Labor ….
4. Employment
….

3. 1. FAA § 1
2. FAA v. LMRA
3. Union-Employer Relationship
4. “Grievance” arbitration
5. Substitute for “industrial strife”
6. Enforcement of pre-dispute agreement
to arb. statutory claims
7. Duty of Fair Representation
8. Claim Preclusion
9. Grounds for Vacating Arb. Award
10. Interest arbitration

4. FAA § 1
the FAA shall not apply “to contracts of
employment of seamen, railroad
employees, or any other class of workers
engaged in foreign or interstate
commerce.”
Seamen’s Union. Bill reintroduced next session
of Congress with Secretary Hoover's
exclusionary language added to § 1, which
eliminated organized labor's opposition.

5. FAA v. LMRA (Taft-Hartley Act)
LMRA says nothing about arbitration.
Courts prior to the LMRA split, but LMRA
subjected unions to suit, which
strengthened employers’ ability to compel
unions to comply with no-strike clauses in
CBAs.
“[T]he entire tenor of the [LMRA’s
legislative] history indicates that the
agreement to arbitrate grievance disputes
was considered as quid pro quo of a no-
strike agreement”.

6. Union-Employer Relationship
Made by 1932 Norris-LaGuardia Act and
1935 NLRA the sort of ongoing (stuck-
together) relationship worth more than
winning any particular dispute, that is, the
sort of relationship suited to arbitration.

7. “Grievance” arbitration
Why “grievance” instead of “claim”?
Would the grievance be actionable w/o
the arbitration agreement?

8. Substitute for “industrial strife”
United Steelworkers v. Warrior & Gulf
Navigation Co., 363 U.S. 574 (1960)
“The present federal policy is to promote
industrial stabilization through the
collective bargaining agreement. A major
factor in achieving industrial peace is the
inclusion of a provision for arbitration of
grievances in the collective bargaining
agreement.”

9. United Steelworkers v. Warrior & Gulf
Navigation Co., 363 U.S. 574 (1960)
“Thus the run of [non-labor] arbitration
cases * * * becomes irrelevant to our
problem. There the choice is between the
adjudication of cases or controversies in
courts * * * on the one hand and the
settlement of them in the more informal
arbitration tribunal on the other. In the
commercial case, arbitration is the
substitute for litigation. Here arbitration is
the substitute for industrial strife.”

10. Enforcement of pre-dispute agreement
to arb. statutory claims
Gilmer v. Interstate/Johnson Lane Corp.,
500 U.S. 20 (1991), was employment
quickly following antitrust, securities, etc.
But labor did not follow until 14 Penn
Plaza LLC v. Pyett, 556 U.S. 247 (2009),
and even then, maybe not completely.

11. Duty of Fair Representation
Union is party to CBA. Union does not
have to bring employee’s grievance to
arbitration, but DFR.
Anything like this outside labor context?

12. Claim Preclusion
Routinely given to non-labor arbitration
awards v.
Alexander v. Gardner-Denver Co., 415
U.S. 36 (1974), permits, after labor
arbitration, second bite at the apple (or is
it a different apple?)

13. Grounds for Vacating Arb. Award
FAA § 10 v.
“only when the arbitrator strays from
interpretation and application of the
agreement and effectively dispenses his
own brand of industrial justice that his
decision may be unenforceable.”
What about statutory claims?

14. “Interest” arbitration (arbitration to
create a new CBA).
Rare outside public-sector labor.
Why is these two parties reaching a deal
with each other so important? Why not
just deal with someone else instead?

15. Labor Arbitration’s Partial
Convergence:
1. Enforcement of pre-dispute
agreement to arb. statutory claims
2. Claim Preclusion
3. Grounds for Vacating Arb. Award

16. Partial Convergence
Enforcement of pre-dispute agreement
to arb. statutory claims
14 Penn Plaza LLC v. Pyett (2009)
“clear and unmistakable” CBA

17. Partial Convergence
Claim Preclusion
Despite 14 Penn Plaza v. Pyett
Still judicial resistance to finding that
arbitration resolved both contractual and
statutory claims.

18. Partial Convergence
Grounds for Vacating Arb. Award
In Stolt-Nielsen, S.A. v. AnimalFeeds Int'l
Corp., 559 U.S. 662 (2010), the Supreme
Court used its labor arbitration precedents
to interpret the FAA.

19. Grounds for Vacating Arb. Award
“Stolt-Nielsen: “It is only when [an] arbitrator
strays from interpretation and application of the
agreement and effectively ‘dispense[s] his own
brand of industrial justice’ that his decision may
be unenforceable.” [citing labor cases] In that
situation, an arbitration decision may be
vacated under § 10(a)(4) of the FAA on the
ground that the arbitrator ‘exceeded [his]
powers,’ for the task of an arbitrator is to
interpret and enforce a contract, not to make
public policy.”

20. Labor Arbitration’s
Differences
Stephen J. Ware
Frank Edwards Tyler Distinguished Professor of Law
University of Kansas ware@ku.edu, 785.864.9209