How may arbitration benefit or hinder either side in a labor dispute?


Labor Unions

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Posted on (Answer #1)

Arbitration in any given labor dispute could well help one side and hinder the other, although it does not necessarily do so.  

In an arbitration, the two sides will submit their proposals to an arbitrator.  The arbitrator decides between the proposals and the two sides must accept the decision.  This process may at times hurt the side with the stronger position.  If the two sides were to collectively bargain their issues, the stronger side would probably win.  But if they go to arbitration, the stronger side might have to mitigate its demands.  It might have to submit an offer that is less strongly in its favor.  It does this for fear that its offer will seem too extreme, causing the arbitrator to go with the other side's offer.

Therefore, going to arbitration may hurt the stronger side in a dispute, though it does not necessarily do so.

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