Compulsory Arbitration

Definition

Compulsory Arbitration: The forceful submission of a labor dispute to a neutral third party, such as a government body or the American Arbitration Association, for resolution. This method is also known as binding arbitration, where both parties are required to accept the arbitrator’s decision. It is often mandated in specific legal contexts and typically used to avoid prolonged and potentially harmful disputes.

Examples

Government-Mandated Arbitration: In some countries, if labor strikes or lockouts threaten essential services, the government might mandate compulsory arbitration to ensure the continuation of these services. For example, disputes between police officers and their municipal employers may be subjected to compulsory arbitration.
Railway Labor Act (USA): Under the Railway Labor Act, disputes in the railway and airline industries in the United States may be subject to compulsory arbitration if they threaten to disrupt interstate commerce.
Public Sector Disputes: In various regions, disputes involving public sector workers, such as teachers or firefighters, might be resolved through compulsory arbitration to prevent disruptions in essential public services.

Frequently Asked Questions

What is the difference between compulsory arbitration and voluntary arbitration?

Compulsory arbitration is mandated by law or agreement, requiring both parties to submit to and accept the arbitrator’s decision. Voluntary arbitration is entered into freely by both parties who agree to abide by the arbitrator’s decision without any legal requirement to do so.

Why do labor unions oppose compulsory arbitration?

Labor unions often oppose compulsory arbitration because it limits their ability to use economic pressure, such as strikes, to negotiate more favorable terms. They prefer voluntary arbitration or collective bargaining, which provides more negotiation leverage.

Are the decisions in compulsory arbitration appealable?

Generally, decisions in compulsory arbitration are binding and final, with limited grounds for appeal. Appeals, if allowed, are typically only for procedural errors or misconduct by the arbitrator.

Which industries commonly encounter compulsory arbitration?

Industries where public welfare is a concern, such as transportation (rail and airlines), public utilities, and public safety (police, fire services), commonly encounter compulsory arbitration.

Can parties select their arbitrator in compulsory arbitration?

The process for selecting arbitrators in compulsory arbitration is typically defined by the governing statutes or arbitration rules, and it may involve a predefined list of certified arbitrators.

Collective Bargaining: A process of negotiation between employers and a group of employees aimed at agreements to regulate working conditions.
Binding Arbitration: A type of arbitration where the parties agree to accept the arbitrator’s decision as final and legally binding.
Economic Pressure: Strategies like strikes or lockouts used by labor and employers in negotiations to achieve favorable outcomes.
Voluntary Arbitration: Arbitration entered into freely by both parties without any legal mandate, contrasted with compulsory arbitration.
American Arbitration Association (AAA): A nonprofit organization that provides services to individuals and organizations who wish to resolve conflicts out of court.

Online References

Suggested Books for Further Studies

Labor Relations and Collective Bargaining: Private and Public Sectors by Michael R. Carrell and Christina Heavrin
Arbitration and Mediation in International Business by Christian Buhring-Uhle
The Essence of International Trade Law: A Guide by Debora Klein

Fundamentals of Compulsory Arbitration: Labor Law Basics Quiz

### What is compulsory arbitration primarily used for? - [ ] Voluntary negotiations between individual employees and employers. - [x] The forceful submission of disputes to a neutral third party for resolution. - [ ] The creation of new laws regarding labor disputes. - [ ] The drafting and enforcing of corporate policy. > **Explanation:** Compulsory arbitration is used for the forceful submission of disputes to a neutral third party, whose decision is binding on both parties involved. ### Which body often handles compulsory arbitration cases in the United States? - [ ] The Supreme Court - [ ] The Federal Trade Commission - [x] The American Arbitration Association - [ ] The Environmental Protection Agency > **Explanation:** The American Arbitration Association (AAA) is commonly involved in handling arbitration cases in the United States, including compulsory arbitration cases. ### Why do labor unions often oppose compulsory arbitration? - [x] It limits their ability to use economic pressure like strikes. - [ ] It always results in unfavorable outcomes for the union. - [ ] It is more expensive than other dispute resolution methods. - [ ] It involves prolonged court procedures. > **Explanation:** Labor unions oppose compulsory arbitration because it limits their ability to use strikes and other forms of economic pressure, which are powerful negotiation tools. ### What is the outcome of compulsory arbitration? - [ ] An optional recommendation for dispute resolution. - [ ] A temporary settlement until further negotiations. - [x] A legally binding decision. - [ ] A preliminary assessment for future negotiations. > **Explanation:** The outcome of compulsory arbitration is a legally binding decision that both parties must adhere to. ### In which sector is compulsory arbitration most commonly used? - [ ] Retail - [ ] Technology - [x] Public services such as police, fire services - [ ] Entertainment > **Explanation:** Compulsory arbitration is most commonly used in public services where the welfare of the public is a major concern, such as police and fire services. ### Is the decision in compulsory arbitration final and unappealable? - [ ] Always unappealable. - [ ] Completely non-binding. - [x] Typically, binding with limited grounds for appeal. - [ ] Entirely voluntary for both parties. > **Explanation:** The decision in compulsory arbitration is typically binding with limited grounds for appeal, often restricted to procedural errors or arbitrator misconduct. ### Which term is closely related to compulsory arbitration? - [x] Binding Arbitration - [ ] Mediation - [ ] Negotiation - [ ] Consultancy > **Explanation:** "Binding Arbitration" is closely related to compulsory arbitration as they both result in a final and enforceable decision. ### What method do labor unions usually prefer over compulsory arbitration? - [ ] Binding contracts - [ ] Government intervention - [x] Collective bargaining - [ ] Profit sharing > **Explanation:** Labor unions usually prefer collective bargaining over compulsory arbitration because it allows for more direct influence and use of economic pressure like strikes. ### Which law in the U.S. allows for compulsory arbitration in the transport sector? - [x] The Railway Labor Act - [ ] The Fair Labor Standards Act - [ ] The Wagner Act - [ ] The Occupational Safety and Health Act > **Explanation:** The Railway Labor Act allows for compulsory arbitration in the railway and airline industries in the United States to avoid disruptions in interstate commerce. ### Why might compulsory arbitration be mandated in a labor dispute? - [ ] To extend negotiation deadlines. - [x] To prevent disruptions in essential services. - [ ] To reduce costs for the negotiating parties. - [ ] To increase governmental control over private companies. > **Explanation:** Compulsory arbitration may be mandated to prevent disruptions in essential services that are critical to public welfare.

Thank you for exploring the detailed aspects of compulsory arbitration and testing your knowledge with our focused quiz. Keep advancing your understanding of labor law!