Why Binding Interest Arbitration Is Bad, For BOTH Sides

Binding Interest Arbitration when it applies to public schools is a BAD idea and it’s no coincidence it has been specifically banned in many cities nationwide. Let’s take a look at why such a method is so dangerous to the very fabric of our community’s democracy…

TEN REASONS WHY BINDING ARBITRATION OF
PUBLIC SECTOR LABOR DISPUTES IS NOT IN THE PUBLIC INTEREST

1. Binding arbitration discourages honest, good-faith collective bargaining. As long as this extra step is available, there is a possibility that a party will hold back on the compromise-making accommodations on which effective bargaining relies.

2. Binding arbitration places far-reaching power in the hands of a person not, elected, not accountable to elected officials and not necessarily a resident of the community or even the state involved. He is unlikely to be trained or experienced in municipal finances or administration. Yet, his decision constitutes, nonetheless, a mandate on the community leadership, which can force substantial changes in taxation, public policy priorities the ability to manage the work force.

3. The arbitrator is an ad hoc appointee with no continuing responsibility to make an award that is workable as well as just. There is no year-round accountability, contrary to the principles of representative government and sound public administration.

4. It is probably impossible to make an award for one group of workers without affecting other groups of municipal workers, yet an arbitrator has neither the authority nor responsibility to examine their situation. The ‘ripple’ effect of his decision could have a tidal wave effect on the city administration.

5. Contracts are not negotiated in isolation from past or future arrangements. It is difficult to make an award for one contract without dealing with how it fits generally into long-term labor relations, into future city plans, some of which are not yet formulated or expressed.

6. The process is unbalanced since it makes a no-risk or low-risk step available to a union or employee organization. Rarely will an arbitrator award a union less than what management has already offered.

7. Arbitrators tend to provide something for each side in their award regardless sometimes of the actual merits involved. Some cynics suggest this may be part of an arbitrator’s job-preservation program.

8. Arbitration is an expensive add-on to the bargaining process. There are the steadily rising fees of arbitrators and now a growing use of economic consultants to prepare a case and accompanying exhibits, and as one side goes down this path, the other almost has to follow in self-defense.

9. Arbitration is a time-consuming process. The Massachusetts League of Cities and Towns found the average length of time consumed in the arbitration phase alone was more than a full year.

10. There are serious questions of constitutionality as an unconstitutional delegation of legislative authority.

“We know that compulsory arbitration has been a failure. Slowly, inexorably, compulsory arbitration destroys sensible fiscal management. Arbitration awards have caused more damage to the public service in Detroit than the strikes they were designed to prevent.”

- Detroit Mayor, Coleman Young, National Journal, February 7, 1981 (Note: Mayor Young, as a state senator, was a sponsor of Michigan’s police and fire arbitration statute.)

 

“Never have the anti-democratic impulses found so fecund a method of undermining democracy at all levels of government — state, federal, and local — as the method implicit in public sector bargaining and arbitration. Like Pilate, all duly elected and appointed public officials in public sector bargaining communities can wash their hands of responsibility for the stupendous waste of public resources that the system entails. They can even put on a show of resisting union demands now and then, knowing that private arbitrators, who make a living by pleasing unions, will grant what the politicians denied.”

- Law professor Sylvester Petro, Government Union Review, Summer 1982.

 

“Other variations and nuances of final offer arbitration and of interest arbitration in general are numerous, but interest arbitration encounters at least one major problem in the public sector that does not apply when it is used in private employment. Permitting third parties not accountable to the electorate to resolve disputes over what should be the terms and conditions of public employment is widely regarded as inconsistent with our system of government. At least it is insofar as it is assumed that public personnel policies, like public policies generally, are to be made by officials accountable to the public.”

- Myron Lieberman and Gene Geisert, Teacher Union Bargaining Practice and Policy, Precept Press, 1994.

 

“In entering arbitration, most of the risk is assumed by the employer, who is subject to a costly award. It is rare to the point of non-existence, for the union to risk any decrease in current wages, salaries or working conditions. Therefore, experience to date indicates that many unions consider arbitration to be a non-risk or low-risk venture. Employers may urgently seek to arrive at a settlement in order to minimize their risk in arbitration. This combination of forces under Michigan labor law leads to the conclusion that there has been an inflationary bias in compulsory arbitration which has led some employers to grant wage increases and benefits in excess of what would have been granted in the absence of compulsory arbitration.”

- Eugene F. Berrodin, Assistant Director of the Michigan Municipal League, “What’s Wrong With Compulsory Arbitration?”

 

Binding Interest Arbitration undermines the very fabric of our democracy by putting the fate of an entire community in the hands of a single outside arbitrator, essentially circumventing the process of electing our officials and entrusting management decisions to them.

Such a tactic is bad for both sides in this situation because it directly affects the interests of all parties, potentially in very negative ways. The Board of Education consists of elected officials who we, as a community, have entrusted with the management of our school system. We should NEVER allow such a basic principle of American democracy to be circumvented through binding arbitration.

The town of Cranston, Rhode Island, recently passed a resolution that calls upon the Rhode Island General Assembly to oppose any legislation that would mandate binding arbitration for expired teacher contracts, citing many of the reasons we’ve mentioned about and specifically saying arbitrators ”do not have to answer to a voter.”

Many other cities across the country have adopted similar positions and have sought to ban Binding Interest Arbitration from their community affairs for the reasons mentioned in this article.

SOURCES FOR THIS ARTICLE:

1. Public Service Research Foundation
2. Cranston Patch, March 26, 2013
3. Massachusetts Municipal Association
4. Heritage Foundation, Binding Arbitration: A Bad Deal for Workers
5. Vermonters for Better Education Report
6. Nevada Policy Research Institute, Why Binding Arbitration Must Go
7. Newport Now, Schools Oppose Binding Arbitration
Share this article: