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
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
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
10. There are serious questions of constitutionality as an unconstitutional delegation of
"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
"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
"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
Eugene F. Berrodin, Assistant Director of the Michigan Municipal League, "What's Wrong
With Compulsory Arbitration?"