What is Labor Arbitration?

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  • Written By: A. Leverkuhn
  • Edited By: Andrew Jones
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  • Last Modified Date: 01 October 2019
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Labor arbitration is a kind of consensus-seeking process that is used to get agreements between management and labor. It is a form of labor negotiation that can help to address a grievance or a contract dispute, or simply assist in the alteration of an ongoing labor contract. Labor conflict arbitration as a form of job negotiation involves an impartial third party that will help bring labor and management to an agreement over wages, benefits, work conditions, or anything else.

As a form of collective employment arbitration, labor related arbitration is helpful when a labor union is not involved in the operation of a department or group of workers, and where this leads to some lack of concrete policy for dealing with problems. Where there is an ongoing contract in place, contract arbitration can help decrease some of the legal costs in administrating a labor department and make re-negotiating contracts easier. Labor arbitrating processes can replace some problematic policies on resolving labor contract issues, where other forms of legal resolution could take much longer, and affect productivity or even the functionality of a workplace.

There are different kinds of binding and non-binding labor arbitration available to companies. Binding arbitration is a form of labor arbitration where both parties agreed to accept the ruling of the third-party or arbitration company. Clauses can be built into labor arbitration to make some outcomes more predictable or concrete, serving the interest of resolving labor issues quickly.


Labor related arbitration can be especially valuable in municipal or public works departments, or other labor department such as local police forces or other skilled public administration workers. The municipal “employer” needs to craft working contracts with its police and other employees, and labor arbitration can help relatively unskilled managers accomplish this. A labor arbitration agreement can also be helpful in private companies where the work force is too small to be unionized, or in other non-union situations. Labor arbitration can also be involved in a management versus union process.

Labor arbitration agreements contain the details necessary for governing these kinds of resolution processes. They include provisions for the identity of arbitration parties, agreement of signing parties, and much more. Those involved in working on arbitration contracts can find more details from national groups like the American Arbitration Association (AAA). These organizations provide data for the arbitration community that helps many workplaces deal with various problems, and to expedite contract agreements and other kinds of labor agreements as necessary.


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Post 2

@sunnySkys - Well, no process for settling disputes is instantaneous. Still I think arbitration is a good solution for these types of problems.

I know this isn't exactly the same but my parents used arbitration services when they got divorced. Their divorce was much quicker and more painless than a lot of other people I know of.

Post 1

This sounds great in theory but it's not always as quick as the article makes it sound. I'm sure it is quicker than going to court, but collective bargaining takes time. Getting groups of people to agree on something can be a tough process- especially workers and management.

Case in point, in my area there was a dispute between some construction workers and their management. I remember seeing the protests and reading about it in the paper and it took months to resolve. And this was through labor arbitration, not the courts.

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