ARBITRATION PROCESS AND PROCEDURE – FROM “A” TO “Z”
By: Max V. Rieker, Esq.
As you may know, the OPBA conducted a series of member education seminars in April of this year. These events were well-attended and everyone involved undoubtedly benefitted from hearing arbitrators, factfinders, and various OPBA attorneys present on specific areas of expertise.
I presented at all three seminars (Cleveland, Columbus, and Toledo). I was not at all shocked to see how focused and like-minded the OPBA membership is throughout the state – which is a great thing. However, given the high number of cases that the OPBA arbitrates annually (i.e., probably more than any other organization in Ohio), I was shocked by how few members have actually participated in an arbitration hearing.
In a sense, this is a good thing because arbitration is an avenue of last resort. More often than not, if a member or group of members has an extremely good and persuasive case, it will be resolved favorably prior to arbitration. On the other hand, because binding contractual arbitration is such an integral part of what the OPBA does, it is also important that our membership have a good understanding of the process.
First of all, what is an “arbitration?” The word is derived from the Latin arbitratus, which means decided or judged. The concept of arbitration as we know it today was born out of common law, contract law, and finally statutes.
The first arbitrations, as we know them, were done in England after the Middle Ages and before the Industrial Revolution. The merchant classes in England found the sparse court system that did exist to be unreliable, unavailable, corrupt, and incompetent to render correct results based on industrial standards. In order to obtain the reliability that they needed, the merchants devised a private parallel system of industrial justice whereby professionals who are steeped in industry knowledge and experience would decide disputes based on factors important to the parties.
As the centuries moved forward, those industries that recognized the benefit of private binding arbitration began to include arbitration clauses in their routine contracts. (Exactly as the OPBA does today in our public sector labor contracts.) Even some of the most prominent of our Founding Fathers were arbitrators for disputes among merchants and planters.
Finally, as we moved toward modernity, society brought the force of statutory law to bear when it comes to contractual arbitrations. The Federal Arbitration Act of 1925 was a clear signal that the sanctity of the arbitration process was favored as a matter of public policy in the United States. Parties widely recognized that arbitration was, on average, less expensive that litigating matters in court, that it would produce a faster result, and that it would produce a more reliably correct result than one might receive from a judge or a jury.
So, now that we know how arbitration came to be and the general philosophy behind it, how does a modern arbitration work in practice?
The parties, through prior negotiation, mutually grant the arbitrator the power to decide whether or not the collective bargaining agreement has been violated, misinterpreted, or misapplied. Further, the parties give the arbitrator the ability to decide whether an enforceable “past practice” exists and how that past practice shall be enforced.
After the parties have appointed the arbitrator (which can be a rather lengthy and involved process), the parties and the arbitrator decide where and when the evidentiary hearing shall take place.
The arbitration hearing itself is a quasi-judicial proceeding. By law, by custom, and by rule, arbitrators have a wide latitude to oversee the proceeding and everything that is involved with the proceeding. Usually, prior to “going on the record,” the arbitrator will speak with counsel and “frame the issue.” This means, deciding what it is that the parties want the arbitrator to decide. More often than not, the arbitrator knows absolutely nothing about the case prior to this point in time.
For example, a discipline case should be framed as, “Was there just cause to issue discipline to the grievant, and if not what shall the remedy be?” More complicated cases may require more elaborate “framing.”
The next important item to understand is the burden of proof. In a disciplinary case, the employer always bears the burden of proof. In a non-disciplinary case where the union is alleging that the employer violated the labor contract, the union bears the burden of proof. This is quite important because, often, cases turn on narrow issues regarding whether the burden has been met.
So, what is the burden of proof? Simply put, a majority of arbitrators adopt the burden of “preponderance of the evidence” – meaning more likely than not. For example – it is more likely than not that the discipline was warranted or it is more likely than not that the employer violated the call-in procedure, etc.
The hearing itself is not open to the public. The resulting arbitration award and probably the parties’ exhibits and transcript will eventually become a public document by virtue of the fact that it will be in the possession of a public office, but the hearing itself is closed.
There may or may not be a court reporter, depending on whether the parties opt to hire one. Witnesses are sworn and must expose themselves to direct and cross examination upon penalty of perjury. The parties are given the opportunity to present witnesses and exhibits in support of their various arguments.
At the conclusion of the proceeding, the attorneys have a decision to make. They need to mutually decide whether to make closing arguments that day or submit what are called “post-hearing briefs.” These briefs are recitation of the facts, citations of law, and argument that take the place of a traditional closing argument. The question of whether to make a closing or submit a brief is the attorneys’ decision based on the level of complexity of the case.
Arbitrators usually render their decision or “award” about 30 days after the conclusion of the evidentiary hearing. This may also be upwards of 60-90 days, depending on whether the parties submit briefs.
The arbitrator’s award is binding. There is no “appeal” of an arbitration award in the laws of Ohio. There is, however, a statutory mechanism to “vacate” an arbitration award if the arbitration process itself has so far deviated from the customs and norms of arbitration that a court must set it aside. Vacating an arbitration award requires the moving party to meet an incredibly high standard. The requirements are contained in R.C. 2711.10. Essentially, the moving party must prove that the arbitrator made such obvious flaws in the process or outcome of the case that it is impossible for a court to permit the award to stand. Even when both parties agree that the outcome is faulty or when arbitrators have been asleep during parts of a hearing, courts have required the award to remain in effect.
Conversely, if one party obtains a favorable outcome at arbitration and the other party refuses to implement the terms of the arbitrator’s award, the winning party can go to court and have the arbitrator’s award enforced. If the losing party still refuses, a court can hold it in contempt and use all of the arrows that are contained in a judge’s quiver.
The bottom line is that it is incredibly difficult for either party to deviate from the award of an arbitrator. Generally speaking, parties can and do rely on the certainty of resolution through arbitration.
As always, if you have any specific questions related to your case, the best resource you have is your OPBA attorney. Please do not hesitate to call the OPBA for all of your needs in this area.