Thursday, October 08, 2009

On Arbitration

A commenter says:

This arbitration business has been in the news lately, and it doesn't seem like a particularly fair, equitable setup ...

Third party arbitration has been the standard way to resolve union/company conflicts since forever. Are they fair and equitable? I would tell you that on smaller issues they're not too bad. TAG has won as many arbitration as it's lost; in fact, it's probably won more.

But on big ticket items, group grievances that impact a division, company or a whole part of the entertainment issue, guilds and unions are rodents, and conglomerates are the equivalent of a T. Rex. They seldom if ever win those arbitrations ...

...Since I've never had any experience with [arbitrations], I'm curious as to your experience, and whether you feel there is any built-in advantage to the studios over the employee/union. Do you feel the system is fair, and a level playing field?

Forget the "level playing field" thing, and "fair" is a word I'm always suspicious of, since it's in the eye of the beholder.

There was only a ten-year period in U.S. history when the turf wasn't heavily slanted against labor, and that was from the time of the Fair Labor Standards Act in the mid 1930s, to the Taft-Hartley Act in 1946. Aside from that one decade, companies have had the upper hand.

As I say, TAG has won its share of garden variety grievance arbitrations. (There's the wrinkle that many potential grievants fear getting black or gray-listed, and so don't file full-bore grievances, but that's a slightly different issue.) However, the one huge grievance that the local has had, an Disney-TAG grievance/arbitration that took two years and cost (on TAG's side) $200,000+ dollars. The grievance was over the layoffs of 200 Disney staffers in 2001-2002, and whether those layoffs were actually "technological change" displacements that required x number of weeks of "displacement pay."

The grievance went on for the better part of two years, and I won't bore you with endless details. In the end, we lost.

The arbitrator was a very nice person from northern California. Drove a Prius. Was a college prof. And he ruled against us. After his ruling, a Vice-President at Warner Bros, a lawyer, took me to lunch. The Veep told me:

"Steve? Do you know that unions have never won a big, sweeping grievance? Never? The Writers Guild of America just finished a big arbitration about payments for rewrites. The same arbitrator who did your case did the writers' case too. And he ruled against the WGA, just like he ruled against you.

"Unions have never won a big award against companies. It just doesn't happen."

I'm a strong union guy (duh). I believe in what unions do, believe in their mission. But one thing I'm not is delusional. Corporations benefit from an arbitration system. (To be fair, unions also benefit in many instances. Going through courts is time-consuming and expensive.) And arbitrators aren't stupid. They know that if they hand down too many rulings against a given company, that company won't agree to use them on future arbitrations. (Unions and companies choose arbitrators off a list of people acceptable to both sides.)

Here's the bottom line: If the arbitration system in union collective bargaining agreements weren't helpful to corporations, they wouldn't be there. And unions find arbitrations useful as well, because the alternative -- lots of court cases -- would be way more costly. And labor organizations are not creatures with endless amounts of money.

We live in a corporatist age, and I don't think union arbitration is going to change anytime soon. The arbitration system in place is the arbitration system we'll continue to have.


Anonymous said...

Cool, Steve, thanks for your thoughts on this.

From your post, it sounds as though the client who uses the arbitration process the most has an inherent advantage, as the arbitrator has a financial incentive to ingratiate him/herself to that client.

That sounds like a serious enough problem to warrant some reform action. Any system where the arbiter stands to benefit for deciding on a given side is an inherently corrupt system, no?

While, as you say, it may be to the union's advantage on small-bore grievances, the fact that when push comes to shove, the corporation will win the big issues speaks to the fact that over the long haul, our unions will suffer a war of gradual attrition.

Steve Hulett said...

Unions have been on the down-slope for a long, long time.

For we live in a corporatist age.

This doesn't thrill me at all, but I like to bow to reality. It is, as Michael Steele might say, the way I roll.

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