What is the difference between mediation and arbitration in labor disputes

Hirschler's Construction Law Blog provides relevant and practical information on a wide array of issues covering the construction process from concept to close-out facing all construction professionals—from design professionals, to contractors, and lower-tier contractors and suppliers. The mediator is not a decision-maker.

Rather, the mediator assists the parties through facilitating a negotiation. Neither party can be forced to settle the dispute. The benefits of mediation can be a quicker resolution of the dispute and, in many instances, there can be creative solutions rather than just an exchange of money.

The parties are also in control of the outcome. Contrary to mediation, litigation and arbitration are binding forms of dispute resolution where a judge or an arbitrator hears evidence and renders a decision.

Historically, construction industry contracts and policy have favored arbitration over litigation as the preferred form of binding dispute resolution. This is primarily because the parties can select an arbitrator or panel of arbitrators with knowledge of the construction industry. Arbitrators can be design professionals or contractors but, typically, are lawyers whose practice focuses on construction matters.

The arbitration process is also viewed as being more streamlined in the discovery process. However, that process really depends on the complexity of the dispute because arbitrators have a fair amount of flexibility in what discovery to grant the parties. Litigation is where a judge or a jury decides the case instead of an arbitrator. A mediator assists the parties in identifying and articulating their own interests, priorities, needs and wishes to each other.

Arbitration and mediation both promote the same ideals, such as access to justice, a prompt hearing, fair outcomes and reduced congestion in the courts. Mediation, however, is a voluntary and non-binding process - it is a creative alternative to the court system.

Mediation often is successful because it offers parties the rare opportunity to directly express their own interests and anxieties relevant to the dispute. In addition, mediation provides parties with the opportunity to develop a mutually satisfying outcome by creating solutions that are uniquely tailored to meet the needs of the particular parties.

A mediator is a neutral and impartial person; mediators do not decide or judge, but instead becomes an active driver during the negotiation between the parties.

A mediator uses specialized communication techniques and negotiation techniques to assist the parties in reaching optimal solutions. Mediation is a structured process with a number of procedural stages in which the mediator assists the parties in resolving their disputes.

The mediator and the parties follow a specific set of protocols that require everyone involved to be working together. This process permits the mediator and disputants to focus on the real problems and actual difficulties between the parties.

Moreover, the parties are free to express their own interests and needs through an open dialogue in a less adversarial setting than a courtroom. The main aim of mediation is to assist people in dedicating more time and attention to the creation of a voluntary, functional and durable agreement.

The parties themselves posses the power to control the process- they reserve the right to determine the parameters of the agreement. In mediation, the parties also reserve the right to stop anytime and refer a dispute to the court system or perhaps arbitration. In addition to economic and legal skills, mediators are professionals who possess specialized technical training in the resolution of disputes. After analyzing a dispute, a mediator can help parties to articulate a final agreement and resolve their dispute.

The aim of mediation is to find a mutually satisfactory agreement that all parties believe is beneficial. Their agreement serves as a landmark and reminds parties of their historical, confrontational period, and ultimately helps them anticipate the potential for future disputes. Generally, an agreement reached through mediation specifies time periods for performance and is customarily specific, measurable, achievable, and realistic.

It is advisable for the parties to put their agreement in writing to create tangible evidence that they accomplished something together. The written agreement reminds the parties of their newly achieved common ground and helps to prevent arguments and misunderstandings afterward.

Most importantly, a written agreement provides a clear ending point to the mediation process. The agreement binds the parties contractually. In case of disputes concerning compliance with the mediated agreement e. Enforceability is necessary for mediation, as an ADR process, to possess any legal strength or to impose any liability on the parties.

It should be noted that, in the United States, compliance with mediated settlement agreements is high because the parties, themselves, create the terms of the settlement agreement. Thus, enforcement proceedings are relatively rare because the parties voluntarily carry out their own agreements.

A transactional contract is one in which the parties, with concessions to each other, resolve and terminate the present dispute between them. With the same contract, they also resolve the issues that can arise in the future. Disputing parties can initiate mediation anytime, whenever they believe it would be beneficial. Disputes reach mediation in a number of different ways such as through consent of the parties, a mediation clause in a contract, or even a court order.

Parties to a contract may be required to submit a dispute to mediation according to insertion mediation clauses in their contracts. Under such a clause, the parties usually retain the right to choose their mediator and to schedule the mediation session on mutually agreeable date.

If the parties do not arrive at any settlement agreement as a result of the mediation process, they are always allowed to go to arbitration or litigation; thus, mediation does not deprive parties of their right to due process. As laid out in I. These types of clauses have to be signed separately by the parties. Such a clause can be vexatious if not signed separately and knowingly by each party because they can ultimately limit options and deprive parties of their due process rights under the traditional judicial system.

Again, a contractual mediation clause is not vexatious, because the parties can always take their dispute through the ordinary judicial channels or utilize arbitration for resolution, without any penalty for doing so.

There are some particular advantages that exist in choosing an alternative method of dispute resolution ADR such as mediation or arbitration, as opposed to pursuing ordinary judicial proceedings. The first advantage concerns the all-important consideration of economics and the daunting costs of resolving disputes; arbitration and mediation proceedings are by far cheaper in monetary expense than ordinary judicial proceedings. Mediation fees vary in accordance with the hourly rate of the mediator and the length of the mediation session, and are usually shared equally by the parties participating in the mediation.

Another important advantage of alternative dispute resolution proceedings is in the decreased time these proceedings customarily take as opposed to the traditionally litigated dispute. Mediation is regarded to be more time-efficient than even arbitration, since proceedings have the potential to come to a productive close in under 3 hours.

What substantially sets mediation apart from traditional judicial proceedings and even arbitration is that the parties strive personally to find common ground, and they work to develop mutually agreeable solutions directly with each other and without any exterior imposition of a decision by a judge or arbitrator. The efficiency of the mediation process is evident in that it aims to avoid further complication of the dispute and animosity between the parties- a mediator actively uses specialized communication and negotiation techniques to guide the parties to the realization of a mutually beneficial agreement.

Another advantage of mediation, specifically, is that is seeks to generate an agreement that is realistic, which takes into consideration the financial condition of the parties as well as all other relevant circumstances and factors.

Again, mediation is a voluntary process and often it produces such desirable results because it permits parties to express their own interests and anxieties directly, while helping them to create a suitable solution. Generally, choosing arbitration or mediation is attractive to parties because they get to participate in these proceeding more directly than they would in a courtroom or in a litigated dispute proceeding. However in arbitration, the arbitrator still makes the final determinations of fault and compensation, and the parties must accept those decisions as though they were made by a judge.

Another important difference between arbitration and mediation exists in regards to choosing the neutral party. In choosing an arbitrator, the parties seek to select an individual that possesses particular legal skills, knowledge and competence.

With the exception of non-binding arbitration in Italy, the arbitrator determines that outcome of the dispute according to traditional legal principles, so the arbitrator must be highly knowledgeable in the relevant area of law. Arbitration and mediation are parts of the labor relations process. Arbitration is the procedure by which parties agree to submit their disputes to an independent neutral third party, known as an arbitrator.

Although there are several types of arbitration, labor arbitration is the dispute resolution procedure used in labor relations. Mediation also involves the active participation of a neutral third party whose role is to facilitate the dispute resolution process and to suggest solutions to resolve disputes.

The term conciliation is often used interchangeably with mediation, but conciliation generally refers to the third party who brings the disputing parties together.

While the mediator suggests possible solutions to the disputing parties, the arbitrator makes a final decision on the labor dispute which is binding on the parties. As a process, arbitration predates English common law and has been called the oldest form of dispute settlement. King Solomon was an arbitrator and arbitration was used to settle differences during the Greco-Roman period. George Washington was an advocate of arbitration and, in his will, mandated using the process if disputes arose over his estate.

The use of arbitration in labor disputes was a common practice in the late 19th century but developed more rapidly after World War II as a substitute for work stoppages. The board heard over 20, labor disputes during the war and frequently mandated that future cases employ arbitration. The president's National Labor-Management Conference of also recommended the application of the arbitration process to settle labor disputes.

In the collective bargaining process, labor arbitration is generally the final stage of resolution. Labor unions and management develop a collective bargaining agreement that details the rights of labor, the responsibilities of management, and the ultimate relationship between the two.

Nearly all 96 percent of these collective bargaining agreements provide for arbitration as the final step in dispute resolution. Arbitration can represent either all employees covered by the agreement or a specific individual on one side and management concerns on the other.

Arbitration holds advantages over both strikes and litigation as a means of resolving disputes. Even the U. Supreme Court has determined that arbitration is the preferred method of resolution in reaching a workable solution to labor problems.

A major advantage to arbitration is the cost, especially when compared to the expense of litigation. The NAA was founded in as a nonprofit organization to foster high standards for arbitration and arbitrators and to promote the process.

Through seminars, annual conferences, and educational programs, the NAA works to attain its objectives. The AAA is also nonprofit and offers its services for voluntary arbitration to meet its objective: promoting the use of arbitration in all fields. Meetings and educational programs highlight AAA efforts, although the organization does not arbitrate.

The FMCS maintains a roster from which arbitrators can be selected and suggests procedures and guidelines to enhance the arbitration process.

The labor arbitration process involves an arbitrator and representatives of both labor and management. The arbitrator is either a permanent arbitrator, an independent arbitrator selected by the two parties to resolve a particular grievance, or an arbitrator selected through the procedures of the AAA or FMCS. A board of arbitrators can also be used in a hearing.

After selection, the arbitrator then hears from both sides of the issue with testimony and evidence provided in much the same way as a court proceeding. Upon completion of the arbitration hearing, the arbitrator reviews the evidence, testimony, and the collective bargaining agreement, considers principles of arbitration, and makes a decision. The arbitrator's decision is generally rendered within 60 days, and, when all parties agree, is submitted for possible publication by one of several commercial publishers, either the U.

Fewer than 10 percent of these decisions are published.