The Force of Law on Bargaining Strategies: Impasse, Arbitration, and Market Forces

27 Pages Posted: 20 Nov 2002

See all articles by Ellen Dannin

Ellen Dannin


Gangaram Singh

San Diego State University - Department of Management


The authors here explore the question whether law affects collective bargaining. To do so the authors use simulations to examine the impact of three different impasse resolution laws on collective bargaining: the private sector law that allows an employer to implement its offer at impasse and to permanently replace strikers; impasse arbitration; and the use of market forces. Subjects reacted in markedly distinctive ways to each impasse law. These reactions have potential implications for current law reform proposals.

Each of the systems for resolving impasse explored here presents unique issues. The challenge for a system that resolves impasses by relying on implementation of employer final offers and striker replacement, as does the private sector, is, first, that it creates doctrinal problems that do not fit comfortably within the framework of the NLRA and that seem likely create a highly unbalanced system of bargaining. The simulations here suggest that it may indeed unbalance bargaining power. It was also perceived as highly unfair by the participants, including by the employer groups. Even though a simulation is not reality, it is worth considering whether a system that is perceived as unfair, even by those who benefit from it can achieve the NLRA's goal of labor peace.

The alternatives to private sector impasse resolution - interest arbitration and the market model - have theoretical appeal for various reasons. Those who advocate reaching an agreement and reaching it in a rational and fair way would find interest arbitration attractive. On the other hand, those who prefer less government intervention in the ordering of the workplace ought to like Regime C. The simulations, however, suggest additional considerations. Both employer and union simulation participants were satisfied with the operation of impasse arbitration. This suggests that interest arbitration may be likely to lead to labor peace and support for the system. Regime C was perceived as giving unions much greater power than employers. The responses suggest it might lead to deeply felt grievances on the part of employers. What it would take to alleviate that sense of unfairness without causing unions to feel aggrieved is impossible to say with current information, but worth considering in future studies.

Finally, these simulations confirm that law matters by playing a role in shaping behavior. Each of these regimes was the same with the sole exception of the law of impasse resolution, and that fact alone had a powerful effect beyond that single event.

Suggested Citation

Dannin, Ellen and Singh, Gangaram, The Force of Law on Bargaining Strategies: Impasse, Arbitration, and Market Forces. Available at SSRN: or

Gangaram Singh

San Diego State University - Department of Management ( email )

5500 Campanile Drive
San Diego, CA 92182-8230
United States
619-594-2201 (Phone)
619-594-3272 (Fax)

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