Private Justice in the Shadow of Public Courts: The Autonomy of Workplace Arbitration Systems
88 Pages Posted: 26 Jun 2007
The Supreme Court's 2000-2001 term showed a continuing emphasis on promoting workplace arbitration. In three pertinent decisions, the Court strengthened the autonomy of these private ADR systems. Our empirical research captures the most detailed images of these evolving ADR systems. These pictures lead us to the following conclusions.
A. The Labor-Management Model: Our overriding conclusion is that most critics of the judicial review of labor arbitration awards fail to give federal courts due credit for their continuing adherence to the Trilogy. The award-confirmation rates by district and appellate courts respectively from 1960-1991 were 71.8 percent and 70.5 percent. The overall confirmation rates observed here (1991-2001) are almost the same. These figures tell the most important story about judicial review of labor arbitration awards: federal district courts have consistently enforced awards since the Trilogy.
This study empirically also validates the claim that some courts fail to adhere to the deferential standards of the Trilogy, but pinpoints the problem in the South. Our findings imply that judicial review of arbitration awards adds to union-avoidance benefits for employers in the South.
B. The Individual Employment Model: Although the individual employment arbitration system substantially differs from the labor-management model, our main conclusion has a similar theme. Although courts substantially defer to arbitrator rulings, more judges are stringently reviewing awards in these arbitrations. In time, we believe they will behave more like courts in the labor-management domain. More specifically, our research finds that the confirmation rates for the individual employment cases are higher than labor-management cases (compare 70.3 percent and 66.4 percent respectively for district and circuit courts reviewing labor arbitration awards, and 85.3 percent and 81.3 percent for the district and circuit courts that reviewed individual employment awards). But, our research shows that the confirmation rate has begun to drop for the individual cases.
Also, judicial review of individual employment awards is not limited to standards expressly enumerated in the FAA. Award-review is more complicated, and at the same time less anchored in a coherent body of law, than labor cases. Often, courts consider a large complex of statutory standards under the FAA and also non-statutory standards. There is no detectable rhyme or reason in a court's choice of one set of standards over others. In our view, the Supreme Court will eventually recognize the need to establish judicial review standards for the arbitration of individual employment rights in the same way it fashioned a federal common law for enforcing collective bargaining agreements in the Trilogy.
Keywords: Dispute resolution, ADR, judges aribtration, judicial review, common law, collective bargaining, unions
JEL Classification: K31, K41, J52, J53, J58, J71, J78
Suggested Citation: Suggested Citation