How Much Power Does a Labor Arbitrator Have? What the Latest Court Decisions Mean for Arbitrators, Employers, Unions and National Labor Policy?

In 2009, in 14 Penn Plaza L.L.C. v. Pyett, the Supreme Court threw a curve at the collective bargaining world by holding (5-4) that unions could waive the rights of individual bargaining unit members to go to court to resolve employment-related statutory disputes and, instead, could require that such disputes be arbitrated. Pyett raised the specter of the Court taking the final step in merging the legal treatment of arbitration in the collective bargaining world with the treatment of non-labor arbitration, despite the clear points of tension between the basic public policy goal behind labor arbitration, which is to promote industrial peace, and the basic public policy goal behind all other kinds of contractual arbitration, which is to support and encourage private parties' freedom to contract for alternative ways in which to resolve contractual disputes. This paper clarifies what the legal trends really are and what they mean for the 'big picture' in arbitration as well as for labor arbitrators and the parties who appear before them. After reviewing the history of labor and non-labor arbitration and outlining and comparing the core principles of each type of arbitration, I trace how recent arbitration jurisprudence has crossed the historical divide between labor and commercial arbitration and explore the problems that this creates for labor arbitration as an institution. The trend towards the convergence of labor and non-labor arbitration is not unstoppable, however, and I highlight the ways in which the courts have continued to view arbitration under collective bargaining agreements and non-labor contracts as dichotomous systems with different rules. I also discuss how to deal with the reality of the new hybrid commercial/labor arbitrator that Pyett appears to contemplate and address the ways in which employers, employees and unions can help to retain the procedural and collective bargaining benefits of labor arbitration.