Arbitration: Steps & Procedures

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Decision-Making Criteria for Arbitrators

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:00 Arbitration Defined
  • 1:39 Initiation &…
  • 3:16 Preliminary Hearing &…
  • 4:30 Hearing
  • 5:25 Post-Hearing…
  • 6:45 Lesson Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Timeline
Autoplay
Autoplay
Speed Speed
Lesson Transcript
Instructor: Shawn Grimsley

Shawn has a masters of public administration, JD, and a BA in political science.

The courthouse is not the only place where two parties in a dispute can go to resolve a conflict. In this lesson, you'll learn about arbitration. We'll provide a refresher of what it is and the steps and procedures it involves.

Arbitration Defined

We Make Things, Inc. is embroiled in a labor dispute with its unionized workforce about healthcare benefits under a collective bargaining agreement. The general terms of this agreement govern the employment relationship, including, but not limited to, wages, benefits, hours, promotion, and grievance procedures. The union claims that management is in breach of its healthcare commitments under the agreement, and management insists that it's honoring its contractual obligations.

Since labor and management can't resolve the dispute on their own, they turn to the collective bargaining agreement to determine how to proceed, and it requires that the dispute be handled in arbitration. Arbitration is a form of alternative dispute resolution whereby a neutral third-party, called an arbitrator, resolves the conflict between them by rendering a decision. Binding arbitration means that both parties are legally bound by the arbitrator's decision, which can be enforced by a court if necessary.

The manner in which arbitration proceeds can vary depending upon how the collective bargaining agreement is written. For this lesson, we'll use the steps and procedures utilized by the American Arbitration Association, since many view it as the gold standard for arbitration. Keep in mind that these steps are not set in stone, and the process can and does vary depending upon the parties, applicable collective bargaining agreement, and circumstances.

Initiation & Arbitrator Selection

The first step of the arbitration process is initiation. Generally, arbitration will be initiated by one of the parties to the conflict giving written notice to the other party that the party is invoking the right to arbitration pursuant to the collective bargaining agreement. In our example, the union might be fed up with management's position and decide to initiate arbitration by serving a written notice on management. The notice will tell management the type of dispute it is demanding be arbitrated, the contact information of the parties, and the remedy the union is seeking from arbitration, such as a reduction in employees' share of the cost of the health benefits. A copy of the notice and the collective bargaining agreement will also be sent to the arbitrator or the organization handling the arbitration, such as the American Arbitration Association.

After notice is served, the receiving party can submit a written statement or position on the claim, often called an answer. If no statement is submitted, such silence will be deemed a denial of the claim. Failing to submit an answer generally will not delay or stop the arbitration. Stonewalling is not permitted.

The next step is selection of the arbitrator, if one has not already been selected. The manner in which an arbitrator is selected is usually outlined by the collective bargaining agreement. If the parties cannot agree on an arbitrator, procedures exist to have an arbitrator selected for them. You should note that while one arbitrator is quite common, arbitration hearings might consist of a panel of arbitrators.

Preliminary Hearing & Information

A preliminary hearing will be held where the parties, their attorneys, and the arbitrator will meet to set important deadlines. Examples include deadlines for exchanging information; providing witness lists and exhibits; and briefing, a written presentation of facts, law, and arguments. Finally, the time for the evidentiary hearing will be set.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support