Binding Arbitration - Very, Very Bad Stuff!
by Bernier Mayo

We came within a whisker of a public policy disaster last week. The House followed the Senate's lead in voting to impose binding arbitration upon the contract negotiations of all public bodies in Vermont. Binding arbitration is the process wherein, when labor and management are unable to come to an agreement, arbitrators (usually three) consider the issues at impasse and impose a binding contract on both parties. We were saved from it only when the conference committee could not agree on its final wording and removed it from this bill. Had it passed, it would have effectively gutted the collective bargaining process and handed the keys of the financial kingdom to the unions representing public employees, including teachers.

Here's how collective bargaining works. Management and union representatives come together on opposite sides of the table and, over time, hammer out an agreement acceptable to both sides on wages, hours, and working conditions. Sometimes it is over quickly; sometimes it takes a lot of time and some facilitating interventions. The literal bottom line, though, is that good faith bargaining, the process of quid pro quo, must produce the agreements that, taken together, become a contract.

Here's how collective bargaining with binding arbitration works. Management and union representatives come together on opposite sides of the table and predictably fail to reach mutual agreement on the really important issues of hours, wages, and working conditions. They predictably fail because union negotiators frequently make exhorbitant demands designed to wreck negotiations and force the parties into binding arbitration where the union is virtually guaranteed to win and management to fail.

Here's how that works. A typical arbitration panel is composed of three professionally trained arbitrators, one chosen by management, one chosen by the union, and one chosen by the first two. They will hear the arguments, consider the issues, and fashion a remedy, a contract. That contract almost never favors management. It almost always favors the union and for a very simple reason. Arbitrators need to work. When they work they always face the same unions on one side of the table, but different governing bodies on the other. Unions keep book on the performance of arbitrators, and they will shun or boycott arbitrators who don't favor union positions. Put bluntly, arbitrators who don't please unions don't work. Arbitrators don't have to fear governing bodies because they very seldom have to face the same one twice, and governing bodies don't keep book on them. Hence, governing bodies enter binding arbitration at a terrific disadvantage and virtually never win.

Here is a real-life example of the bias of arbitrators toward unions. Twenty years ago when I was a public school superintendent in New York, I took an action to dismiss a tenured teacher, an action called in the law a 3020A. I had to take the action because he had gradually become totally deaf, and he was a music teacher who not only could not teach music by reason of his physical disability, but whose classroom was bedlam because his junior high students knew that he had no idea of the hijinks that they were doing or saying when his back was turned. Because he wouldn't resign or take early retirement, I took the action. 3020A's require binding arbitration. We lost. The arbitrators agreed, 2 to 1, with the union that we could not prove that a deaf man could not teach music. Because, for himself and the kids, we had to get that man out of the classroom, we ended up agreeing to create the position of district mailman at full teacher's pay for him for the remaining three or four years before he qualified for full retirement. One more time - a stone deaf music teacher on the payroll as a mailman because arbitrators have to please their masters.

Binding arbitration is bad public policy. It has only one beneficiary - the union. It bankrupts the negotiating process and ultimately the public budget. I recommend that you run, not walk, to tell your legislator to vote against it the next time and every time it comes up.

Bernier L. Mayo
May 14, 1999