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Industrial Arbitration in the United States


INDUSTRIAL ARBITRATION IN THE UNITED STATES Industrial arbitration, as distinct from mediation, conciliation, and other pacificatory processes, and from commercial arbitration, is here used to mean the adjudication of disputes or differences between management and labour, voluntarily submitted by the parties to judges of their own choice for final decision.

The agreement to arbitrate may relate to existing matters or to questions which may arise in the future, and may embrace all of the questions involved or only those of a specified kind.

While evidences of this type of arbitration appear early in American labour history, its most significant developments have come since i 900, and in the New Deal era it has assumed a stead ily increasing importance.

In 1865, a dispute between iron puddlers and employers in Pittsburgh was settled by arbitration, and five years later the workers in the shoe industry at Lynn, Mass., arbitrated their grievances. In 1874, the National Trade Unions called an Indus trial Congress in Rochester, which passed a resolution advocating voluntary arbitration between employers and employees, but stated "it would be imprudent at present to advocate the passage of a law in Congress making it compulsory for employers and em ployees to settle their grievances by arbitration alone." This appears to be the first recorded reference to compulsory arbitration, and in this respect the attitude of labour in the United States of America toward compulsory arbitration has not materi ally changed. Records of the labour movement, however, show remarkably few examples, on its part, of refusal to accept volun tary arbitration.

There followed scattered attempts at arbitration, some success ful, some resulting in failure; it was only when labour and man agement met on more equal terms after the turn of the 2oth cen tury that arbitration played a really important role in industrial affairs.

A resolution of the International Typographical Union, passed at its convention in 1871, paved the way to the conclusion of an arbitration agreement, in 1901, between the union and the Ameri can Newspaper Publishers' Association, the essential provisions of which are still in effect.

At about the same time the International Printing Pressmen's Union entered into a contract with the Publishers' Association, which has kept peace in that branch of the industry for nearly 40 years and which was extended, in 1937, for an additional period of five years.

Arbitration agreements between the stereotypers and photo engravers and the publishers have also contributed to a remark able record of arbitration in this field.

The men's clothing industry, once one of the most chaotic and strike-torn in the United States, has been free of strikes since 1921, when the union (Amalgamated Clothing Workers of Amer ica) and the association of employers concluded an arbitration agreement which has made the industry a model in employer employee relations, and was extended for a further period of two years on July 8, Two other important dates stand out in the history of industrial arbitration: 1903, when, through the intervention of President Theodore Roosevelt, an arbitration board was set up in the Penn sylvania anthracite coal region, which is still functioning in that industry ; and 191o, when the garment trades set up impartial chairmanship in the well-known Hart, Schaffner & Marx Chicago agreement.

An incomplete tabulation of arbitration decisions in the United States, made by the Bureau of Labor Statistics of the U.S. De partment of Labor, lists 54 decisions as having been made from 1865 to 1914; 98 decisions from 1915 to 192o, and 271 from 1921 to 1929. Since only a fraction of the arbitration awards actually handed down in those periods were reported to the Government, the figures are chiefly interesting because of their indication of the increase in the number of arbitrations.

With the enactment of the National Labor Relations Act and the several State labour relations acts, collective bargaining was not only required, but rapidly gained voluntary acceptance by realistic employers as a necessary technique in the administration of labour relations.

Most of the agreements between management and labour which resulted contained provisions for the settlement of grievances and arbitration of disputes arising out of the contracts or relating to their interpretation.

To what extent this was the case is shown by an analysis, made in 1939 by the National Industrial Conference Board, of I14 labour agreements to which employers in varied industries and C.I.O., A.F. of L., and independent unions were parties. The analysis showed that 86 of the contracts examined contained pro visions for arbitration. A similar study of the shoe industry dis closed that the United Shoe Workers of America, organized March 16, 1937, had in two years signed 20 agreements with shoe manu facturers and some form of arbitration was provided for in every one of these agreements.

Systems of industrial arbitration machinery created by agree ment or by law in the United States may be divided into four general types: (I) that set up by Federal, State, or local Governments, such as the machinery established by the Railway Labor Act of 1926, providing for a National Mediation Board, adjustment boards, and boards of arbitration ; the New York State Board of Media tion (which also conducts arbitrations), and similar boards in Michigan, Wisconsin, and a number of other States; the Toledo Industrial Peace Board and the Newark Labor Relations Board; (2) that set up in specific industries, between employers or asso ciations of employers and unions, such as in the New York dress trade, the cloak and suit trade, the men's clothing industry, the newspaper publishing business, the entertainment field (producers, stage and screen actors, authors, radio artists), the coal industry and others; (3) that created by individual employers and unions in labour contracts entered into by them; and (4) that adminis tered by the American Arbitration Association in its Voluntary Industrial Arbitration Tribunal, which provides impartial and in dependent arbitration facilities for the adjudication of labour disputes.

Arbitrations conducted in the latter are legal proceedings when ever the arbitration law under which they are held makes the ar bitration agreement legally valid and the award legally enforce able. By a legal proceeding is meant that the submission agree ment or clause is made out in the form provided by law, the pro ceeding is held in accordance with that law, and the award is ren dered in conformity to it.

Furthermore, the parties agree that the award shall be final and binding and that it may be entered as a judgment in the court having jurisdiction.

Such a tribunal, set up by the will of the parties and operated only at their demand, is of necessity non-partisan and non-politi cal in character. The tribunal is also non-profit-making, the fees being fixed on the basis of estimated costs for each proceeding, plus an overhead for the maintenance of the machinery.

The arbitrators serve on an honorary basis, without compensa tion.

The tribunal does not function as a negotiating or mediating agency, for, under its rules, these conciliatory processes must have been exhausted or failed through the efforts of the parties or other agencies, before a board of arbitrators will be convened. Nor is it a permanent board of arbitrators to hear and determine any and all cases. On the contrary, it is a mechanism by which a board of arbitrators is selected in each case by the parties and in accordance with their requirements in each particular controversy.

Most States make no special reference in their general arbitra tion statutes to labour disputes. Some, however, have recognized that a difference exists between commercial arbitration and the arbitration of labour disputes. This has been done in two ways: by excluding collective bargaining contracts from the usual pro visions relating to arbitration (as has been done in Arizona, California, New Hampshire, Ohio, Oregon, Pennsylvania, Rhode Island, and Wisconsin), and by enacting special laws for the arbi tration of labour disputes (as in Alabama, Connecticut, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Maine, Michigan, Missouri, Montana, Nevada, New Hampshire, Pennsylvania, South Carolina, Texas, Vermont, and Washington), some of these being mere authorizations to a commission to pro mote arbitration (as in Arizona, Colorado, Minnesota, Ohio, South Carolina, Utah, and Wisconsin) .

Agreements to submit to arbitration controversies which may arise in the future, whether they be commercial or labour, are enforceable only in a small number of States (Connecticut, Louis iana, Massachusetts, New Jersey, and New York). However, al most all States now permit the summary enforcement of submis sions of existing controversies, provided the prescribed formal re quirements have been complied with.

It is interesting to note that a Federal law and many State laws now provide that injunctive relief will not be afforded by the courts until the parties have made an effort amicably to compose their differences.


History of Labor in the United States Bibliography.-Commons, History of Labor in the United States (1918) ; Schmidt, Industrial Relations in Urban Transportation ; Kellor, Arbitration in the New Industrial Society ; Tracy, History of the Typographical Union (1913) ; Levine, The Women's Garment Workers (1924) ; Bogardus, Industrial Arbitration in the Book and Job Printing Industry in New York City ; Suffern, Conciliation and Arbitration in the Coal Industry of America (1915) ; Oliver. "The Arbitration of Labor Disputes" University of Pennsylvania Law Review, No. 83, 1934; Fraenkel, "The Legal En forceability of Agreements to Arbitrate Labor Disputes" The Arbitra tion Journal, Vold, p. 36o; see also The Arbitration Journal, Labor Relations Reporter, Prentice-Hall Labor Service; and, for sum mary of commercial arbitration laws in the various States, Sturges, Commercial Arbitrations and Awards (1930). (M. H. G.)

labour, labor, industry, board, employers, disputes and law