Is arbitration a form of second-class justice as compared to litigation? The issue is an important one to labor/employment attorneys, since nearly all labor disputes and an increasing number of employment disputes are resolved through arbitration. Stacie Strong (University of Sydney Law School; previously at University of Missouri Law School) emphatically answers “no”. She surveyed judges and arbitrators regarding three building blocks of legal reasoning: legal authority, factual authority, and the reasoning process. The take-away: judges and arbitrators approach dispute resolution identically.
The book is Legal Reasoning Across Commercial Disputes (Oxford University Press, 2020). As the title indicates, the study focuses on commercial disputes, both domestic and international. Nonetheless, most of the findings likely apply to labor and employment arbitration as well—and they help explain what arbitrators do and why we do it.
One topic that may not translate directly from commercial to labor disputes is the use of legal versus contractual authority. Arbitrators in both labor and commercial arbitration are bound by the contracts that confer decisional authority. However, while in labor arbitration there usually is only one CBA at issue (and, perhaps, earlier versions of the same CBA, side letter agreements, interpretive arbitration awards, and consistent past practices), commercial disputes are moving away from a single-contract, bilateral model toward disputes that are multi-party and multi contract—thus often making the contract(s) less useful in crafting a decision. Also, while in commercial arbitration there is usually a set of laws that govern the contract to be interpreted, in labor arbitration external law may or may not be incorporated into the CBA, and precedent is advisory rather than binding. Both factors, I think, tend to increase a labor arbitrator’s reliance on the CBA (and decrease reliance on other sources of law) as the basis for decisional law, as compared to either arbitrators or judges in commercial disputes, who are less likely to rely on the contract and more likely to rely on the commercial law of the relevant jurisdiction. When comparing labor disputes to commercial disputes, it may therefore be appropriate (and in many instances mandatory) to treat CBAs as “legal” authority—i.e., the “law of the shop.”
With this in mind, a common myth is that judges focus on the law whereas arbitrators focus on the facts. Strong’s study debunks this. She finds arbitrators and judges both believe factual issues are central to the resolution of legal disputes, and both approach resolution of factual disputes similarly.
Attention to Detail
Arbitrators and judges showed a remarkable degree of consistency in ranking the factors determining how detailed a given decision should be. Arbitrators and judges agreed the most important factor was the complexity of disputes of fact, followed closely by the complexity of disputes of law. (As discussed above, I would include disputes over CBA interpretations in labor cases as analogous to disputes of law in commercial cases).
The third-ranked factor by both judges and arbitrators—and one that particularly resonated with me—was whether the act of writing would help the decisionmaker “think through the analytical process and increase[] the likelihood of reaching the right outcome.” One survey participant, who had served as both judge and arbitrator, wrote: “It’s like writing an essay—sometimes (rarely) it just doesn’t write. As you write, you find it hard to support your argument. If it’s too hard, you can’t go there, so you go the other way.”
Judges were more likely than arbitrators to write a more-detailed decision to increase the prestige of the decision itself. Both arbitrators and judges valued highly that the losing party feels heard, but arbitrators valued much more highly than judges that the winning party feels heard. At the bottom of the list for both
arbitrators and judges was avoiding a legal challenge to the decision.
Legal Reasoning Process
Judges and arbitrators showed remarkable similarity in their approach to legal reasoning. Nearly all either start with the facts and then apply the law relevant to those facts, or use a blended approach that simultaneously considers both facts and law. Almost none start with the law and then look for relevant facts, or start with the outcome and then look for the facts and law to support that outcome.
Another survey section sought to test the common assumption that judges and arbitrators change their approach to legal reasoning over time. The vast majority of respondents—both arbitrators and judges—said their approach had not changed. Of the handful who did change, the vast majority increased their reliance on facts.
Several questions asked respondents who had served as both judges and arbitrators to discuss whether and to what extent their reasoning process differed depending on their status. Nearly 80% said their reasoning process did not change, suggesting to Strong “that the allegation that arbitral justice is somehow different or less than judicial justice is incorrect.”
The discussion above barely scratches the surface of the ways Strong compared the approaches taken by arbitrators and judges. Across the board, both domestically and internationally, she found the approaches were nearly identical. My take-away: by opting for arbitration rather than litigation, parties can save considerable time and expense without compromising the substance of their claims.