Grievance Mediation
Found to be Useful Alternative to Arbitration
reprinted from:
The Bureau of National Affairs, Inc.
LABOR RELATIONS
Volume 1, Number 19 THE BUREAU OF NATIONAL AFFAIRS, INC. May 13, 1987
Dispute Resolution
The union and the company have gone through the steps of the grievance procedure and have not resolved their differences. At this point the next step normally is arbitration.
But a number of companies now are resorting to an alternative to the costly and time-consuming arbitration process through a procedure known as grievance mediation. Working with a mediator, the parties attempt to settle the grievance using techniques commonly used in the mediation process such as separate meetings between the mediator and the parties. The mediator attempts to discern any underlying reasons for the dispute and possible points of compromise. The objective is to find a mutually satisfactory solution to the dispute.
Grievance mediation as an alternative to arbitration grew out of an experiment undertaken in 1980 in the bituminous coal industry funded by the Department of Labor. In that project, 89 percent of the 153 grievances mediated were resolved without resorting to arbitration. Out of the experiment came the Mediation Research & Education Project, Inc. (MREP), a not-for-profit corporation based in Evanston, Ill., which operates a mediation scheduling service and provides training in mediation techniques and procedures for company and union personnel.
Growth of Procedure
Today, grievance mediation has spread from the coal fields to use by Southern Bell Telephone Company and Communications Workers of America; Continental Telephone Company and the International Brotherhood of Electrical Workers; two retail drug companies and the United Food and Commercial Workers; Conoco, Inc., and the Oil, Chemical, and Atomic Workers Union; and, among others, several Washington State school boards and the Washington Education Association, according to Stephen Goldberg, a Northwestern University law professor and MREP's chief architect.
The grievance mediation process is finding acceptance, Goldberg said, "because 80% of grievances are settled short of arbitration." Additionally, grievance mediation is "vastly less expensive than arbitration," with an average cost of $300, less than 25% of the average arbitrator's fee, he noted.
The lower cost is attributable to the lack of a written transcript of the proceedings, no briefs, no written opinion, and no attorneys, he said.
"The mediation process is entirely informal," Goldberg explained. "The facts are brought out in narrative fashion rather than through examination and cross-examination. The rules of evidence do not apply, and no record of the proceeding is made. All persons involved in the events giving rise to the grievance are encouraged to participate fully in the proceedings, both by stating their views and by asking questions of the other participants in the hearing."
The mediator has no authority to compel the resolution of the grievance, Goldberg said. It is up to the parties to fashion a mutually acceptable solution. If a settlement is not reached, the mediator can provide an oral advisory opinion. The parties are then free to arbitrate, but the mediator cannot serve as the arbitrator. A position taken or any settlement offer made by either party during the mediation cannot be used against the party during a subsequent arbitration.
Retail Drug Experience
Thrifty Corporation, which operates some 600 retail drug stores in the western United States, has been using mediation to resolve grievances brought by the United Food and Commercial Workers sine late 1986. The process first was employed in grievances with Los Angeles-based UFCW Local 770 and is now being used with two other locals, according to Bill Everett, Thrifty vice president for labor relations. Based on the positive response from the locals thus far, Everett said he expects the process eventually will be used as an alternative to arbitration with nine UFCW locals in Southern California.
Everett said that one-day sessions for mediating grievances are pre-scheduled every other month. More than one grievance normally is handled on a hearing day. In the four sessions held to date, the parties have been able to settle all the grievances without proceeding to arbitration, Everett said. As a consequence, the company has not had any arbitrations with Local 770 since the process began, although typically it has averaged seven to 10 per year.
The new way of handling grievances "has improved an already satisfactory relationship" with the local, Everett said.
Everett pointed out, however, that not all grievances lend themselves to mediation. In the case of the discharge of a dishonest employee, for example, the company might feel it simply cannot agree to a lesser discipline. On the union's side there might be internal political reasons why local leaders cannot move from the position they have taken in a case, he suggested.
Likewise, many disputes over contract language interpretation cannot be mediated, he said. "Each side has a different perspective and is not willing to compromise." One side or the other might feel it had to have a final binding decision in writing that would be precedent setting.
Regardless of such exceptions, Everett speculated that mediation could be the best way to proceed with 95% of Thrifty's grievances.
Less Adversarial Atmosphere
Ron Bruckner, executive assistant to the president of Local 770, said the mediation procedure, which the local is using with several other companies in addition to Thrifty, is proving useful in resolving disputes because it is a lot less adversarial. In the hearing, each side gives a narrative explanation of its position. "You don't feel like you have to hold back out of fear of cross examination. It's not like in an arbitration where the other side is trying to question your credibility," he said.
Bruckner noted that "there is a real effort on the part of the mediator to move the parties toward a settlement; whereas in arbitration, the arbitrator is just there to gather all the facts and issue a ruling." Bruckner cited a recent example of the mediator's skill in this regard. The company had sought to terminate an employee with several years of service and initially would not consider any solution short of discharge. By skillfully drawing out the facts of the case, the mediator was able to show that termination was "not quite the right answer in this case," Bruckner explained. The employee ultimately was returned to work but with a disciplinary suspension.
Both Bruckner and Everett agreed that a major benefit of grievance mediation is the cost savings. The mediator is paid a flat fee of $750 for a one-day session during which more than one case may be heard. The cost is split between the union and the company. Everett noted also that because a case typically is resolved the same day, the company is not exposed to the kind of extended back-pay liability that would occur if an arbitrator finally ruled against the company several months after a hearing.
Certain Reservations
Osco Drug, Inc., of Oakbrook, Ill., which also has a contract with Local 770 covering its stores in the Los Angeles area, only recently began using grievance mediation. Tom Walter, company director of labor relations, finds the process a "little less confrontational" than arbitration.
Walter said he has reservations about mediation becoming "just another step" in the grievance procedure short of arbitration. In addition, in some cases where there is no dispute over the facts, the traditional grievance/arbitration procedure may be the most expeditious way to proceed, Walter said. Osco's agreement with Local 770 requires that both sides agree to go the grievance mediation route, or traditional arbitration is used. Likewise, either side has the right to proceed to arbitration if mediation fails.
Professor Goldberg from MREP said one reason the process works is precisely because the parties can reserve the right to go the next step to arbitration if mediation fails. In fact, Goldberg said, he does not recommend setting up a procedure in which mediation is the terminal step.
Goldberg pointed out that when the parties fail to reach a settlement in mediation, the mediator may offer an informal opinion on how the case is likely to be decided if it is taken to arbitration. Mediators have been able to correctly predict the outcome in 73% of such cases - a record that encourages unions and firms to resolve their differences and avoid the time and expense of arbitration, Goldberg said.
86 Percent Success Rate
Southern Bell Telephone has a longer track record with grievance mediation than either Thrifty or Osco. It began using the process on a trial basis in 1984 in grievances brought by the Communications Workers of America. In 1986 the procedure was incorporated into the contract between the company and the union.
Jerry Barnes, Southern Bell operations manager for labor relations, said that between 1985 and 1986, 86% of cases taken to mediation were settled without going to arbitration. The "vast majority" were resolved at the hearing. Some were settled prior to the hearing, and a small percentage not settled at the hearing were either withdrawn or settled later without proceeding to arbitration.
Discipline or discharge grievances lend themselves more readily to the process because there is typically more room for the parties to compromise, Barnes said. But if either side's position is "set in concrete, there is no sense in going to mediation," he said. "You're just going to be wasting everybody's time."
A major side benefit to using grievance mediation, Barnes said, is the educational experience for both the company and union officials who participate in the hearing. "We hope they are learning more about resolving problems internally," Barnes said. "The hope is that they'll come to the place where they can ask themselves, 'Hey, why can't we do this ourselves?'"
