The particular statute may dictate one of three common
approaches to interest arbitration. In “issue-by-issue”
interest arbitration, each party makes a last best offer
(LBO) on the items in dispute, and the interest arbitrator is
empowered to choose between the parties’ LBOs on each
issue. Thus, the arbitrator may rule in favor of the union on
some issues and in favor of the employer on other issues.
In “final package” interest arbitration, the arbitrator must
choose the entire LBO of either one party or the other.
Here, there is a clear winner and a clear loser. While the
stakes are high in all of these scenarios, final package arbitration yields the greatest risk for the parties involved.
Under other statutes, the arbitrator is permitted to craft
an award and determine the terms of the agreement on
his or her own accord, and may select the position of the
union, employer, or a term crafted by the arbitrator.
Interest arbitration is most often authorized for public
safety units, police and fire. However, some jurisdictions
authorize and require interest arbitration for all public
sector bargaining units. For instance, the State of Connecticut has three separate public sector collective
bargaining statutes. The Municipal Employee Relations
Act (MERA) pertains to municipal employees, including
employees of cities and towns, authorities, and noncertified school board employees. The State Employee
Relations Act (SERA) pertains to state employees. The
School Board Teacher Negotiation Act (TNA) is specific to
teachers. In each of these cases, issue-by-issue interest arbitration is authorized in the event of impasse, but
under varying processes.
Mediation has a role to play in most public sector dispute
resolution frameworks. In situations where fact-finding
follows impasse, mediation ordinarily occurs prior to fact-finding and may be re-initiated following the issuance of
the fact-finding report, if the dispute remains unresolved.
Mediation is also used where interest arbitration is prescribed. It is instructive to contrast the process of interest
arbitration and role of the mediator and arbitrator under
MERA and SERA. Collective bargaining disputes in munici-palities arising under MERA require the parties to engage
in mediation prior to interest arbitration. The mediator
in these disputes is almost always a full-time mediator
employed by the State Board of Mediation and Arbitration
(SBMA), a unit within the State of Connecticut’s Department of Labor, assigned to assist the parties in resolving
the dispute. If the parties are unsuccessful in mediation,
interest arbitration is conducted by a separate, three-per-son panel chaired by a neutral arbitrator selected by the
parties, and with the parties each appointing one party
arbitrator to the panel.
In contrast, for collective bargaining disputes arising
between the unions representing state employee bargaining units and the State of Connecticut, the parties agree to
one neutral ADR professional to serve as both the mediator and the arbitrator, a process commonly referred to as
“med/arb.” If the parties are unsuccessful in resolving the
dispute in mediation, this ADR professional “switches hats”
and becomes the arbitrator, the one individual authorized
to conduct a hearing, taking testimony and evidence, and
make an award.
Where public sector statutes authorize a process where
the mediator and arbitrator are distinct, like MERA, the
mediator and the parties may be less encumbered than
those involved in a med/arb process. In these circumstances, the mediator enters the dispute, providing neutral
assistance to the parties, with the understanding that if this
confidential process does not successfully resolve the dispute, the parties will proceed to interest arbitration, where
a different neutral, one who was not a part of the mediation process, will make a final decision. Here, the mediator
may choose to assist the parties in evaluating positions
and offers, sometimes utilizing the statutory factors which
will be considered in the event of interest arbitration, discussing recent settlements and wage and benefit trends,
and contrasting for the parties the benefits of a voluntary
settlement as opposed to the uncertainties involved in an
award imposed by an arbitrator. The mediator establishes
(or in many cases, has previously established) relationships with each party, and has a distinct perspective and
approach from a neutral involved in a med/arb process.
Additionally, the parties may be less guarded in sharing
information with a mediator who will not later be involved
in determining the outcome of the dispute.
In contrast, there are a number of public sector statutes,
like SERA, where the parties engage a neutral to serve as
both the mediator and arbitrator. Here, the parties may be
more sensitive, and are, in fact, often hyper-aware, of any
evaluative statements made by the mediator/arbitrator.
In these cases, the parties will often view the mediation
In situations where fact-finding follows
impasse, mediation ordinarily occurs prior
to fact-finding and may be re-initiated
following the issuance of the fact-finding
report, if the dispute remains unresolved.