Evolving Mediation Practices in the United States

National Academy of Arbitrators Mediation Seminar

Panel on Mediation

December 2, 2021

Joshua M. Javits, Arbitrator & Mediator

The National Academy of Arbitrators hosted an on-line mediation seminar on December 2, 2021. The Panel on Mediation discussed mediation in the United States and Canada and explored some of the differences. Panel members looked at the prevalence of labor mediation in both rights and interest arbitration cases. In addition, the panel explored the use of hybrid forms of dispute resolution, such as med-arb and also arb-med and even arb-med arb. Canadian NAA members Michelle Flaherty and Christopher Albertyn discussed the Canadian experience and U.S. NAA member and former NAA President John Kagel addressed the mediation of interest arbitration cases. I, also an NAA member, provided an overview of mediation of labor-management disputes in the United States and later discussed grievance mediation, as follows.   

Overview of Mediation of Labor-Management Disputes in the United States

A few months ago, I learned in an off-hand remark by Chris Albertyn that between 80% and 90% of Canadian grievances are mediated to conclusion. I was amazed. That figure for mediations is quite a contrast to my experience in the United States. His remark led to this webinar.

Canadian Model

As described in Michelle Flaherty’s terrific paper (“Mediation-Arbitration in Ontario: Labor Relations, Human Rights and Beyond?” https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3080367), Canadian labor and management moved toward a med-arb process in the 1990s. This shift was born out of frustration with the costly and time-consuming traditional arbitration process. In addition, the stability and effective negotiating relationship between labor and management in Canada contributed to the voluntary adoption of med-arb. Many of Canada’s provinces subsequently passed into law mandatory use of the med-arb process. Under med-arb, a single neutral chosen by the parties engages in mediation of an interest or a rights dispute and, if unsuccessful, arbitration of the dispute.

U.S. Approach

The United States is a laggard in med-arb, which is not mandated by law, except in certain public-sector jurisdictions. Some evidence suggests that settlements have increased over time in the United States and that mediation has played at least a limited role.

Comparatively few collective bargaining agreements in the United States have provisions for grievance mediation. A few CBAs that do, however, have achieved real success with screening and settling cases through mediation. Virtually all CBAs have a step process for discussing and exchanging information on grievances at progressively higher levels of management and the union. Settlement discussions certainly take place at those levels, but this is not the same as mandatory mediation by a third party.

Regarding interest arbitration, again, mediation is the exception not the rule in the United States. Still, significant pockets of mediation of interest disputes exist. Many state and local laws mandate mediation, arbitration or med-arb of interest disputes for police departments, fire departments, schools, etc. Where arbitration of interest disputes is called for, informal mediation is often practiced.

Interest disputes lend themselves to mediation or facilitated negotiation, because the parties are trying to write the terms they can live with and they know best what it is they are looking for. Neutrals will delve into the bargaining positions of the parties and try to at least reduce the number of issues in dispute and the distance separating the parties on each issue with an eye toward closing the gap. 

I checked in with the relevant U.S. federal labor agencies—the Federal Mediation and Conciliation Service and National Mediation Board -- as well as the American Arbitration Association on the use of mediation in grievances.

The Federal Mediation and Conciliation Service provides mediators for interest disputes to the private sector and to federal departments and agencies. FMCS’s mediators mediate rights disputes as well as collective bargaining disputes.However, FMCS does not provide private parties with panels of outside mediators, only panels of arbitrators.

The number of mediations that FMCS mediators have conducted has increased by about 12%, from 1,750 cases in 2007 to more than 2,000 cases in 2020. FMCS mediators mediated an additional 2,750 collective bargaining disputes, for a total of 4,750 cases. 

Of course, government employee mediators are practically cost-free to the parties. But non-government neutrals are also frequently used in public-sector cases. 

The number of arbitration panels requested from FMCS has decreased by 40%, from about 16,000 in FY 2009 to 10,500 in FY 2021. According to FMCS’s director of arbitration, this decline may be attributed to more settlements being reached earlier in the process so the parties do not even request an arbitration panel. It would be hard to attribute the decrease in arbitrations to an increase in mediations based on these figures.

I also spoke with American Arbitration Association officials. Most of the cases AAA handles are filed as arbitrations and, during the course of a hearing, the parties may agree to work with the arbitrator on a possible settlement and enter into an agreed-upon mediation process. 

Many AAA cases filed as arbitrations actually settle before or at the hearing or soon after the hearing; in fact, in the last two years, more than 70% of these cases settled. But that means 30% of cases end up with decisions, not an unusually low percentage in light of the number of cases filed with AAA.

AAA has very few cases that are actually filed as mediations. Based on feedback from its arbitrators and parties, however, “mediation” does take place and takes place always by agreement of the parties and arbitrator. AAA calls it a very informal mediation process. 

The National Mediation Board administers the thousands of railroad arbitration cases filed annually, and it pays private arbitrators for hearing these cases in accord with the Railway Labor Act. The NMB has established programs to pay private neutrals for mediating grievances as well. 

The NMB’s 15 staff mediators train railroad and airline union and management personnel in grievance mediation. These mediators mediate grievances in addition to collective bargaining disputes. They use an interest-based bargaining approach in the training.[1] The NMB, as well as FMCS, also provide training in traditional negotiating approaches.[2]

NMB mediators successfully promote agreements between the parties using a structured mediation process. They have a 90% success rate, according to the NMB’s director of mediation. About 200 airline arbitrations are held each year.

Especially relevant to this overview of mediation of labor-management disputes in the United States is a discussion of the Railway Labor Act. This law governs the collective bargaining process for airlines and railroads, and the NMB administers its central provisions. Under the RLA, the parties must engage in mediation of collective bargaining disputes if they want to be released to use or to credibly threaten to use self-help (e.g., strikes by unions and lockouts or unilateral contract changes by the carriers). So, in this sense, mediation is mandatory, unlike the legal regime for the rest of the private sector.

The RLA’s bargaining process is slow, but it has been remarkably successful in helping the parties reach agreements in the two industries. This has resulted in a unionization rate of about 80% in the railroad and airline industries, in contrast to a 6% unionization rate for the rest of the U.S. private sector.

Interest arbitration has been voluntarily agreed to by several airlines. Alaska and ALPA have used med-arb since 1976, and American Eagle and ALPA entered into a 21-year interest arbitration agreement with mediation and arbitration of a limited number of issues every few years. Compass/ALPA engaged in three rounds of med-arb. In all three rounds, the parties set a limit on the number of issues they could arbitrate, which forced them to resolve or take off the table many issues in the mediation phase. One disagreement on process that regularly arose was identifying the comparator airlines to be used for pattern bargaining, which is typical in the industry, and determining the definition of an “issue” (e.g., is health care one issue or dozens of issues—premiums, copays, out-of-pocket maximums, etc.?). Another indication that mediation has come of age is the federal government’s Shared Neutrals Program, administered by FMCS. Under the program, each department and agency develops a cadre of trained mediators who can be shared with other agencies so the neutrals are available to handle disputes at agencies other than their own.

Summary

The United States exhibits a much more voluntary and haphazard use of mediation than Canada, whose approach is far more structured. Private-sector grievance mediation tends to be fairly frequent. However, it is an ad hoc outgrowth of the parties’ desire to settle a case in arbitration. Still, arbitration, mediation or med-arb is mandated in many public-sector jurisdictions. A great deal of mediation of both grievances and interest cases in both the public and private sectors is being conducted in the United States by government-employed mediators at the federal, state and local levels.

Grievance Mediation in the United States

The mediation of grievances in the United States may be increasing, but its use is by no means as fulsome as it is in Canada. A large part of the reason is our nation’s system of collective bargaining agreement dispute resolution has long been built around arbitration. As the weaknesses of arbitration are recognized and the strengths of mediation become more attractive and available, however, change may be in the offing. 

Usual criticisms of the traditional arbitration process in grievance handling are these:

• The process is too formal and fails to address the real, underlying issues.
• The process is too costly, in terms of both time and money.
• The process is too slow; it often takes a year or more to get to arbitration and several months longer for a decision.
• The remedies are too narrow.
• There is little, if any, joint discussion, exploration of the issues, analysis or search for alternatives.

The Goldberg Study

Professor Steve Goldberg’s 2009 address to the National Academy of Arbitrators and his paper, contained in the Proceedings (https://naarb.org/naarb_proceedings/grievance-mediation-if-its-so-great-...), describes the huge cost advantage of mediation over arbitration. He notes that mediation is about four times quicker from request to resolution. He also highlights mediation’s capacity to teach settlement skills so the parties can resolve disputes on their own. 

Steve Goldberg suggests five reasons why mediation has not been widely adopted in the United States. First is lethargy. Arbitration has been in place since the 1940s, and the parties are accustomed to it and skilled at it. Second, mediation is risky because the parties must take responsibility for settlements and cannot just “blame the arbitrator.” Third, attorneys earn considerably more money in arbitration than in mediation. Fourth, unions sustain the allegiance of members by demonstrating their adversarial spirit toward management. Fifth, the arms-length relationship between union and management in the United States, in contrast to a more open, cooperative and problem-solving approach such as in Canada, has impeded adoption of mediation here.     

Recent Developments in Mediating Grievances

How much has changed in the 12 years since Steve Goldberg’s talk? At least formally, a big movement toward mediation is not evident. Relatively few CBAs contain mediation steps. A frequently cited problem with a mediation step is that it delays resolution if unsuccessful and is costly and cumbersome; the parties must agree to a mediator, agree to a meeting, and take the time to prepare and to mediate. If the mediation is unsuccessful, a separate arbitration proceeding must be scheduled, with its further attendant costs and delay. 

Nonetheless, much anecdotal discussion and some evidence exist about the parties’ greater proclivity to settle cases at the arbitration hearing and to use neutrals to help. The COVID pandemic may be partially responsible for an increase in settlements as a result of the parties wanting to avoid in-person hearings. The relative informality and increased pre-hearing communications between the parties and neutral in planning virtual hearings may also be contributing factors.

Broaching Settlement or Mediation

Arbitrators typically ask the parties at some point before, during or after the hearing if they have discussed settlement with each other. Subsequent discussion may or may not involve the arbitrator’s participation as a mediator.

Where the neutral knows the parties and the industry, and they know each other, it is natural to informally raise voluntary resolution. Where the advocates do not know each other, or have not discussed the case, the subject is also easily broached by simply asking whether the parties want an opportunity to discuss the case together.

Other arbitrators may ask the parties about settlement at the end of the hearing after the arbitrator and parties have had the benefit of hearing the whole case. At that point everyone is usually rushing home, however, and the contentiousness of the hearing may limit the likelihood of settlement.

Of course, some arbitrators do not ask about settlement at all under the assumption that if the parties wanted to settle or mediate, they would not have selected the arbitral forum.

Concerns with Med-Arb

Observers raise several real concerns about the mediation of grievance cases where the neutral is originally invited in to arbitrate. The parties may feel the arbitrator will be biased as a result of hearing confidences shared in mediation. There is the common concern that the arbitrator may not be able to ignore off-the-record information learned in mediating if the arbitrator returns to the arbitrator role. Another concern is whether the arbitrator can put aside known concessions and other confidentialities when writing a decision.

In addition, the parties may be reluctant to share candid views with the neutral because, if negotiations fail, the arbitrator is back to arbitrating. I know as an advocate I would keep my principals from “spilling the beans” out of concern that it would influence the neutral if they ended up resuming the arbitration.   

Also, because the neutral meets with each party separately in caucus, the opposing party may have its suspicions aroused as to what the mediator is being told about the case. This would include any misstatements or distortions about the facts, motives and context.

Many arbitrators put in writing terms of the mediation when the arbitrator takes on an active mediator role. This could include an explicit agreement that if the mediation fails to produce a settlement, the neutral will or will not continue as the arbitrator. The writing can also provide that if the neutral feels after mediating that he or she cannot comfortably continue as the arbitrator because of the confidences shared by the parties, the neutral may independently decide not to resume the role of the arbitrator. 

Hybrid Med-Arb

The combination of mediation and arbitration—med-arb—compensates for the weaknesses of each process. The weakness of mediation is the absence of compulsion to attend or demonstrate a good-faith intention to reach an agreement. The weaknesses of arbitration are its delays, formality and high costs, while its great virtue is its finality. 

Often a case may start as an arbitration matter. But, as the case progresses, the parties see the flexibility and efficiency of mediation, especially because it allows them to have a strong voice in the resolution of the dispute. This fluidity of the process allows for its adaptation to the substance and “politics” of the dispute. 

So, cases may start out as an arbitration, move to settlement discussions or facilitated negotiations, and then move back to arbitration. That final return to arbitration, if the parties have been successful in their negotiations, may merely involve writing up the parties’ agreement or issuing a consent award so the process has the virtue of arbitral finality.

Personal Experiences

As an advocate, I always appreciated the arbitrator raising the subject of settlement, especially if I had a weak case. But even if I thought I had a strong case, settlement discussions are a useful way to learn about under-appreciated weaknesses in your case, prior to the introduction of evidence. If advocates can meet their clients’ goals in arbitration without arbitrating, there is less risk and less cost to the client. I was never afraid of the arbitrator doing some mediating, so long as I kept control of my side’s participation.

When I presented cases as an advocate to Arbitrator Rich Bloch, he had an effective way of asking each side questions, generally after openings. His questions went to what each side would have to prove to win the case. The approach made the advocates think twice about going forward if they were unsure whether their evidence would measure up. But it did not involve the arbitrator being perceived as “pushing” mediation or even settlement discussions.

Select Mediation Agreements

A few of the mediation agreements with which I am familiar show a diversity of process and effectiveness.  

Hotel Association of Washington DC (HAWDC)/UNITE HERE L. 25: Mediation agreement. HAWDC represents about 100 hotels and convention centers in the Washington, D.C., metropolitan area. The CBA provides for grievance arbitration and a separate mediation process. NAA member Charlie Feigenbaum and I each hear cases one or two days a month as mediators. If the case does not settle, we do not hear the case as arbitrators. 

The union presents its case for about 15 minutes and then management responds. The parties then adjourn to caucuses where the mediator feeds back to each side separately his candid reaction on the strengths and weaknesses of each case. An important purpose of these feedback sessions is for the principals and grievants, not just the advocates, to hear the neutral mediator’s evaluation of the respective case. 

Generally, the parties take it from there, with about half the cases settling during the mediation; some settle later on and some are arbitrated at a future time. The parties use the neutral evaluation for their own negotiation purposes; it helps each party get an advance glimpse of an arbitrator’s likely resolution. The parties are able to take an honest look at the merits of their case and settle if they can. Sometimes the mediator is asked to actively mediate between the parties.

FAA/NATCA: Mediation with consequences. Under a 2001 memorandum of understanding between NATCA and FAA, the parties initially use the same process as the hotel association—presentation of a short summary of the facts and arguments by each side. However, the difference is the mediator feeds back his evaluation to the parties who are all together in the same room, rather than giving feedback separately to each party. If the parties do not settle, either party can take the case to arbitration. What is unique about the process is that in the event the arbitration decision comes out the same as the neutral evaluator’s opinion rendered earlier, the party that disagreed with the initial evaluation is liable for all fees and expenses of the hearing. That penalty is a built-in disincentive to continuing the case without a strong basis. 

UAL/ALPA. The parties mutually select the cases sent to mediation. Short 20-minute openings are given followed by active mediation. If no agreement is reached, the mediator issues an advisory opinion. The mediator cannot serve as arbitrator of the same case.

Long Island University/NYSUT. Arbitrator John Sands told me he developed a very effective program for LIU and the NYSUT faculty union. They had a backlog of more than 250 pending arbitrations, mainly because no one at the operations level had authority to negotiate and settle grievances.  As a result, everything went to arbitration, and the parties sat on a huge backlog of cases. 

When John suggested grievance mediation, the union responded that it would never agree to another step being added to the already lengthy grievance procedure. So John suggested instead regular “problem-solving days” where the parties could address any issues either pending at any stage of the procedure or even “not-yet-grievances.” The parties went on to schedule quarterly meetings. Eventually the parties had settled everything before the hearing date. They never had to have another session. John concluded, “I think the benefit of this process was to help the parties develop negotiating muscles that had atrophied. I’m particularly proud of this example of what I call ‘the withering of the state.’”

NY Transit/TWU Local 100: Expedited Arbitration. The TWU represents nearly 44,000 NYT employees. One day a month, each neutral on the expedited panel hears a docket of several cases involving sick leave, fare shortages, and time and attendance. Each party has 25 minutes to present its case and 5 minutes for rebuttal. The neutral issues a bench decision without a written explanation. Findings are non-precedential. The parties resolve many cases on the docket after discussion or during the hearing. The process eliminates many cases that would clog the arbitration process if not resolved. It also gives the grievant the feeling of getting his or her “day in court.”

Railroad Arbitration Boards. Between 3,000 and 6,000 railroad cases are filed annually with the three railroad tribunals established under the RLA. The RLA provides for the federal government to pay for arbitrators, currently $650 per case. Case administration is generally left to the NMB. The neutrals who conduct railroad arbitrations are almost universally called on to give informal advisory opinions and to mediate cases before the tripartite boards on which they sit. Again, this is an example of a process called arbitration that is really one that includes mediation and settlement conferences.

Airline Settlement Boards of Adjustment. SBAs are composed of two or four representatives of the parties and the neutral arbitrator. The representatives’ dual role as dual “partisan/neutrals” can be contradictory and thus complicated. I find SBAs to be a useful opportunity for informal discussion that can lead to resolution of the dispute or at least greater understanding of complex issues. The members can also be useful in informally communicating with the advocates. 

IRS/NTEU: Fact-finding. The parties may mutually agree that selected contract cases can be submitted to a fact-finding neutral. After study and de facto mediation, if unresolved, the fact-finder issues a written report with his or her recommendations. The party that does not accept the fact-finder’s recommendations pays the costs of the process, including the neutral’s costs.

Summary

Arbitration is embraced by the parties in the United States as the standard process for resolving grievance disputes. Moreover, it does not appear that parties have adopted a separate mediation step because of cost and delay considerations. Med-arb of grievances on the Canadian model has also not grounded itself here. This stems from concerns about arbitrator bias as a result of his or her exposure to confidences shared in mediation. Nonetheless, where the parties have adopted a mediation step or med-arb, they have stuck with it over time based on its demonstrated effectiveness. In addition, a growing inclination is emerging to engage in settlement discussions at the instigation of, and sometimes with the active assistance of, the arbitrator.