358 Human Resources Management for Public and Nonprofi t Organizations
arbitrator renders a decision based on the merits of the case. The decision
tends to be fi nal and legally binding on both parties.
The scope of an arbitrator ’ s authority is usually negotiated and stated
in the collective bargaining agreement. A commonly negotiated clause
authorizes the arbitrator to resolve all disputes concerning the application
or interpretation of the contract, but it prohibits the arbitrator from adding
to or subtracting from the express terms of the agreement in formulating an
award.
Grievance arbitration is undertaken as the last resort in settling disputes
because it is expensive. Direct costs involve the expenses associated with
preparing the case and the arbitrator ’ s fee. Indirect costs involve all the
time spent away from work by the grievant, supervisor, union representative,
witnesses, and other associated employees. The contract usually specifi es
which party will be responsible for paying the arbitrator ’ s fee. It is com-
mon for labor and management to equally share the cost of an arbitra-
tion proceeding. Because sharing the costs makes it less expensive for the
union to extend the grievance and appeal process until arbitration, some
agreements require that the losing party pay all of the fees associated with
arbitration. Holding the losing party responsible for all of the costs should
provide the party whose grievance is weak with an incentive to settle at a
lower level in the proceedings, and it should encourage the union to screen
cases carefully.
Grievance arbitration is expressly authorized by statute for the nonprofi t
and private sectors. The LMRA requires that all contracts contain a grievance
resolution procedure. This requirement is also found in section 7121 of
the Federal Service Labor - Management Relations Statute and in most
state statutes.Public Sector Distinctions
Public sector collective bargaining has been influenced by underlying
beliefs and organizational structures not found in the private sector. The
principle of government sovereignty and the doctrine of illegal separation
of powers are two examples of such beliefs. The sovereignty doctrine emanated
from the tradition that the “ king could do no wrong ” and could be “ sued ”
only if the king gave his consent. In the United States, the citizens are
sovereign. Only the electorate has the right to set the conditions under
which the public employees work. Government cannot cede any of its
powers to a nonelected group, and a public sector union has been defi ned