Empirical Analysis of How Arbitrators Handle Discharge & Discipline Arbitrations: The Results May Surprise You
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1 ABA Section of Labor and Employment Law Fifth Annual Labor and Employment Law Conference Seattle, Washington, November 3, 2011 Empirical Analysis of How Arbitrators Handle Discharge & Discipline Arbitrations: The Results May Surprise You Stephen F. Befort Gray, Plant, Mooty, Mooty, & Bennett Professor of Law, University of Minnesota Law School Laura J. Cooper J. Stewart & Mario Thomas McClendon Professor in Law and Alternative Dispute Resolution, University of Minnesota Law School For the past several years, we, along with our colleague, Mario F. Bognanno, Professor Emeritus, Carlson School of Management, University of Minnesota, have been engaged in the largest and most representative empirical study ever conducted of labor arbitration awards in discipline and discharge cases. Our data base of published and unpublished decisions in the public and private sectors includes more than two thousand awards issued over a period of about twenty-four years in a single state. Previous studies of disciplinary arbitration awards have often focused on narrow issues and usually have been based on small numbers of non-representative published decisions. We coded each of the awards on over one hundred variables and assembled detailed demographic information about each of the eighty-one arbitrators who decided cases in our collection. This comprehensive examination permits us to offer vital information and analysis never before available about the arbitration process and arbitration awards. Our project was funded by the Research and Education Foundation of the National Academy of Arbitrators (NAA). We presented our preliminary findings to the NAA at its Annual Meeting in That presentation, with a explanation of the project and our methodology, is published as Laura J. Cooper, Mario F. Bognanno & Stephen F. Befort, How and Why Labor Arbitrators Decide Discipline and Discharge Cases: An Empirical Examination, ARBITRATION 2007: WORKPLACE JUSTICE FOR A CHANGING ENVIRONMENT, PROCEEDINGS OF THE SIXTIETH ANNUAL MEETING, NATIONAL ACADEMY OF ARBITRATORS 420 (Bureau of National Affairs, 2008). A copy of that article is available on the NAA website at under Proceedings. Professor Cooper s presentation on the data relevant to government employees, Discipline and Discharge of Public Sector Employees: An Empirical Study of Arbitration Awards, was part of a September 2011 symposium at the University of Richmond School of Law. Her paper will be published in Volume 27, Issue 2, of the ABA JOURNAL OF LABOR & EMPLOYMENT LAW in We have also completed preparation of a book-length manuscript presenting and analyzing our findings. Here we highlight some of our most interesting and significant results. Since our presentation at the NAA meeting, we have investigated many more questions, done substantial
2 additional analysis, and gained not only new insights but further understanding of some of our preliminary findings. Many previous studies have not differentiated outcomes in discharge cases and discipline cases in which employers imposed the less serious sanctions of suspensions and reprimands. Our study finds, in many respects, statistically significant differences between outcomes in discharge cases and discipline cases. The large numbers of cases in our data base from both the public and private sectors allow us to highlight differences between arbitrations arising from governmental and non-governmental workplaces. Our detailed demographic information about all of the arbitrators deciding cases in our data base (including gender, age, education and National Academy of Arbitrators membership), and the ability to correlate it with case and outcome characteristics, reveals relationships not previously observed in the literature. We also are able to correlate grievant characteristics, including gender and length of service, with case and arbitrator characteristics. We examine the incidence of and effect of attorney representation in discipline and discharge cases and correlate those variables with the offenses for which employees were disciplined and discharged. With regard to offenses, we coded information on forty-three different offenses, sometimes grouped into nine super-categories, and are thus able to report far more detailed information about the relationship between offenses and outcomes than any prior studies. We also are able to test many assumptions that appear as conventional wisdom in the arbitration literature, affirming some and challenging others, about such issues as use of the Seven Tests of Just Cause, the effect of last-chance agreements, and whether an employee s length of service increases a grievant s likelihood of success. A. Comparing Outcomes in Discharge and Discipline Cases 1) Most of the arbitrated cases involved discharges (69.68 percent), followed by suspensions (25.11 percent) and, lastly, reprimands (5.21 percent). 2) In round numbers, management s discipline and discharge decisions were fully sustained by arbitrators in 50 percent of cases, arbitrators reduced employer sanctions in 29 percent of cases, and fully reversed them in 21 percent of cases. 3) Distribution of discipline and discharge decisions across employer win, union win, and split decision outcomes was relatively stable over the , and clusters of years. 4) Management s chances of fully winning in arbitration were greatest in discharge cases (52.44 percent), followed by suspension cases (43.99 percent), and then reprimand cases (41.12) percent. 5) Unions chances of fully winning in arbitration were greatest in reprimand cases (40.18 percent), followed by suspension cases (23.84 percent), and then discharge cases (19.20 percent). B. Comparing the Public and Private Sectors 1) The proportion of all arbitrated discipline and discharge cases arising from the public sector steadily increased between 1982 and 2005.
3 2) The employers win rate was significantly higher for public sector discharges (56.17 percent) than for private sector discharges (48.83 percent). 3) Sexual harassment and off-duty misconduct were more frequently arbitrated in the public sector. Arbitrations concerning absenteeism were more common in the private sector. 4) Arbitrators were more likely to rely on the Seven Tests of Just Cause in private sector cases than in public sector cases. 5) Arbitrated non-discharge discipline cases arose four times more frequently from the public sector than the private sector. 6) There was no significant difference in arbitrator reliance on mitigating and procedural factors between the public and private sectors. 7) Arbitrators were more likely to reduce discipline on the basis of a grievant s good work record in the public sector. 8) Outcomes in public sector statutory cases arising under laws requiring just cause for the discharge or discipline of veterans and teachers were similar to outcomes in public sector cases arising under collective bargaining agreements. 9) Arbitrators in public sector statutory cases seldom ordered reinstatement without back pay, but were twice as likely to order reinstatement with partial pay (suspension). C. Arbitrator Characteristics 1) Arbitrator gender bore no relationship to suspension and reprimand outcomes. 2) In discharge cases, the percent of employer win decisions issued by female arbitrators (60.17 percent) significantly exceeded the percent of employer win decisions issued by male arbitrators (51.88 percent). 3) In discharge cases, male arbitrators issued significantly more split decisions (29.81 percent) than female arbitrators (21.16 percent). 4) Arbitrator age was not systematically related to award outcomes, regardless of the type of discipline imposed by the employer. 5) Relatively few arbitrators decided a proportionately large share of awards. Approximately 14 percent of arbitrators decided slightly more than 59 percent of awards. 6) Arbitrators with the heaviest caseloads (e.g., 50 or more cases in our data base) were more likely than arbitrators with lighter caseloads (fewer than 50 cases) to issue split decisions in
4 discharge cases (31.22 percent vs percent) but not in discipline cases. Further, in matters of discharge, arbitrators with the heaviest caseloads were far more likely to issue a management win (51.02 percent of awards) than a split decision (31.22 percent). 7) In discipline cases, there was no significant relationship between the arbitrator s educational background and case outcome. In discharge cases, however, arbitrators with master s, law and doctorate degrees were significantly more likely to issue employer win decisions over union win decisions. Arbitrators with master s (60.56 percent) and Ph.D. degrees (59.64 percent) were more likely to issue employer win decisions than were those with law degrees (48.75 percent). 8) In discipline cases, arbitrators who were academics were significantly more likely to favor the employer (50.42 percent) than were arbitrators who were practicing attorneys (38.98 percent). In discharge cases, arbitrators who were neither practicing attorneys nor academics had the highest management win rate of percent, followed by academics (57.51 percent) and, lastly, by arbitrators who were both practicing attorneys and academics (50.87 percent). Arbitrators who were both practicing attorneys and academics issued the most union win outcomes (26.09 percent). 9) Non-attorneys and NAA members ruled for employers relatively more often in both discharge and discipline cases. 10) Non-attorney arbitrators were more likely than attorney arbitrators to rule in favor of employers in cases in which employees were disciplined or discharged because of either insubordination or absenteeism. 11) NAA members were more likely than non-members to rule in favor of employers in cases in which employees were disciplined or discharged for unsatisfactory performance. 12) Attorney arbitrators were more likely, and NAA members less likely, to state explicitly that they were applying a preponderance of the evidence proof standard. 13) NAA members were more likely than non-members to employ the clear and convincing standard of proof and less likely than non-members to require proof beyond a reasonable doubt. 14) NAA arbitrators were more likely to order reinstatement without back pay. 15) NAA members were less likely to reduce discipline on the basis of procedural faults. 16) Attorney arbitrators were more frequently selected for public sector statutory cases. 17) Non-lawyers more frequently ruled for employers in public sector statutory cases involving veterans.
5 D. Grievant Characteristics 1) A female grievant s chances of having her suspension revoked or having her reprimand rescinded was significantly 1.36 times higher than for a male grievant. In discharge arbitrations, female and male grievants were equally likely to prevail. 2) Whether the gender of the arbitrator and grievant matched did not significantly affect the arbitrator s decision, regardless of the type of discipline. 3) For alleged insubordination, property damage and sexual harassment, the grievants were more likely to be men, while women were more likely to arbitrate discipline or discharge for unsatisfactory performance and theft. 4) Regardless of the type of discipline imposed, there is no statistical evidence that arbitrators treated a grievant s length of service (looking at employees with fewer than ten years of service and those with ten or more years of service) as a mitigating factor. 5) Arbitrators cited to mitigating factors more than twice as often as due process factors in reducing discipline. 6) The most commonly invoked mitigating factors leading to a reduction in penalty were punishment too severe, good work record, and lack of progressive discipline. 7) The most commonly invoked procedural factors leading to a reduction in penalty were lack of notice of possible disciplinary consequences and lack of evenhandedness in the level of discipline imposed. E. Party Advocates 1) The share of disciplinary cases that did not involve representation by legal counsel has steadily declined from to ) There was no correlation between a party s representation by an attorney and outcomes in discipline cases, but there was in discharge cases. In discharge cases, when both or neither party used an attorney the odds that either party would win were unchanged, but a party s odds of winning increased when it was the only party with an attorney. The benefit of being the only party with an attorney were enhanced in discharge cases when the arbitrator was not an attorney. If the arbitrator was an attorney and only the union had an attorney, the union won percent of its cases, but if the arbitrator was not an attorney the union won percent of the time. If the arbitrator was an attorney and only the employer had an attorney, the employer won percent of the time, but if the arbitrator was not an attorney the employer won percent of the cases. 3) The offenses for which both sides were most likely to be represented by counsel were sexual harassment, drug use and off-duty misconduct. Employers were represented by attorneys
6 in more than 80 percent of the cases involving threats and assaults of supervisors, threats to coworkers, and sexual harassment. F. Offenses 1) Grievants charged with having committed more than one offense were significantly less likely to prevail fully in arbitration than were grievants charged with only one offense, regardless of the type of offense. 2) Three offense categories (unsatisfactory performance, absenteeism and insubordination) individually accounted for more than 10 percent of all discharge offenses arbitrated and together these three categories accounted for more than 45 percent of all discharge offenses arbitrated. 3) The only offense categories that continuously declined in relative frequency over the twenty-four-year period of the study were attendance and absenteeism. 4) Absenteeism was much more commonly arbitrated in discharge cases than in cases of lesser discipline. 5) Among offense categories with at least 25 employer wins, employers were most successful in cases alleging drug offenses and least successful in cases alleging sexual harassment and abuse of students, patients, or inmates. In offense categories with at least 25 union wins, unions were most successful in cases alleging theft. In offense categories with at least 25 split decisions, sexual harassment was most likely to yield a split decision. 6) In discharge cases, employers prevailed most often in cases involving drug and performance allegations and least often in cases involving insubordination, on-duty misconduct, and off-duty misconduct. 7) In suspension cases, employers prevailed most often in cases involving performance and off-duty misconduct allegations and least often in cases alleging insubordination and attendance problems. 8) Employer win rates in attendance cases were highest in discharge cases, lower in suspension cases, and still lower in reprimand cases. Employer win rates in performance cases were high across all levels of discipline. 9) Arbitrators relied on mitigating factors most frequently to reduce discipline in cases involving drug, performance, insubordination, and off-duty misconduct allegations. 10) Arbitrators frequently cited provocation as a basis to reduce discipline based on allegations of violence, but did so less frequently when discipline was based on allegations of insubordination.
7 11) Arbitrators relied on a lack of progressive discipline to reduce discipline based on onthe-job misconduct and performance allegations, but did so less frequently when discipline was based on allegations of off-the-job misconduct and poor attendance. 12) Arbitrators relied on procedural factors most frequently to reduce discipline in cases involving allegations of insubordination. G. Assessing Conventional Wisdom 1) The Seven Tests of Just Cause were argued by advocates and utilized by arbitrators much less frequently than most of the arbitration literature would suggest. We found no mention of an advocate s reliance on the Seven Tests in more than 95 percent of cases. In more than 90 percent of cases arbitrators did not rely upon the Seven Tests. Of the arbitrators in our data base, twothirds never used the Seven Tests. 2) Arbitrators rarely refer in their awards to an explicit quantum of proof standard (proof by a preponderance of the evidence, clear and convincing evidence, or proof beyond a reasonable doubt ). An explicit standard was articulated in only percent of discipline awards and only 24.1 percent of discharge awards. There was no evidence that there was a relationship between an articulated standard of proof and outcomes in either discipline or discharge cases. 3) Even in cases in which employees were disciplined or discharged for conduct that would be considered a crime or a matter of moral turpitude, heightened standards of proof, such as clear and convincing or beyond a reasonable doubt, were rarely used. 4) If a grievant was working under a last chance agreement when discharged, the odds of a full union victory fell by approximately 50 percent, and the odds of a split decision fell by about 40 percent. In contrast, employer win rates increased from percent to percent. 5) Arbitrators imposed longer no-pay periods with respect to discharges reduced to suspensions (11 weeks) or to reinstatement without back pay (37 weeks) than did employerimposed sanctions (one week). 6) Tenure was not a significant mitigating factor in most cases; employees with 10 or more years of service had slightly less favorable outcomes than those with fewer than 10 years of service. 7) Arbitrators retained jurisdiction in only percent of discharge cases in which reinstatement was ordered. 8) Most decisions (52.78 percent) did not explicitly require discharged grievants awarded either full or partial back pay to mitigate lost earnings.
8 H. Other Unique Findings 1) Delay had an insignificantly discernable effect on award outcomes. 2) Arbitral insistence on proof beyond a reasonable doubt has declined over time to the point of near disappearance in the more recent years of our study. 3) More experienced and more prolific arbitrators were least likely to rely upon the Seven Tests in crafting their awards. 4) The prevalence of decisions ordering reinstatement without back pay decreased significantly between 1982 and 2005.
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