What is Binding Arbitration?

October 9, 2013

It’s no secret that the Connecticut State Police Union and Governor Malloy’s administration have had their differences over the past few years. Since 2011, the Union and Malloy have been locked in a dispute over raises and other benefits. Negotiations have come and gone, and a final attempt at resolution has come in the form of binding interest arbitration – and the results are in.

Last week, we heard what the arbitrator had to say; and his decision favored the Connecticut State Police Union, which represents 1,012 troopers, sergeants and master sergeants. Recommending that raises and other measures be included in a new three-year contract, the report from independent arbitrator Joel M. Weisblatt of Skillman, N.J. will go before the Legislature when it reconvenes in February.

The journey to reach this decision was a lengthy process, but binding interest arbitration eventually provided a resolution.

In 2011, the Connecticut State Police Union rejected labor concessions proposed by the Malloy administration. Since July 2012, the CT State Police Union has been operating under an expired collective bargaining agreement. In September 2012 after initial negotiations failed to produce a new contract, the CT State Police Union petitioned the State Board of Mediation and Arbitration to designate a mediator to assist in the negotiations. When the mediator was unable to resolve the impasse the negotiations went into binding interest arbitration.

Under binding interest arbitration, an independent arbitrator is tasked with selecting the “last best offer” of either management or labor. The arbitrator cannot create his or her own offer. The arbitrator also must consider, in part, “The history of negotiations between the parties including those leading to the instant proceeding; the existing conditions of employment of similar groups of employees; the wages, fringe benefits and working conditions prevailing in the labor market” [CGS 5-276a (5)].

The binding arbitration process was introduced in Connecticut under the state’s Municipal Employee Relations Act (MERA) in 1975 and the Teacher Negotiation Act (TNA) in 1979. Binding arbitration was adopted for state employees in 1986. To begin the process, both parties must submit their last best offers on each disputed issue to either a single arbitrator or a tripartite panel, which includes a neutral arbitrator and one “advocate” arbitrator for each party.

In a 2006 report from the Legislative Program Review & Investigations Committee, certain patterns were found in an analysis of binding arbitration. In general, cities and suburbs use arbitration more than rural areas. Findings also show that arbitrators choose to award management’s last best offers more frequently than labor’s offers under MERA. In TNA arbitrations, each side is awarded at roughly the same frequency, but teachers’ offers for general wage increases and health insurance premium cost share amounts are chosen more often.

Overall, binding arbitration is not a frequently used method of resolution. Between fiscal years 2002 and 2005 only 10 percent of TNA and 4 percent of MERA contracts were settled through arbitration. However, while it does not happen frequently, it is still an important process to understand. Some see it as a fair and timely method to resolve collective bargaining impasses, while others do not like that an external party is responsible for the final decision.

In the case of the CT State Police Union we have a proposed solution from the arbitrator that will go before the Legislature in February. If lawmakers take no action on it within 30 days, the proposal will go into effect, courtesy of the binding arbitration process.