Types of Arbitration

A. Grievance Arbitration
Grievance arbitration is a procedure that is provided for in a labor contract between a union and an employer. A grievance is a claim that the labor contract has been violated. A neutral arbitrator is chosen by the parties to resolve the dispute. The arbitration award is binding on both parties.

B. Interest Arbitration
Interest arbitration is similar to fact finding in that a neutral listens to the parties and then states in writing how to settle the collective bargaining agreement. Interest arbitration for police and fire employees in Michigan, known as Act 312 arbitration, is binding on the parties. The award is in essence the labor agreement for the parties.

C. Arbitration of Statutory Disputes

Arbitration of Statutory Disputes is the resolution of disputes, such as discrimination claims, through arbitration. This type of arbitration is usually the result of a non union contract agreement. Some employers require their employees to sign agreements stating that they will use arbitration rather than litigation for any disputes involving their employment. These agreements between the employer and employee are typically held by the courts to be binding on both parties.

For an example of a statutory dispute award click here.

Three Types of Arbitration in 3 minutes