A Quantitative Assessment of the Effect of First Contract Arbitration on Bargaining Relationships

• Date: 01 July 2015
• DOI: http://doi.org/10.1111/irel.12098
• Author: Bradley R. Weinberg
• Published date: 01 July 2015

A Quantitative Assessment of the Effect of First

Contract Arbitration on Bargaining

Relationships*

BRADLEY R. WEINBERG

This article investigates first contract arbitration’s (FCA) capacity to foster

bargaining relationships and deter misconduct by analyzing its effect on decertifi-

cations. Using time-series cross-sectional (TSCS) analysis with data from nine

Canadian provinces over a four-decade period, it shows: (1) FCA correlates with

20 to 37 percent fewer decertifications in provinces that have an FCA provision

relative to those that do not; (2) of the various types of FCA, the automatic and

fault forms have the most robust effect on decertifications while the mediation-

arbitration form may have the largest effect on decertifications; and (3) the effect

of FCA is heightened in the presence of card-check certification such that the best

results for fostering bargaining relationships may be found in the presence of both

policies.

Introduction

The most recent attempt at labor law reform in the United States, the

Employee Free Choice Act (EFCA, Bill H.R.1409.IH), sought to amend the

National Labor Relations Act (NLRA) by introducing three changes: (1) a

card-check mechanism for union certification, (2) first contract arbitration

(FCA), and (3) harsher penalties for violations of the Act. The focus of this

article is on the second of these reforms. By granting access to arbitration in

certain first contract situations in which the parties are unable to reach a settle-

ment themselves, this amendment was included to address difficulties that

newly certified bargaining units experience securing a first collective bargain-

ing agreement.

*The author’saffiliation is Cornell University, Ithaca, New York; Email: brw58@cornell.edu.

The author would like to thank Alex Colvin, Chris Riddell, Samuel Kleiner, and Mark Gough for all of

the helpful comments and suggestions regarding this and earlier versions of this paper, as well as the partici-

pants of the ILR LR & ICL Colloquium and the GIRA Spring School for the useful feedback provided dur-

ing presentations of this paper.

INDUSTRIAL RELATIONS, Vol. 54, No. 3 (July 2015). ©2015 Regents of the University of California

Published by Wiley Periodicals, Inc., 350 Main Street, Malden, MA 02148, USA, and 9600 Garsington

Road, Oxford, OX4 2DQ, UK.

449

Advocates of FCA claim it will allow newly certified employees the oppor-

tunity to participate in meaningful collective bargaining that will result in a

contract, even in the face of a determinedly antiunion employer. Furthermore,

proponents hope the presence of a collective agreement will stabilize new bar-

gaining relationships, allowing them to develop and be maintained in the long

term. Opponents of FCA, on the other hand, contend that it will hinder free

collective bargaining and that imposing contracts on parties will not result in

long-term bargaining relationships because the agreements were not produced

voluntarily.

This study enters the debate on whether FCA can result in the development

of bargaining relationships by examining its effect on decertifications. Because

EFCA failed to pass the U.S. Senate in 2009 due to a filibuster, there is no

FCA in the private sector of the United States and thus, no U.S. data with

which to test this relationship. However, FCA has existed in numerous Cana-

dian provinces for decades, as well as the Canadian federal jurisdiction, and

this study uses Canadian data to contribute to the FCA debate that is taking

place in both countries.

Although there is a moderate amount of research concerning FCA in Can-

ada, there are a number of deficiencies in this area, some of which this study

seeks to address. The majority of extant studies restrict their analysis to cases

in which the union or employer applies for or receives access to the FCA pro-

cess. Their results neglect to measure any deterrent effect, in which the parties

are compelled to settle the agreement voluntarily out of fear of having one

imposed upon them, that FCA might (and is intended to) produce. This is a

potentially drastic oversight considering other studies show that the FCA

machinery is rarely accessed, suggesting that its effectiveness may rely heavily

on the deterrence of employer misconduct (Johnson 2010; Rose 2006). By

including the totality of the industrial relations system that falls under provin-

cial labor law, this study accounts for any deterrence of employer misconduct

in first contract situations in which the FCA machinery is not utilized. Such an

approach will hopefully provide a more accurate depiction of the outcomes of

FCA because it comprises both the direct and indirect effects of such legisla-

tion.

Many of the previous studies also focus on only one province or type of

FCA and do not use rigorous statistical analysis to isolate the influence of

FCA in the presence of extraneous factors. This study not only looks at the

aggregate effect of FCA on decertifications regardless of the type of FCA, but

it is the first to model the different types of FCA for a quantitative analysis.

Thus, this is the first study that allows for the comparison of each type of

FCA against a base case of a province that lacks an FCA provision. All of this

is performed through time-series cross-sectional (TSCS) analysis using ordin-

450 / BRADLEY R. WEINBERG