Background
In recent years, the resolution of individual workplace conflict has occupied an increasingly important place in policy debates and formulation due to the decline in collective industrial action and the coinciding rise in the volume of employment tribunal applications (Carducci, 2012). As employment disputes become more entrenched due to shifting trends in labor relations, parties to the dispute (e.g., employers, employees, and third parties) are increasingly relying on alternative methods of dispute resolution to address their differences in a timely and cost-effective manner (Coluin & Gough, 2015; Emerson, 2009). This paper discusses how the Midwest Airlines flight attendants’ contract dispute was effectively addressed through the use of arbitration as an alternative dispute resolution mechanism.
Form of Dispute Resolution
As already mentioned, the dispute involving Midwest Airlines and part of its employees (flight attendants) was solved through arbitration. According to Hart (2015), arbitration is a form of alternative dispute resolution where the parties to a contract or dispute “agree to have a dispute heard before a private arbitration forum and finally decided by a single arbitrator or a panel of arbitrators instead of going to court to have their dispute heard publicly and decided by a judge and/or jury” (p. 4). Although arbitration is increasingly gaining currency as a preferred dispute resolution process in the business world, companies, attorneys, and employees need to think through the benefits and risks of the process before making a decision (Sklar, 2013).
Analysis of Why Arbitration was Chosen
Arbitration was chosen over other methods such as litigation and negotiation due to its many advantages in solving labor or employment-related disputes. In the case scenario, arbitration was chosen over other dispute resolution mechanisms due to privacy (arbitration is conducted in a private forum and the proceedings are typically confidential), capacity of the parties to the dispute to participate in deciding their favorite arbitrator, minimal costs involved, time concerns, the finality of the decision reached by the arbitrator, and informality (Sklar, 2013). Open proceedings such as litigation were disadvantageous to the organization (Republic Airways) due to reputation concerns and the costs involved in settling huge court awards to the disgruntled employees. On their part, employees felt that their concerns would be appropriately addressed by a neutral arbitrator and that the dispute could be solved in record time instead of dragging in courtrooms for long periods.
The issue in the Dispute and Position of Parties
The employment dispute revolved around contract violation, where an estimated 400 flight attendants of Midwest Airlines found themselves without jobs and accrued terminal benefits after the company was purchased by Republic Airways Holdings. The position of the sacked employees was that their union contract contained explicit provisions that safeguarded their employment in the event of a merger with another organization, implying that they were to continue being inactive employment once Midwest was purchased by Republic Airways. As such, Republic Airways Holdings went against the specific provisions of the contract by sacking the flight attendants and withholding their terminal benefits (Arbitration, n.d.). On its part, Republic Airways Holdings maintained that it had a right to replace Midwest Airlines flight attendants with other low-paid employees to lower operating costs and ensure the viability of the business in the long term.
Because a breach of contract is an issue that can be successfully arbitrated by competent individuals and/or arbitration panels (D’Alesio, 2014; Halbert & Ingulli, 2011), the Association of Flight Attendants (AFA) filed a grievance to the chosen arbitrator accusing Republic Airways of violating the terms set in the contract. The grievance revolved around the decision by Republic’s management to staff the flights with new low-paid flight attendants even when it was apparent that the contract signed by Midwest flight attendants specified that their employment would be protected if the airline was purchased by another organization (Daykin, 2011).
The outcome of Resolution Process and Effectiveness
In March 2011, the arbitration panel ruled in favor of AFA and held that a settlement was to be negotiated between Republic Airways and the union with the view to compensating former Midwest flight attendants for breach of a legally binding contractual agreement (Daykin, 2011). The effectiveness of the outcome is that it is legally binding to both parties in the same manner and context a court of law determination would have been binding. Hart (2015) acknowledges that “a final arbitration award is final and cannot be appealed, barring exceptional circumstances usually involving fraud” (p. 7). The determination that Republic Airways was to negotiate with AFA for a settlement in favor of former Midwest Airlines flight attendants was therefore a finality that could not be appealed by any party to the employment dispute.
Recommendations
Although the Midwest case is an outstanding example of the many advantages of arbitration when it comes to solving employment disputes related to contractual violations, the arbitrator should have been given the leverage to determine the final compensation of former Midwest flight attendants as opposed to just laying the framework for negotiating a settlement in favor of the employees. Determining the final compensation, in my view, could have substantially reduced the emergence of other complications related to how much compensation the employees were supposed to get. Additionally, it could have been plausible for the arbitration panel to illuminate the standards and legal contexts that were used to conclude to ensure that parties understood the methodologies and rationales that were employed. Republic Airways, for instance, may feel that the outcome was less favorable due to failure by the arbitrator to disclose the standards and legal contexts used.
References
Arbitration. (n.d.). Web.
Carducci, G. (2012). The importance of legal context and other considerations in assessing the suitability of negotiation, mediation, arbitration and litigation in resolving effectively domestic and international disputes (employment disputes and beyond). St John’s Law Review, 86(2/3), 511-541.
Coluin, A.J.S., & Gough, M.D. (2015). Individual employment rights arbitration in the United States: Actors and outcomes. Industrial & Labor Relations Review, 68(5), 1019-1042.
Daykin, T. (2011). Flight attendants win labor contract arbitration case. Web.
D’Alesio, D.J. (2014). The benefits and risks of using presuit voluntary binding arbitration as an alternative dispute resolution process in medical malpractice cases. Florida Bar Journal, 88(10), 20-27.
Emerson, R.W. (2009). Business law (5th ed.). Hauppauge, NY: Barron’s Educational Series.
Halbert, T., & Ingulli, E. (2012). Law and ethics in the business environment (7th ed.). Mason, OH: South-Western.
Hart, K. (2015). Arbitration: The good, the bad and the ugly. Business Credit, 117(5), 4-7.
Sklar, S. (2013). Arbitration advocacy: Its role in business and legal education, and new options for dispute resolution. DePaul Business & Commercial Law Journal, 11(4), 441-453.