Arbitration and Mediation

        I have to admit I did not know the difference between arbitration and mediation until I met Marla.  I am a news junkie, but that only promoted my misunderstanding.  I now realize most news stories covering union negotiations don’t know the difference either.

        Marla worked for the Federal Mediation and Conciliation Service.  This is a small federal agency with only about 265 employees that reports directly to the President. 

        The mediators with FMCS work to settle all kinds of disputes including things like wages, benefits and discharges.  Most of these mediations involve unions and union contracts. 

        The mediator’s job is to get the two sides to agree.  The two sides are normally union and management.  This can be a horrendous task. 

        This job is compounded by the fact that that mediator is just a facilitator in the middle and has no official power or authority.  The mediator is trying to find some compromise that both sides can live with. 

        The mediator sometimes has to be the bad guy making both sides mad at him or her.  A good settlement is often one where neither side is happy. 

        The mediator has to try to educate and persuade both sides to agree to some compromise.  This is sometimes not possible.    

        Since Marla has retired she is now works part-time as an arbitrator.  If mediation does not work and an agreement cannot be reached, the case may go to binding arbitration. 

        Unlike a mediator, an arbitrator has the power to make a binding decision.  An arbitrator is similar to a judge. One union steward I knew referred to the arbitrator as God.   An arbitrator’s decision is final and binding.

        Another major difference with an arbitrator is there are no compromises.  The arbitrator must pick one side.  When I first heard this, I was surprised.  I thought the arbitrator could make some compromise between the two parties. 

        This makes a lot of sense when we think about it.  It forces both parties to propose their best offer.  The arbitrator then picks the best one.  If one side’s offer is extreme, like they would propose if compromise where an option, they are assured of losing.

        If the arbitrator had the option of making some compromise, one or both sides would propose some ridiculous offer hoping for some compromise in the middle.  The logic is simple.  The more ridiculous one side’s proposal, the more the “Compromise in the Middle” is to their benefit.  This does not work with arbitration. 

        I like to use this “Compromise in the Middle” metaphor to show the stupidity of some political compromises.  I ask you to give me all your money.  You object.  I then ask you to give me half your money.  How can you object to that?  I compromised and met you in the middle. 

        This is about as ridiculous as some of our current federal budget proposals.  If both sides are proposing budgets with deficits, the only difference is how fast the government goes bankrupt.  It makes me mad when I hear talk of compromise when one proposed budget ignores the debt problem and the other barely addresses the problem. 

        Maybe we need an arbitrator for the federal budget so we can get some sanity.  I would offer my services.  Marla probably would too.  She might even waive her normal fee.