Final Offer Arbitration

Final Offer Arbitration is a method used to resolve labor disputes where the arbitrator must choose one party's proposed final offer on all the disputed issues, without modification or compromise.

Example #1

For example, in a union contract negotiation, if the employer and the union cannot agree on wages, benefits, or working conditions, they may submit their final offers to an arbitrator who will then choose one of the offers as the final agreement.

Misuse

An example of misuse in Final Offer Arbitration could occur if one party submits an extreme proposal knowing it is unlikely to be accepted, leading to an unfair outcome. This tactic can exploit the process and jeopardize the interests of the other party.

Benefits

The benefit of Final Offer Arbitration is that it can motivate both parties to submit reasonable proposals and negotiate in good faith to avoid an extreme offer being chosen by the arbitrator.

Conclusion

Final Offer Arbitration can be a useful tool in resolving labor disputes, but it must be used judiciously and in good faith to ensure fairness and protect the rights of both employees and employers.