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Professor David Lipsky is a leading academic and researcher in
the area of Collective bargaining and Dispute Resolution. He has
been on the faculty of Cornell University since 1969 and has held
various positions including Dean of the School of Industrial
and Labor Relations and has served on the Board of Directors of The Industrial
Relations Research Association.
This is the second part of an interview conducted for HR.com. Bolded lines represent questions posed by HR.com.
Since your discovery of the Narcotic and Chilling effect associated
with the use of arbitration, has there been any contemporary
developments to your theory?
It is funny you should mention that because we just completed a Labor
Relations seminar in Chicago and my partner Johnathon Brock – The
University of Washington wrote a report, technically speaking it was written
by a task force appointed by the Secretary of Labor in the U.S.,
sometimes called the “Brock Report” it was through a task force appointed
by the Clinton administration in 1994 it was like the public follow up to the
Dunlop commission. The task force was charged with looking into the
public sector. Anyway John was the Executive Director of that task force
and basically he wrote the report even though they’re were a lot of
distinguished people on the task force like Governor Florio from New
Jersey and other people.
The bottom line is what John and his colleagues noted was that there was
a lot of research in labor relations in the public sector in the 60’s and
70’s…but it seemed to fade away in the 80’s and 90’s as labor relations
moved into other areas. So there was a research gap…where we just
didn’t know… we had questions we had addressed and answered in the
60’s and 70’s but in the 90’s we just didn’t have the answers anymore. So
John and I did this conference in Chicago to help fill our research gap and
stimulate interest in public sector labor relations. So when you talk about
the Narcotic and Chilling effect updates…we have a paper…but we really
haven’t filled the research gap. For those of us who were around in the
60’s like Dave Luen, Tom Colkin who had done a lot of the early research
were loathe to admit/concede that basically some of our worst fears about
the Narcotic/Chilling effect have not come to pass. That over-dependence
on mediation or any kind of arbitration just hasn’t seemed to develop over
the last twenty years– thus no narcotic effect. We had the former Chair of
Public Employment relations Board of New York State, Pauline Consuela
took up this point in discussion with us at the conference, and she noted
that we have had compulsory arbitration in the case of police and fire
disputes…and there was a wide spread feeling that if you had compulsory
arbitration a Narcotic effect would develop and a lot of this is based on the
experiences and findings from under the Railway Labor Act and some of
it’s statutes… but the truth is, it is a rare year that they may reach 10
arbitration’s in New York State out of 100’s of units that may be
Were you surprised?
No not really, because I had been following this for a number of years. But
I think a number of people would be surprised where mandatory policies
have been instituted that a chilling or narcotic effect hasn’t developed.
Do these effects apply in non-unionized use of ADR in the
I’ll tell you one thing we have run into, even from the employers that are
very anti- ADR, is the feeling that if they put an ADR process into place
that is open and accessible to any employee …all they are going to do is
promote the free filing of claims and grievances. The feeling is that when
people have a tool available to them, they make use of it and become
dependent on it … that is in a sense a narcotic effect…creating a lot of
paperwork and administration in managing this additional area. But the
experience that most employer’s report is that that doesn’t happen…in fact
it is very much to the contrary…it appears that if you put a process in
place, people don’t use it.
A grievance procedure in a non-union workplace gets put out as part of
employee procedures and gets put out in things like employee handbooks
and benefit packages etc, the HR office and council office may know
about it…but the employees seem very reluctant to use it. They may think
it isn’t capable of resolving their problems. It is anything but a narcotic
effect…the theory that if you place a policy out there it will get over-used is
One of my colleagues, Inkthab Ali has come to sit in on the
interview. He is one of our managers and is in charge of our
technology department. The next question when using ADR
methods in the workplace, what are the legal implications and how
do you minimize the possibility of lawsuits despite having an ADR
system. i.e. Can a person, even if they agree to an ADR system,
waive their statutory rights.
This is one of those issues that is still being looked at and hasn’t been
totally resolved. Their is a court decision in the U.S. that immediately
comes to mind and that’s the Gilmer decision — It’s Gilmer vs. Interstate
Johnson Wayne – Supreme Court 1991… and it arose in the securities
industry, a stockbroker hired by the name of Gilmer – -worked for a
brokerage house Wayne, and had signed an agreement basically stating
he waived his right to sue his employer over any employment statutory
claim and agreed that if he had an employment dispute it would be
resolved ultimately by private arbitration. There came a time when Gilmer
was discharge by Interstate, Johnson and Wayne and Gilmer claimed it
was because of his age and it was a violation of the Employment Statute.
The employer said you have to arbitrate this, and Gilmer said that this was
a major violation and he wanted to go to the courts. Well the courts
examined the case and said the statutory waiver that Gilmer signed was
fine and they sanctioned that and the court said they were not going to
interfere with that.
In the U.S. under the law that developed under collective bargaining, the
Supreme and the lower courts have consistently followed a policy of
deferment to arbitration. There is a major exception to that a decision
made in 1974 Alexander vs. Gardner Denver, involving a black employee.
The Supreme Court carved out a decision there to protect Civil Rights.
INKTHAB – That’s a gray area there…surely there has to be a great
deal of exceptions to the rule based on extremes or degrees. Is
that still a gray area in the U.S.?
Yes…As we speak there are a number of cases working their way through
the courts right now. There is no consistent policy especially in non-union
environments; it’s just not clear what direction we are heading there. At first
glance the Alexander vs. Gardner case would appear to verify the decision
not to interfere with collective bargaining agreements…but that was later
looked at again. (Technically in the Alexander case it was not an
employment agreement that was signed.)
Those things need still to be resolved…we appear to be moving in the
direction of deference to private agreements…but who knows maybe with
our next election we will see some movement there.
In your opinion what are the Pro’s and Con’s of interest based
That’s a good topic…that’s one I take up with my classes. By interest
based bargaining you are referring to the ideas brought up by Fisher and
You know the book, Behavioral Theory of Labor Negotiations by Walton
and McKersie? Well that school of thought is the one I relate to and it is
different from the Fisher/Ury theory.
Walton and McKersie say there is both integrated and distributive
bargaining. They recognize that sometimes you want to be an integrative
bargainer and other tines a distributive one. Their prescription would be, a
negotiator needs to figure out if he wants to be a hard Milton negotiator or
playing a co-operative game. Sometimes in the same organization you
may do a little of both. It depends on the circumstances, it depends on the
framework it depends on the negotiators and a lot of factors.
I think Fisher and Ury incorrectly assume that it is always one or the other,
rather that an integrated game. (Bob’s insight…affirmed by David Lipsky)
This theory is missing the Political infringements that occur in bargaining
and the managerial hierarchy factors.
Even culture has an impact, for example there are certain parts of the U.S.
where I would never be an interest based bargainer – I’d lose my shirt –
get my legs cut out from under me.
I think it is better if you can lead with Interest based negotiations if
you can make it work… as long as the attitudes are constructive
Technology has infiltrated many facets of business, and this is
equally true in collective bargaining and dispute resolutions…what
value do you see in these tools?
I see very great value…but I don’t see this as a black and white
phenomenon, I think the fact is we have used technology, whatever ones
have existed in the past, to assist us with dispute resolution i.e. telephone –
a huge proportion of deals can be negotiated that way. The technology is
used to assist in the process…you use technology when it makes sense to
use it and you use face-to-face meetings when that makes more sense.
Whatever new technology tools we have we should utilize as it comes
naturally i.e. e-mail etc. The adaptation of technology into any task is only
integrated if it suits our purposes…if it doesn’t we don’t use it. SO, if it is
convenient, affordable and it works…it will be used. “It is not the
technology that drives the technique it is the technique that drives
the technology.” Quote highlighted by Bob to utilize…
Bob – comment on Calculation tools where you enter a negotiation
parameter and the tool spits out the equivalent cost…
I think some of those tools have been around for ages and I think a lot of
companies have tons of accessible data through their chose of software
that allow them to see the costs of any demand someone could make.
In major negotiations bargaining books are prepared in advance of
negotiation usually…they use software to do that. We use it just in
role-playing situations in class. I guess you could kind of say… “There
was a technical revolution in bargaining that occurred and we never
Final Question – Outline the benefits to the Human Resources
Professional of having an understanding of Labor Economics.
As a Labor Economist, I think knowing the economic reason behind things
is important no matter what you do whether you are in HR or a truck driver.
I think you develop a greater understanding and respect for the power of
the market. You understand how much can be done just in reliance on the
Also it cautions you about trying to interfere too much and that policies
and regulations and alike, will not be enough to overturn market forces.
You become alert to unintended consequences to policies and
procedures that you are following in an organization. I think you
develop a greater appreciation of no matter how abundant things
appear to be…everything is scarce in the end. Everything
becomes a matter of allocating in some effective or efficient
fashion. And Economics teaches a lot of basic lessons in that
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