Section 7121(b)(C) of the Federal Service Labor-Management Relations Statute (the Statute) requires that all negotiated agreements contain a negotiated grievance procedure which includes provisions for binding arbitration. It goes on to provide that all negotiated grievances not satisfactorily resolved shall be subject to binding arbitration which may be invoked by either the union or the agency, but not an employee. (Of course, even if dissatsfied with the agency's decision, the union is never obligated to invoke arbitration.)
Arbitration is a proceeding in which a neutral third party, chosen by the participants to the grievance, hears both sides of the dispute, reviews evidence, and renders a final and binding decision. (See your negotiated agreement for specific details on how an arbitrator is selected at the installation.) An arbitration hearing is similar to a court proceeding but is less formal. Its purpose is to enable the arbitrator to learn all the relevant facts of the case through interrogation of both sides. Each party selects its own representative - management's representative is usually the installation's labor attorney with the union's representative being the local union president, a national union official or a privately hired attorney.
A supervisor involved in a grievance that goes to arbitration may be called as a witness. Their testimony will be vital to the agency in educating the arbitrator as to the actions taken (or not taken) which support the agency's position. Well before the arbitration, the supervisor will be contacted by management's representative to discuss the case and to review their testimony.
Arbitration should not be taken lightly and should only be sought when all other methods for resolving a dispute have failed. Besides being costly (normally arbitrator's fees are either split between management and the union or the loser pays all), both management and the union may lose all control of the outcome and the arbitrator's award may ultimately be unsatisfactory to both parties.
While it is said that arbitration is final and binding, there are limited occasions where an exception to an arbitrator's award can be filed. According to the Statute, an arbitrator's award will be found deficient if it is contrary to any law, rule or regulation or on other grounds similar to those applied by Federal courts in private sector labor-management relations. (Exceptions are filed with the Federal Labor Relations Authority by Headquarters, Department of the Army, or the Defense Civilian Personnel Advisory Service.)