First Contract Arbitration: Effects on Bargaining and Work Stoppages

Newly certified unions often experience difficulty negotiating a first agreement. To remedy this, the Employee Free Choice Act (EFCA) proposes that the National Labor Relations Act (NLRA) provide for first contract arbitration. Using a panel of Canadian jurisdictions that have introduced FCA legislation at different times over several decades, the author addresses three questions: (1) How does First Contract Arbitration (FCA) legislation affect the incidence of first agreement work stoppages? (2) Does FCA encourage or discourage collective bargaining in the negotiation of first agreements? (3) Does FCA influence the duration of first agreement work stoppages? First, the author finds that the presence of FCA legislation reduces first agreement work stoppage incidence by at least 50 percent. Descriptive measures reveal that FCA is accessed infrequently; it is even rarer for a first contract (in whole or in part) to be imposed. Second, the fact that FCA is associated with a substantial reduction in work stoppage incidence, when combined with evidence that it is rarely used, suggests that FCA encourages collective bargaining. Finally, first contract arbitration has no statistically significant impact on the duration of first agreement work stoppages