What does “interest arbitration” involve?

Interest arbitration is a process used primarily in labor relations when the parties involved, typically employers and unions, are unable to reach an agreement on the terms and conditions of a new contract during negotiations. This form of arbitration involves a neutral third party, known as an arbitrator, who listens to both sides' arguments and then makes a decision regarding the terms of the contract.

This process is particularly critical in situations where the parties cannot see eye-to-eye on key issues such as wages, working conditions, or benefits, and it serves to prevent prolonged disputes or strikes, ensuring that employees can continue to work under agreed-upon conditions. The arbitrator's decision is usually binding, meaning both parties must adhere to the terms set forth in the arbitration outcome.

In contrast, negotiating terms after a strike typically refers to discussions that occur post-conflict, while resolving grievances within the workplace pertains to addressing specific employee complaints, and extending existing contract terms does not involve negotiation but rather continuing current arrangements. Thus, the defining nature of interest arbitration lies in its role of setting contract terms when prior negotiations fail, making it an essential tool in labor relations.