industrial arbitration, method of settling disputes between employer and employees by seeking and accepting a decision by a third party. Such arbitration may be compelled by the government, as in New Zealand (since 1894), Australia (since 1904), Canada (since 1907), Italy (since 1926), and Great Britain (since World War II). In other cases, it may be by voluntary agreement, as is often the case in the United States, where the government occasionally intervenes in the case of a strike affecting the public welfare (see Taft-Hartley Labor Act) by persuading the parties concerned to accept the decision handed down by the arbitrator. Additionally, the Supreme Court ruled in 2001 that companies can insist that employment-related disputes (such as discrimination suits) go to arbitration rather than to court. Arbitration machinery in the United States has been set up at both federal and state levels in the form of mediation and arbitration boards. The American Arbitration Association, founded in 1926, has nearly 17,000 members who help settle labor disputes. In voluntary arbitration a formal agreement is usually made to abide by the decision.
See F. Elkouri, How Arbitration Works (1985); M. Bognanno, Labor Arbitration in America (1992).