Was Harry Shulman Right?: The Development of Arbitration in Labor Disputes

By Getman, Julius | St. John's Law Review, Winter 2007 | Go to article overview
Save to active project

Was Harry Shulman Right?: The Development of Arbitration in Labor Disputes

Getman, Julius, St. John's Law Review


In 1952, a customer brought suit against the partners of a securities brokerage firm under section 12(2) of the Securities Act of 1933 ("Securities Act"),1 alleging misrepresentation.2 The firm moved to stay the trial on the grounds that the agreement between the parties specified that "arbitration should be the method of settling all future controversies."3 The district court denied the motion, determining that enforcing the arbitration clause would be "[in]consistent with the policy and language as expressed by Congress in the Securities Act."4 The court of appeals reversed, holding that Congress intended to favor arbitration in the Securities Act, and failed to express intent to forbid arbitration in suits brought pursuant to section 12(2).5 The Supreme Court, in reversing the court of appeals, concluded that requiring arbitration would deprive the plaintiff of advantages Congress intended him to have in a suit at law.6 The Court noted that, "[a]s their award may be made without explanation of their reasons and without a complete record of their proceedings, the arbitrators' conception of the legal meaning of such statutory requirements as 'burden of proof,' 'reasonable care' or 'material fact,'. . . cannot be examined."7


In 1955, Dean Harry Shulman of Yale Law School, who also served as permanent arbitrator under the collective bargaining agreement between the United Auto Workers Union and Ford Motor Company, delivered the prestigious Oliver Wendell Holmes Lecture at Harvard Law School.8 His lecture described the relationship between labor arbitration, productivity, and industrial relations in a large manufacturing enterprise.9 He noted that due to the pressure of the negotiation process, collective bargaining agreements inevitably contain areas in which disagreement between the parties is inevitable, such as seniority and discipline.10 Shulman concluded that at its best, labor arbitration is preferable to court litigation for such disputes because the arbitrator is in a position to consider the industrial relations implications of the decision and to become familiar with the parties and their specific needs.11 In dealing with the most complex and deeply felt issues, Dean Shulman argued that the arbitrator's role is "creative more than interpretive."12 Because the arbitrator is a creature of the parties, and not bound by adherence to precedents, legal doctrine, or the rule of law, he has wider latitude than a judge. He argued that "[a]nswer[s] in the form of rules or canons of interpretation is neither practical nor helpful. . . . In the last analysis, what is sought is a wise judgment."13

According to Shulman, it is the limited nature of the arbitrator's jurisdiction and his role as the servant of the parties that enables him to give wise answers to difficult questions of interpretation.

He is not a public tribunal imposed upon the parties by superior authority which the parties are obliged to accept. . . . He is rather part of a system of self-government created by and confined to the parties. He serves their pleasure only, to administer the rule of law established by their collective agreement. They are entitled to demand that, at least on balance, his performance be satisfactory to them, and they can readily dispense with him if it is not.14

Shulman noted that the arbitrator is expected to and should play a more active role in the process than would be appropriate for a judge because his decision should frequently be based on subtle non-legally relevant criteria.

And so, for several reasons, the arbitrator cannot simply sit back and judge a debate. He must seek to inform himself as fully as possible and encourage the parties to provide him with the information.

His choice from the more or less permissible interpretations of the language of the agreement, keeping the basic conceptions in mind, requires an appraisal of the consequences of each of the possibilities.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Was Harry Shulman Right?: The Development of Arbitration in Labor Disputes


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?