A form of dispute resolution called “baseball” arbitration has increased in use and popularity in the construction industry to resolve all types of disputes, including employment disputes. The procedure has unique mechanisms that may be beneficial to construction industry employers in resolving disputes.
While long-used successfully in salary negotiations in major league baseball, baseball arbitration is not limited to salary negotiations or major league sports.
In baseball arbitration, the pre-arbitration proceedings and arbitration hearing itself are not necessarily any different than any standard arbitration. However, in this type of arbitration, each party submits a proposed award — a single figure — to the arbitrator. The arbitrator must select one of the two numbers submitted, period. There is no middle ground. This strict requirement creates an interesting dynamic, with heightened pressure on the parties to objectively take stock of their respective positions, be as reasonable as possible, and be able to justify their proposal.
A compelling reason behind the use of baseball arbitration is that, all too often, arbitrators are at least perceived to render a compromised award by “splitting the baby.” This can be detrimental to parties who, in fact, are reasonable in their view of a claim’s value, but far from their opponent’s estimation.
Baseball arbitration forces the parties to focus on what relief they genuinely and...
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