High Risk Final Offer Interest Arbitration in Oregon

Ronald L. Miller



Dissatisfied with conventional interest arbitration for public safety employees, the Oregon legislature set about to diminish the use of interest arbitration and to limit the discretionary authority of arbitrators. Under Oregon s new procedure, the arbitrator is limited to selecting either the union s or the employer s last-best offers, total package-by-total package. In this high-risk form of interest arbitration, a party wins all or loses all. In selecting between the total packages, the arbitrator must use decision criteria specified in the law. Comparing use-rate of interest arbitration in the two years before the revisions and the two years after the revisions, the number of cases was cut in half and the number of issues per case was also substantially reduced. However, the objective to reduce arbitrator s discretionary authority has been only partially achieved. Overall, the legislature created an interest arbitration procedure that contains substantial strike-like risks for the parties that use it.

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