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In the fall of 2000, Joan Parker got an unlikely invitation. The National Hockey League and its players union were looking for a new arbitrator to referee their spirited fights and wanted Parker to apply. Although she had plenty of experience as an arbitrator, she’d never done any sports-related work. She thought, what do I know about hockey? The petite, perfectly coiffed and impeccably dressed Parker hadn’t even been to a game since college, some three decades earlier. She was skeptical for other reasons. The job of lead arbitrator for the league and its players union had, in recent years, been a revolving door. Even the widely recognized dean of labor arbitrators, George Nicolau, had flamed out. “God,” Parker said to herself. “They’ve used and abused the best in the business.” Still, Parker is no fool. Landing a job as a sports arbitrator is, in her profession, akin to winning the Stanley Cup. After brushing up on Hockey for Dummies, she arrived for a two-hour meeting at American Airlines’ members-only club at LaGuardia Airport prepared to talk cross-checking and hat tricks. But league and union officials didn’t want to talk about the game. They wanted to know how Parker lasted so long as the arbitrator in other hot-blooded relationships, including 18 years as a primary umpire for the National Broadcasting Company Inc. and its unions. Figuring that she hadn’t a chance, Parker didn’t pull any punches. She explained that she tries to approach every dispute with intellectual honesty. Nor, she added, does she tolerate abusive behavior or plan to be at anyone’s beck and call. “Guys,” she said, “we’re not going to play this way: You’re not going to call me the night before a hearing, because I’m not going to take the call.” That got their attention. “We needed someone who was going to have the gumption to talk to us that way,” says L. Robert Batterman, the league’s lawyer and a partner at New York’s Proskauer Rose. Parker beat a half-dozen prominent contenders to win the job. In doing so, she became the first female arbitrator in professional sports. With Parker, 54, hockey has placed a high-stakes bet. The battles between the league and its players are notorious for their rancor and for their multimillion-dollar price tags. Under the terms of the game’s labor agreement, disputes over free agency and player discipline, among other things, get sent to Parker. Her decisions, like those of other “permanent” industry arbitrators, can have a significant impact on the future of a business or organization. Arbitrators’ influence extends over every sector of the economy that includes America’s 16.3 million unionized workers, or 13.5 percent of the total U.S. workforce. Where there’s an enduring dispute — whether it’s a contractual fight over a veteran postal worker suspended for drug use or an “interest” arbitration involving stalled negotiations over the terms of a collective bargaining agreement — arbitrators often get called in to break the logjam. Labor impasses can have huge repercussions. Consider that the 1997 strike at United Parcel Service Inc. cost the company an estimated $750 million in lost business (and the shipping giant faces another potentially debilitating teamsters strike this summer); a similar walkout at General Motors Corp. in 1996 cost the company more than $1 billion. Yet, despite their clout, Parker and her peers tend to have low profiles, recognizable only to those who regularly hire and fire them. Obscure or not, says Marina Lowy, associate general counsel at New York’s Mount Sinai Medical Center, these de facto judges plunge their hands into the “blood and guts” of a company. Arbitration isn’t for the squeamish. But it is the ultimate form of judge-shopping. In the politically charged world of labor relations, management and unions never stop jockeying for the better position. Yet finding a labor arbitrator who’s acceptable to both sides has never been easy, and the few who pass muster are usually booked months in advance. For decades, the most sought-after “neutrals” have been the academics and lawyers who helped define the rules of the collective bargaining game after World War II. Today they’re in their twilight years, setting in motion an inevitable generational shift with long-term ramifications. Members of the new vanguard, which include Parker and Martin Scheinman, a prominent Long Island-based arbitrator, have different histories and outlooks than their predecessors. Anecdotal evidence suggests that there are fewer of them, too, as many entrants opt instead for more promising careers as employment arbitrators — an altogether different job. Unlike labor arbitrations, which focus exclusively on unions and their collective bargaining contracts, employment disputes tend to consist of individual cases or class actions that seek broad remedies and big penalties for sex harassment, age discrimination and other civil rights violations. Evidence shows that employment cases are on the rise. In 2001, 2,159 employment cases were filed with the American Arbitration Association (AAA), a leading alternative dispute resolution organization, up from 1,342 in 1997. And last year the employment field got a boost when the U.S. Supreme Court approved mandatory arbitration clauses in employee contracts in Circuit City Stores, Inc. v. Adams. Some practitioners predict a wave of employment cases in coming years as companies, enticed by a less taxing alternative to litigation, insert arbitration clauses into worker agreements. So far, that hasn’t come to pass. Labor cases, on the other hand, appear to be declining. The total volume of labor arbitration cases is waning, according to the AAA. Last year the organization received 13,035 cases, down from 15,670 five years ago. Labor arbitrators are seeing these dual forces — a stagnant union movement combined with a spike in employment battles — reshape their profession. Labor arbitration used to mean a quicker and cheaper form of justice, where unions and management knock heads for a day over a discharged mechanic or a company’s pension plan in a hotel conference room. But employment arbitrations are more complex and costly. These cases grapple with federal and state laws, and are a lot more like litigation: Both sides submit briefs, there’s discovery, and arbitrators can award punitive and compensatory damages. Labor arbitration, on the other hand, focuses on contract interpretation, with the potential rewards limited to reinstatement and backpay. The burgeoning employment field means more work for the in-house lawyers who are under pressure to keep labor costs down. For them, being vigilant about the arbitrators they hire and fire is more important than ever. “I would be doing my client a disservice if I were not intimately involved,” says David Zimmerman, general counsel of the NHL. At 93, Sam Kagel of San Francisco is a pioneer among the older generation of arbitrators and a living testimonial to labor’s heyday. Since the Depression-era advent of federal labor laws and the successful organizing of large industrial companies after World War II, Kagel and his peers have meted out a unique brand of justice. They wield immense power over ordinary lives and corporate coffers. They’re known for thick skins and outsize egos. As Gerald McKay, an Orinda, Calif.-based arbitrator, puts it: “Many are self-made men, and they worship their creator.” In one key respect, they’re even more powerful than jurists — most of their decisions are not appealable. They operate in private, in an atmosphere that can be freewheeling. They hold court in hotel suites and airport lounges. Stentorian oratory gives way to flared tempers and cursing. Traditional judges enjoy, regardless of their reputation, a predictable work flow. Labor arbitrators have no job security. Their longevity depends on word of mouth; their reputation is only as good as their last decision. Getting fired is a way of life. Kagel hails from a bygone era. A onetime union representative, the California native and 1948 graduate of the University of California, Berkeley School of Law (Boalt Hall) has arbitrated for the National Football League and the Pacific Coast longshoremen, among others. Patrick Szymanski, GC of the 1.4 million-member International Brotherhood of Teamsters, who argued cases before Kagel in the early 1980s, says that the arbitrator had a knack for eliminating gamesmanship. Once Kagel heard from both sides, he would call them into a back room and say, “What’s really the issue here, and why can’t we get right down to it?” The barriers to entering the profession are low — arbitrators come from a hodgepodge of fields including academia, government and private practice. But supporting oneself in this job isn’t easy. Anyone, even a high school dropout, can arbitrate, yet he won’t get hired without a track record. Like an aspiring actor, “the first thing you do is get a day job,” advises Nicolau, arguably the most prominent “neutral” today. Nicolau, 77, was a union lawyer in the 1950s and 1960s, before he hung out his arbitrator shingle in 1969. He says he had five cases his first year, 18 the second, and didn’t go full-time until a decade later. For those who persevere, the payoff can be big (though, as they like to point out, not as big as for the lawyers who appear before them). Nicolau, who has umpired for Major League Baseball, the National Basketball Association, UPS and major airlines, commands a tidy $1,500 a day. Most sought-after arbitrators charge daily rates of upwards of $1,000. Their meters run not just on hearing days, but also for time spent reviewing cases and writing decisions and for last-minute cancellations. While the rates may not seem as high as, say, those of a junior associate, hearings typically run just a few hours. And some arbitrators will book two or more hearings a day, charging each party their full daily rates. With a resplendent townhouse in downtown Manhattan and another home in Ireland, Nicolau knows what a great living it can be. Yet, given the rough-and-tumble of union politics, the coterie of prominent labor arbitrators is relatively small — and shrinking. Nicolau spends almost half a year now at his 18th-century Irish house. And although Kagel rejects the notion of retiring to Florida to play golf, he’s not going to be around forever. Having once arbitrated a minimum of 200 cases a year, Kagel estimates he now hears roughly two dozen. The average age of members in the elite National Academy of Arbitrators is steadily rising, from 59 in the mid-1980s to 63 today. As a result of the aging of the old guard, the torch is being passed to up-and-comers like New York’s Scheinman, whose fiery style is reminiscent of Kagel’s. (In this profession, the old guard are septuagenarians or older; the Young Turks are younger than 60.) In-house lawyers are watching closely. The more heavily unionized a company is, the more active corporate counsel are in the process of selecting arbitrators and monitoring cases. Lowy of Mount Sinai says that it’s not only cost-effective but also smart politics to be hands-on. Her hospital doesn’t employ a “permanent” arbitrator to oversee all its disputes; instead, it uses a different arbitrator for each case. Typically, companies and unions hire outside counsel to represent them at those hearings. But Lowy, unlike many in-house lawyers, represents management herself. It’s a way to show that she’s not window dressing, says the associate GC. There are myriad ways that companies and their unions select arbitrators. Two of the more popular sources are the AAA and the Federal Mediation and Conciliation Service; both, for a fee, will provide a list of qualified candidates. In AAA’s case, each side eliminates as many contenders as it wants and then ranks the remaining arbitrators in order of preference. Ideally, there’s a match. If not, the parties are given a second, shorter list, which, unless there’s some serious objection, they’re forced to rank, and a winner emerges. Some collective bargaining agreements specifically provide for the hiring of arbitration panels. These so-called permanent arbitrators (“the greatest oxymoron,” quips a veteran neutral) serve limited terms; other organizations, like the NHL, rely on just one arbitrator. Parker’s contract runs for one year. Both sides will have to agree in order for her to get reappointed. Adding arbitrators, of course, is not like adding a 10th member of the Supreme Court. Recently, Kaiser Foundation Health Plan Inc., the Oakland, Calif.-based health care giant whose workforce is 85 percent unionized, found itself facing a two-year pileup of labor cases. Working with the union, Kaiser created a series of panels that eliminated the backlog. The GCs hiring arbitrators look for two things. First, they like to work with the pros. “I want someone who is empathetic, smart and able to run a hearing and not let it get out of control,” says Kaiser Assistant GC Kathleen Aure. Second, they want someone who leans a bit to their side. With that in mind, in-house counsel, HR departments, labor law specialists and a collection of consultants maintain databases tracking arbitrators and their decisions. At a minimum, large companies track their own results. “We follow [them] closely,” says Teri McClure, who heads a six-lawyer labor and employment department at UPS, which employs approximately 230,000 Teamsters. Decisions are reviewed, summarized and sent electronically to internal labor reps and, because the company doesn’t have a permanent arbitrator and outsources all of its labor arbitrations, to outside counsel. The AFL-CIO also keeps stats. But as Aure and others know well, the best arbitrators are booked solid. Conventional wisdom holds that 5 percent of the country’s arbitrators get 95 percent of the work, which contributes to a backlog at many businesses. For the next generation this supply problem, of course, spells opportunity. Many of them got their starts in the late 1960s and 1970s, when various states, starting with New York, enacted their own public sector unionizing laws that, in turn, created a demand for new arbitrators. But the younger guard faces the same acceptability problems their predecessors did, especially if they prefer to do primarily labor work. The stagnant union movement has created the impression that “the [labor] well may be drying,” says Thomas Roberts, a veteran arbitrator best known for ruling against baseball owners in a mid-1980s collusion case that culminated in a $280 million settlement. This is having a dramatic effect on labor arbitrations, say in-house lawyers. The cr�me de la cr�me are still booked solid. But many say that the new guard is less willing to make tough calls for fear of losing work. “They’re hungry and unsure of themselves,” says Kaiser’s Aure. What’s more, labor lawyers complain about arbitrators who cram multiple hearings into a single day, charging each party their standard daily rate. Adds the Teamsters’ Szymanski: “[Today] you’re hiring a substitute judge rather than a substitute wise man like Kagel or Nicolau who have the confidence and experience to insert themselves in the process and make it better.” lan Symonette, a 47-year-old Philadelphia arbitrator, is feeling the critics’ sting. He got his big national break nearly two years ago, when he was tapped by Major League Baseball and its main umpires union to decide the fates of 22 umpires who resigned in protest over stalled contract negotiations. The union wanted them rehired, but baseball owners balked. In his decision, issued last year, Symonette reinstated nine of the 22 umpires, incurring the wrath of both sides, who figured that Symonette waffled. He paid a price. Within weeks, Symonette was canned from a baseball salary arbitration panel he sat on for four years. Some of his peers wonder if he’s benched for good. Symonette doesn’t sound worried: “You’re in the black box for a couple of years, and then, suddenly, you’re out.” In-house and outside labor lawyers say that some younger arbitrators take a slightly different tack to avoid incurring their wrath: They push the parties to settle. This may not sound like a big deal, but the grievance process leading up to arbitration provides ample opportunity for unions and management to resolve their differences. Arbitrators are called in as a last resort, when both sides are done talking. They’re not looking for a mediator. Scheinman, a 49-year-old arbitrator for The New York Times Co., Airborne Express and more than 200 nursing homes in the New York-New Jersey region, is known to encourage union and management to resolve their differences. His peers cynically say it’s because Scheinman will schedule as many as four hearings a day (each at his full $1,200 rate) and simply doesn’t have time to hold full-blown hearings. Scheinman, for his part, makes no apologies for his style. A good referee, he says, doesn’t lose sight of the fact that, unlike traditional litigants, labor and management are locked in permanent relationships that must outlast internecine scuffles. If that means brokering a settlement that’s in the best long-term interest of both parties, so be it. “They all say [they don't want to settle], and guess what?” says Scheinman. “They don’t want to settle until they lose the case. Then they’ll say, ‘If I had known I wasn’t going to win … ‘ What am I supposed to say?” Parker, the NHL arbitrator, symbolizes another trend. For starters, she’s a woman in what is still largely a men’s club. Current data does not exist, but a 1987 survey of 3,669 labor arbitrators found that 91.5 percent were male (and 96.5 percent were white). Parker, who got her start arbitrating in 1976 at the age of 27, says that gender has actually played to her advantage: “A woman has certain soft qualities that, if used properly and at the right time, can diffuse a hot situation.” For another, she’s morphed into a hybrid arbitrator, taking on more employment arbitrations. So while Parker says that a year ago 85 percent of her work involved labor matters and 15 percent employment, today that split is roughly 75-to-25 out of 100 cases a year. Over coffee at the Pyramid Club, atop Philadelphia’s Mellon Bank Building this spring, Parker describes her NHL work as the most difficult she’s ever done. The league is governed by two sets of contracts: a single omnibus agreement that’s at least 160 pages long and, by all accounts, a garbled mess; and hundreds of individual players’ contracts that must be consistent with the master agreement. The contract language can be difficult to follow, and terms within the umbrella agreement often conflict. While the work has been enjoyable — and, she takes pains to note, both sides have behaved respectfully — she doesn’t know how long she will survive: “[Labor lawyers] have many masters to serve. These are high-earning people with very big egos. They get pissed. What do they do? Kill the messenger.” Her day of reckoning is fast approaching. At press time Parker said she had some tough decisions to make, including a dispute over when an NHL club can buy out an injured player’s contract. Parker hints that her rulings aren’t going to please everyone, and she knows that, come September, either party can give her the boot. Does she think she’ll survive? “I don’t know,” she says. “Ask me that a few months from now. Related Chart: Changing of the Guard

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