submitting a controversy to an impartial person, the arbitrator, chosen by the two parties in the dispute to determine an
equitable settlement. Where the parties agree to be bound by the determination
of the arbitrator, the process is called BINDING ARBITRATION.
In labor law, arbitration has become an important means of settling disputes, and the majority of labor contracts provide for arbitration of disputes over the meaning of contract clauses.
COMPULSORY ARBITRATION: in which the parties are forced to agree, is generally not provided for in federal law. The states, however, have increasingly provided for compulsory arbitration in areas beyond the control of federal law, such as police and firefighters' contracts.
NONBINDING ARBITRATION: process where the parties are free to follow the arbitrator's findings or disregard them and proceed to court. The arbitrator's decision is not final.
Source: Barron's Dictionary of Legal Terms, Steven H. Gifis, 5th Edition; © 2016