Originally Posted by
tracon
Arbitration, is when a neutral third party helps build a bridge between the two sides.
Binding arbitration is when both sides present a contract and the arbitrator picks one.
If one side is to extreme, ie: the employer offering to little or the employee asking to much, that contract gets thrown out.
The arbitrator picks the more reasonable option.
Mediation is when a neutral third party helps build a bridge between the two sides.
One form of arbitration is as described above - the arbitrator picks one proposal or the other without alteration. The more common form of arbitration is that the arbitrator listens to arguments from both sides and formulates a recommendation based on what he\she feels is the best and fairest settlement, or in more practical terms, the settlement most likely to result in an agreement. Binding arbitration is when the two sides agree in advance to abide by the arbitrator's decision.