Can a Virginia city negotiate a binding arbitration clause in a collective bargaining agreement with its employees' union?

Plain-English summary

Effective May 1, 2021, Virginia Code § 40.1-57.2 authorizes localities (cities, counties, towns, and school boards) to enter into collective bargaining agreements with their employees' exclusive representatives. The statute is silent on the details, leaving the structure of such agreements to local discretion.

Majority Leader Charniele Herring asked the AG whether that discretion extends to grievance procedures that culminate in final, binding arbitration. The AG answered yes. Under Virginia's Dillon Rule, localities exercising authorized powers have reasonable discretion to choose implementation methods. Three considerations support binding arbitration:

• Existing arbitration authority. Section 15.2-1404 expressly allows local governing bodies to include arbitration clauses in their contracts. The Virginia Uniform Arbitration Act (§ 8.01-581.01) establishes a public policy favoring arbitration, including arbitration of employer-employee disputes.
• Grievance procedures and arbitration are central to collective bargaining. The U.S. Supreme Court in United Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574 (1960), called grievance machinery "the very heart of" collective bargaining, and Litton Financial Printing, 501 U.S. 190 (1991), called arbitration arrangements a "mandatory subject of bargaining."
• Local grievance discretion is already broad. Sections 15.2-1503, -1506, and -1507 give localities substantial control over how employees may be disciplined and how disputes are resolved, including the ability to provide alternative grievance procedures employees may elect.

The opinion covers grievance procedures for (i) breaches of the collective bargaining agreement; (ii) breaches of city personnel policies or employment law pertaining to the employee; and (iii) appeals of disciplinary actions. All three categories may end in binding arbitration.

Currency note

This opinion was issued in 2021. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Until 2021, Virginia state law prohibited public-employee collective bargaining at the local level. The General Assembly enacted § 40.1-57.2, effective May 1, 2021. The statute permits localities to authorize collective bargaining for their employees but does not require it; each locality decides whether to opt in and on what terms.

Section 40.1-57.2 is silent on the details, including grievance procedures. The Dillon Rule's "reasonable exercise" standard (City of Virginia Beach v. Hay, 258 Va. 217 (1999)) governs the locality's discretion: the locality may implement collective bargaining in any reasonable way that is consistent with legislative intent.

Virginia's existing public policy favors arbitration of local government disputes. Section 15.2-1404 allows local governing bodies to execute a contract containing a provision to submit future controversies to arbitration. The Virginia Uniform Arbitration Act establishes that "the public policy of Virginia favors arbitration," and the opinion notes that Act applies to local governments, including arbitration agreements between employers and employees or their representatives.

The existing local grievance framework is in §§ 15.2-1503 (discipline standards), 15.2-1506 (grievance procedure required for localities with 15+ employees), and 15.2-1507 (components of the procedure, plus authority to adopt alternative procedures employees may elect). The opinion frames the new collective bargaining authority as another "alternative" grievance avenue, slotting naturally into the existing scheme.

Common questions

Q: I'm an employee covered by a new collective bargaining agreement in Virginia. Can my grievance go to arbitration?
A: If your collective bargaining agreement includes an arbitration provision (and per this opinion, it can), then yes. The arbitrator's decision in such a procedure is final and binding.

Q: Does the arbitrator have to be jointly selected?
A: The opinion describes joint selection from a list of arbitrators, which is the standard model in collective bargaining. Particular agreements may differ, but joint selection is supported by the opinion's framework.

Q: Can the agreement cover discipline appeals?
A: Yes. The opinion addresses three specific categories, including appeals of disciplinary actions. Section 15.2-1503 already gives localities authority to set discipline procedures; collective bargaining can structure those procedures with binding arbitration.

Q: Can a locality choose not to allow arbitration in its collective bargaining agreements?
A: Yes. Section 40.1-57.2 leaves the implementation to local discretion. A locality can authorize collective bargaining but exclude binding arbitration if it chooses. The opinion says binding arbitration is permitted, not required.

Citations and references

Statutes:

• Va. Code § 8.01-581.01 (Virginia Uniform Arbitration Act)
• Va. Code § 15.2-1248 (Local government arbitration)
• Va. Code § 15.2-1404 (Arbitration clauses)
• Va. Code § 15.2-1503 (Discipline standards)
• Va. Code § 15.2-1506 (Grievance procedure required)
• Va. Code § 15.2-1507 (Components of grievance procedure)
• Va. Code § 40.1-57.2 (Local collective bargaining)

Cases:

• City of Virginia Beach v. Hay, 258 Va. 217 (1999) (Virginia Supreme Court; Dillon Rule reasonable exercise)
• United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574 (1960) (U.S. Supreme Court; grievance machinery and collective bargaining)
• Litton Financial Printing Div. v. NLRB, 501 U.S. 190 (1991) (U.S. Supreme Court; arbitration a mandatory subject of bargaining)
• TM Delmarva Power v. NCP of Virginia, 263 Va. 116 (2002) (Virginia Supreme Court; public policy favors arbitration)
• City of Portsmouth v. Cederquist Rodriguez Ripley, 72 Va. Cir. 405 (2007) (Portsmouth circuit court; Dillon Rule does not preclude arbitration)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2021/21-009-Herring-issued.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Mark R. Herring
Attorney General

March 1, 2021

Delegate Charniele L. Herring
Majority Leader
Post Office Box 11779
Alexandria, Virginia 22312

Dear Delegate Herring:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You ask whether, under the provisions of the recently codified version of Virginia Code § 40.1-57.2 (effective May 1, 2021), a local government may negotiate a grievance procedure with an exclusive representative culminating in final and binding arbitration by an arbitrator selected jointly by the exclusive representative and the public employer from a list of arbitrators and covering: 1. allegations of breach or misapplication of the collective bargaining agreement; 2. allegations of breach or misapplication of city personnel policies or employment law pertaining to an employee; and/or 3. appeal of disciplinary actions?

Applicable Law and Discussion

Beginning May 1, 2021, Virginia Code § 40.1-57.2 will empower localities to negotiate and enter into collective bargaining agreements with their employees' exclusive representatives. The statute is otherwise silent as to any additional direction to the localities regarding this authorization. Given this lack of specificity, under Virginia's application of the Dillon Rule, localities choosing to authorize collective bargaining have a scope of discretion, which must be reasonably exercised.

Whether a city may negotiate with its employees' union a grievance procedure that culminates in binding arbitration depends on whether that is a reasonable method to accomplish the goal of collective bargaining, or whether it is contrary to legislative intent. The intent of § 40.1-57.2 is to allow for local public employee collective bargaining, and grievance procedures are widely considered to be a central tenet of collective bargaining.

The General Assembly has authorized and encouraged arbitration of disputes involving local governments. Section 15.2-1404 provides that the "governing body of any locality may execute a contract which contains a provision to submit to arbitration any controversy thereafter arising." Further, the Virginia Uniform Arbitration Act establishes "the public policy of Virginia favors arbitration." That Act is applicable to local governments including "arbitration agreements between employers and employees or between their respective representatives."

Section 15.2-1503 permits local governments to establish standards and procedures under which their employees may be suspended or removed, with § 15.2-1506 requiring localities employing more than fifteen individuals to "have a grievance procedure ... that affords an immediate and fair method for the resolution of disputes." Section 15.2-1507 then sets forth several means by which local governments may satisfy the requirements in § 15.2-1506. Under § 15.2-1507, local governing bodies that fail to adopt a grievance procedure are deemed to have adopted the procedure applicable to Commonwealth employees. Next, it allows local governments to adopt their own grievance procedure which "shall include" certain enumerated "components and features." Local governments may provide an alternative or additional grievance procedure that employees may elect to pursue in lieu of the procedure described in § 15.2-1507. Local governments, therefore, have broad discretion over implementing the grievance procedure in § 15.2-1506 that complies with the requirements of § 15.2-1507. Employees who have alternative grievance procedures have the right under § 15.2-1507 to utilize that alternative.

Conclusion

By authorizing local government collective bargaining, by expressly authorizing local governments to include arbitration provisions in agreements, and in light of existing policy favoring the use of arbitration by local governments, local governments may include in collective bargaining agreements entered into under § 40.1-57.2 grievance and dispute resolution procedures culminating in final and binding arbitration.

With kindest regards, I am,

Very truly yours,

Mark R. Herring
Attorney General