In a case where a salary is being arbitrated, I believe that an arbitrator can make any decision he wishes. He can award the salaried employee the amount that employee is requesting, the amount the employer is offering, or any other amount, including (although rare) an amount *under *what the employee is requesting or an amount over what the employer is offering. And he can split the difference somewhere if he wants. Am I correct?
Jurisdiction?
It’s not true in Australian industrial relations law: an arbitrator of an industrial dispute (and this would be an industrial dispute) must make a decision within the scope of the dispute. But in the United States it may be different.
I think it depends. I believe in some arbitrations the arbitrator can only choose between the two alternatives that the disagreeing parties have submitted for his judgement - the arbitrator cannot split the difference and come up with his own figure. This encourages the two parties to submit a suggestion which is close to what they believe is a real reasonable figure.
In the U.S., it depends entirely on the agreement between the parties which calls for the arbitration. In Major League Baseball, for instance, where salary arbitration is implemented by the Collective Bargaining Agreement between baseball and the players’ union, the arbitrator can pick the team’s proposed salary or the player’s proposed salary, nothing else. He can’t even split the difference. But an arbitration agreement might well have different terms allowing the arbitrator more discretion.
–Cliffy
All of the answers given above are correct, but I’ll supplement a bit by just saying that, in the U.S., extremely wide discretion is given to arbitrators. Generally, an arbitral decision can only be overturned by a showing of corruption/fraud or if the arbiters exceeded their powers (which is generally just the limits provided for in the arbitration agreement).