The importance of grievance arbitration as a method of settling labor disputes was not formalized until the 1970s.

Grievance arbitration as a method for settling labor disputes has been a significant aspect of labor relations well before the 1970s, with its roots tracing back to the early 20th century. The formalization and widespread adoption of grievance arbitration procedures were notably advanced with the establishment of the National Labor Relations Act (NLRA) in 1935, which encouraged arbitration as a means to resolve labor disputes.