This study examined the significance of environmental variables in using compulsory arbitration in contract negotiations for public sector law enforcement unions and their respective municipalities in the state of Michigan. By analyzing 517 jurisdictions in Michigan from the period 1990 to 1994 that provide law enforcement services, the analysis showed that cites have the highest overall frequency of arbitration use while villages had the lowest. A logistic regression equation was also constructed to determine what environmental factors influenced the use of arbitration. Results indicated that the form of government, the wealth of the municipality, the number of employees, and location have a direct and statistically significant effect on parties seeking Act 312 arbitration over collectively bargaining the labor contract.