Introduction

_Established as an independent agency of the United States government by the Labor-Management Relations Act of 1947, the Federal Mediation and Conciliation Service (FMCS) is responsible for preserving and promoting labor-management peace. FMCS provides mediation, arbitration and other conflict resolution services and programs to companies and their unionized employees aimed at preventing or minimizing conflicts in the collective bargaining process, and at improving labor-management relationships.

First among these services is Dispute Mediation, a voluntary process in which FMCS mediators serve as third party neutrals to facilitate the resolution of problems and disagreements in the negotiation of collective bargaining contracts. In this role, the effectiveness of the Service is dependent upon the skills, credibility, acceptability and experience of its mediators.

Continuing to grow in importance and use are FMCS Preventive Mediation services, education and training in collaborative processes which give the parties the knowledge and skills to improve the labor-management relationship, employment security and organizational effectiveness. FMCS also administers a grants program, providing funding for the creation and operation of joint labor-management committees.

When disputes arise over the interpretation or implementation of a contract, FMCS Arbitration services provide the parties with a computerized roster of qualified, private arbitrators from which to select. The arbitrator, acting in a quasi-judicial capacity, hears arguments, weighs evidence and renders a decision to resolve the dispute, usually binding on both parties.

FMCS is authorized to offer, through its Alternative Dispute Resolution services, mediation expertise to local, state and federal governments as a means of resolving administrative disputes and regulatory controversies in lieu of adjudication.

FMCS has become a major exporter of mediation and improved labor-management systems to nations around the world. Federal mediators have traveled to South America, the Far East, Central and Eastern Europe and Africa to provide training and consultation in labor-management processes and systems. And delegations from other countries are frequent visitors to FMCS National Headquarters in Washington, D.C.

1995 In Review

Fiscal year 1995 was a time of continuing volatility in United States labor-management relations, fed by heightened domestic and foreign competition, technological advances which have effectively rendered obsolete many traditional American workplace processes and the jobs which drive them, and a persistent march toward a deregulated economy. Industries long considered stable and "safe," such as gas and electric utilities and telecommunications, are losing regulated monopoly status with guaranteed markets and profits, and now face the prospect of pitched battles for every customer, based solely on retail price.

These powerful forces have pushed many American businesses and their unionized labor forces in polar directions. Some managers have responded by focusing totally on the bottom line, downsizing workforces, hardening contract bargaining positions and cutting costs wherever possible. Others have taken the view that strengthening the relationship with their workers can give them a competitive edge in the marketplace, and they have invested in their employees, providing education and training, leading to increased employment security, and they have moved toward a more partnering labor-management relationship.

Contract Negotiations Decrease

This environment, and the responses which it provoked, have been reflected in the numbers and the nature of the work of the Federal Mediation and Conciliation Service. Charged with preventing or minimizing the impact of collective bargaining strife on the nation's economy, FMCS recorded 10,000, or 14 percent, fewer notices of contract expiration in 1995 than in the year before. These notices, which unions and companies are required by federal statute to file with FMCS, are the trigger for the mediation process. The number of strikes also continued to decline from previous years. However, those work stoppages which do occur tend to be more contentious and longer in duration.

Analysis points to two major factors in this drop in 1995 contract expirations: more contract extensions and rollovers, in which company and union agree to simply continue operating under an existing contract, sometimes with minor amendment; and a steady, unmistakable trend toward contract terms longer than the traditional three years.

The 14 percent decrease in contract expiration notices led to an accompanying decrease of nine percent in contract negotiation, or dispute, cases assigned to mediators in 1994, and a corresponding drop of 14 percent in the number of dispute cases in which FMCS mediators were actively involved. In 1994, FMCS closed 5,993 contract negotiation cases with agreements, compared to 5,175 in 1995.

Preventive Mediation and ADR Caseloads Increase

At the same time, federal mediators are spending a larger proportion of their time working with company management and unions in Preventive Mediation, a variety of skills training in cooperative processes, such as joint problem-solving and joint decision-making, which help the parties recast their relationship and work more smoothly and productively together. Preventive Mediation cases jumped by 22 percent in 1994, and continued to increase by an additional 12 percent in 1995. In fact, Preventive Mediation, which had for years comprised about one-tenth of the Service's total caseload, increased to one-fourth in 1994, and to one-third of the caseload in 1995.

Another area of dramatic growth for FMCS has been in providing Alternative Dispute Resolution services and training to government agencies at all levels, far less expensive than litigation for settling disputes, such as employment discrimination complaints, environmental and public policy controversies, and generally in a shorter time frame. In 1994, the number of ADR cases completed increased by 14 percent, and last year, it jumped by another 29 percent.

Among the Service's ADR capabilities finding wider interest and use is in Negotiated Rulemaking, in which the mediator brings together government regulators and those they regulate to draft necessary rules, regulations and policies through negotiation and consensus. Results show that when those who will be affected by a regulation have the opportunity to participate in its development, the agency develops a better regulation, with less likelihood of legal challenge afterward.

FMCS Reinvention

Against this backdrop of change in the labor-management environment, the Federal Mediation and Conciliation Service undertook major initiatives to implement recommendations in the 1994 Mediator Task Force Report on the Future of FMCS and the Strategic Action Plan:1995-1997. The Task Force was a "grassroots" strategic planning effort, and envisioned an FMCS that would be customer driven and geared toward continuous improvement in its services and its performance. The FMCS of the future would be staffed by "360 degree" mediators, each fully capable of delivering every service and program in the FMCS arsenal. The emphasis would be on soliciting and acting on customer feedback, on building and strengthening the Service's relationship with the business and labor communities, insuring that all FMCS customers and potential customers are aware of the Service's full range of services, and on internal training and professional development for FMCS mediators and staff.

Field Organization Restructured

The FMCS field organization was restructured, consolidating nine districts into five regions and reducing 18 supervisory-level positions to 15. But more important than the reduction in the number of managers was the creation of a leadership team in each region, with clearly delineated roles and responsibilities.

The concept of team leadership was applied to the National Office, as well, with creation of a second Deputy Director position. This allows one Deputy to focus on the daily operations of the program and support functions in the FMCS National Office, and the other Deputy to oversee field operations, particularly critical during the period of transition from the previous district configuration to the new regional structure.

End of Year Professional Development Seminar

The 1995 FMCS National Professional Development Seminar ended the year on a positive note. The emphasis for 1995 was on practical, "take home" skills, based on the Interest and Capability Surveys and Individual Development Plans created by the Training Coordinator. A committee of mediators used those materials as the basis for developing the topics and focus for the Professional Development Seminar. The excellent work done in planning and organizing, selection of top speakers and trainers from the public and private sectors, and the workshops conducted by FMCS mediators, themselves, made this a particularly useful and productive conference.

Planning also began on the fiscal year 1996 Training Conferences in each of the five new regions. Like the national seminar, each educational activity is now focused on matching the skills and training provided to the individual needs of the mediators and staff.

FMCS leadership, mediators and National Office staff were involved in a wide variety of activities during fiscal year 1995. Yet every activity detailed in this Annual Report had common goals:

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