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 to prevent or minimize conflicts in the collective bargaining process, and to improve labor-management relationships.

The Service’s core responsibility 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 knowledge, 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 processes and labor-management systems to nations around the world. Federal mediators have traveled to South America, the Far East, Central and Eastern Europe and Africa providing training and technical assistance in the creation of labor-management systems, particularly in those countries with a developing economy in which no modern labor relations systems existed. And delegations from other countries are frequent visitors to FMCS National Headquarters in Washington, D.C.

Fiscal Year 1996 was marked by continuing volatility in market forces, which has had direct and profound bearing on the nation’s labor-management relationship. American business is searching for ways to retain market share in the face of heightened domestic and foreign competition in products and services, as more traditional sectors of the U.S. economy became internationalized.

Management’s uncertainty has been mirrored in organized labor’s apprehension about job and employment security, manifesting itself in the issues of outsourcing and job protection in contract negotiations in many types and sizes of industry.

In some cases, this highly competitive marketplace has pushed businesses and their unionized labor forces into opposing hardline bargaining positions. Some managers, feeling pressure for financial performance from shareholders, have responded by focusing solely on the bottom line, downsizing workforces and cutting costs wherever possible. Correspondingly, some union leaders decided it was time to draw the line and stop making contract concessions. They’ve taken strong stands to protect the existence of their members’ jobs. These countervailing forces inevitably result in antagonistic contract negotiations, and even protracted strikes and lockouts. Although the number of work stoppages continues to decline, those that do occur tend to be more contentious and of a longer duration because they revolve around what are perceived to be "life and death" issues.

However, a growing number of companies have taken the view that strengthening the relationship with their workers can actually 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 more union leaders are realizing that an organization’s managers and workers will ultimately succeed or fail together, that their job security and future prosperity are interdependent. These attitudes, and a willingness to take the first step, have paid off in a more partnering labor-management relationship, which benefits the company and the worker alike.

These dynamics and responses are reflected in the work of the Federal Mediation and Conciliation Service, charged with preventing or minimizing the impact of collective bargaining strife on the free flow of commerce.

FMCS mediators are assigned approximately 20,000 collective bargaining negotiations per year. In many of these, they closely monitor the progress of the negotiations, and are frequently in touch with both sides, offering suggestions to increase the likelihood of contract agreement. In about one fourth of these negotiations, the mediator is actively involved with the disputing parties at the table. Federal mediators closed 5,285 negotiations with contract agreements in 1996, a two percent increase over the previous year. And federal mediators are successful in helping the parties reach agreement in 85 percent of the cases in which they are active.

The mediation process is triggered with a notice of contract expiration, required by federal statute to be filed with FMCS 30 days prior to expiration or modification of a collective bargaining agreement. In 1996, FMCS recorded 481, or 0.8 percent, fewer notices of contract expiration than the year before. A growing number of contracts were extended or "rolled over," with company and union agreeing to continue operating under the existing contract, sometimes with minor amendment. There is also a slow, yet unmistakable, trend toward contract terms longer than the traditional three years.

Another important area of service for FMCS has been Alternative Dispute Resolution (ADR). This involves providing services and training to settle disputes, such as employment discrimination complaints, environmental and public policy controversies to local, state and federal government agencies. The use of ADR allows these kinds of disputes to be resolved at a much lower cost than litigation, and generally in a shorter time frame. In 1994 and 1995, the number of ADR cases completed increased by 43 percent. Nineteen ninety-six saw a decrease of 8 percent below that level, largely due to government budget uncertainties.

Among the Service’s ADR capabilities finding wider interest and use is Negotiated Rulemaking, in which the mediator brings together government regulators and those they regulate to draft necessary rules and regulations 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 ultimate result is a better regulation, with less likelihood of legal challenge afterward. The same process has been applied to negotiations in which groups of citizens, working with government regulators or policy makers, participate in determining public policies to prevent or resolve disputes over such issues as public land and water use, water rights or the use of public facilities.

The forces which have such push and pull on labor-management relations in the United States are evident in the scope and direction of the Federal Mediation and Conciliation Service. The needs of FMCS customers are changing. And so, FMCS must constantly examine its programs and performance, and adapt to an evolving workplace environment. The last three years have seen major initiatives in updating and improving the content of FMCS Preventive Mediation programs, changes in mediator hiring and evaluation criteria, heightened emphasis on internal training, the introduction of modern communications technology to the agency’s widespread field operation, and important changes in leadership structure and philosophy. All of these changes have had one goal: to transform FMCS into a performance-based, customer responsive organization.

It began in December 1993 with a grassroots strategic planning process, the Mediator Task Force on the Future of FMCS, which defined the FMCS of the 21st Century and identified those changes in attitude, direction and capability necessary to turn that vision into reality. In 1995, armed with a three-year blueprint, the Strategic Action Plan, the structure and roles of the Service’s leadership were redesigned and rewritten; a new leadership team was put in place in the field and National Office; unprecedented emphasis was placed on mediator training and professional development; standards for new mediator hiring were changed to attract men and women with the demonstrated capability of quickly becoming "360 degree" mediators, capable of providing the full range of FMCS services; and a commitment was made to provide the mediators with the technological tools they needed to work smarter.

In 1996, all the pieces of a reinvented FMCS were in place. The new Education and Training Coordinator, working with field and National Office leaders, developed an Individual Development Plan (IDP) for every FMCS employee. Through Capability and Interest Surveys, every employee identified their own job-related strengths and weaknesses. Based on those surveys, IDPs matched the employee’s needs with training opportunities. Internal training sessions for field mediators, managers and staff were tied to IDPs, and outside training was provided when more appropriate and efficient.

A training sequence was designed for new mediators, in which experienced FMCS mediators and top labor-management and dispute resolution experts from the private sector conducted three, one-week sessions. This is augmented by an "apprenticeship" period, in which the new mediators accompany, then work with seasoned mediators, then begin to take on mediation case assignments of their own. The approach provides new mediators with the most intensive and comprehensive professional training in FMCS history.

Regional conferences were held in the Service’s five geographic regions, as training became part of every employee’s job responsibility. Even quarterly leadership business meetings, bringing regional and National Office managers together to handle policy and administrative matters, include a training component.

Twenty six new mediators have joined FMCS this year. All of them met the new, more flexible hiring standards requiring "substantial," rather than a set number of years of full-time experience in collective bargaining negotiations, a thorough knowledge of the collective bargaining process, a knowledge of joint processes to improve labor-management relations and the ability and commitment to quickly become 360-degree mediators.

In 1994, only 25 percent of the mediators had access to computers, only one third of the Service’s 75 field offices were equipped with fax machines, and there was no internal network linkage of any kind. Reports were still being completed on typewriters. Much of the casework files and reports were being transmitted by mail and delivery service. An immediate commitment was made to upgrade the Service’s communications technology.

The 1995 and 1996 budgets included funding earmarked for the new equipment. By the end of 1996, every mediator field office was equipped with computer and fax machine. Care was taken to design an integrated system that would be expandable over time, to include eventually electronic notice and report filing, travel management, data reporting, procurement and financial management functions, in addition to meeting basic administrative and case management needs.

In 1996, all FMCS field offices, regional offices and the National Office were linked by an Intranet, which also gives all stations access to the FMCS Resource Clearinghouse and its electronic library of resource and training materials.

FMCS’ first ever National Customer Survey received funding in the 1996 budget and was conducted. At year end, the Service is awaiting the results and analysis. The baseline survey was designed and administered by labor-management research professionals from M.I.T.’s Sloan School of Management and the University of Massachusetts. The use of outside contractors to conduct the survey ensured quality, credibility of the results and confidentiality for the respondents.

The survey instrument was sent to a representative sample of 1200 FMCS customers and potential customers, drawn from the Service’s data base of notice filings. Each of the 1200 in the sample were contacted in advance to verify their participation in particular contract negotiations involving FMCS mediators, so that only those who had direct experience with mediators would receive the survey. The survey was also pre-tested with 200 respondents to check the validity (non-bias) of questions.

The results will provide a baseline of information about customer awareness and attitudes toward FMCS and its mediation services, be used to help FMCS develop indicators for performance measurement and to generate a dialog with customers about the state of labor-management relations.

Nearly 1,800 leaders of the labor-management community from across the United States and several foreign countries gathered in Chicago, Illinois in 1996 for the Eighth National Labor-Management Conference, sponsored by FMCS. The conference, held for the first time outside Washington, D.C. to accommodate the growing number of participants, featured 52 different workshops examining a wide range of issues, including Interest-Based Bargaining, health care cost containment, outsourcing in the public and private sectors and organizational restructuring. Twenty-five mediators and staff from FMCS moderated or assisted with the workshop sessions.

Plenary speakers included U.S. Senator Paul Simon, AFL-CIO President John Sweeney, United Airlines Chairman and Chief Executive Officer Gerald Greenwald, former New Jersey Governor James Florio, co-chair of the U.S. Secretary of Labor’s Task Force on Excellence in State and Local Government Through Labor-Management Cooperation, and FMCS Director John Calhoun Wells.

The biennial event is considered to the premier labor-management conference in the United States, focusing on actual experience in more cooperative labor-management environments.

The American workplace is undergoing extraordinary change. As Federal Mediation and Conciliation Service customers strive to build, maintain and increase market share in this dynamic environment, they frequently turn to FMCS for new and different mediation services. If FMCS cannot provide what the customers want and need, it will quickly become obsolete.