JJT Speech -- Baltimore IRRA April 28. 2003

**BULLET POINT SUMMARY**

-   Highlight differences between work at NLRB and FMCS

-   Focus of discussion today will be FMCS arbitration and recent
    changes we've made

-   **[Some basic information on Arb Services]{.underline}**

```{=html}
<!-- -->
```
-   1350 rostered arbitrators;

-   Qualifications;

-   Cease advocacy work;

-   Arbitrator review board;

-   Roster is not a lifetime guarantee -- can be removed from roster

```{=html}
<!-- -->
```
-   **[Request of panels with R-43 form --]{.underline}**

```{=html}
<!-- -->
```
-   Parties can receive panels with experience in particular industry;

-   Parties receive detailed biographical sketch to see if arb meets
    their needs;

-   Bio includes fees, recent awards, published materials, ability to
    work in geo area;

```{=html}
<!-- -->
```
-   **[Last year, 20,000 request for panels]{.underline}**

```{=html}
<!-- -->
```
-   Details of breakdown of panels in private sector, average days in
    hearing, avg dollar amount;

-   Discharge and discipline remain most common issue;

```{=html}
<!-- -->
```
-   **[As for recent developments]{.underline}**

```{=html}
<!-- -->
```
-   Changes include changes in technology, i.e., panels on line, fee
    reduction;

-   Public can select from geo area closer to site of dispute, reducing
    travel costs;

-   Strict guidelines on timeliness of awards;

-   Constant updating of "issues" listing that encompass new issues
    arising in arb so agency can answer public needs;

-   We will continue to improve service thru technology; now, much
    correspondence is by e mail and arb schedules hearings via e mail
    which avoids ex-parte problems

```{=html}
<!-- -->
```
-   **[Difference between FMCS and AAA]{.underline}**

```{=html}
<!-- -->
```
-   Arb prefer FMCS b/c of random selection of arb, but AAA picks the
    panel member -- we provide a panel list based on needs of parties;

-   FMCS is more willing to tell arb how many times their name was
    selected -- AAA does not;

-   FMCS roster costs for arb is cheaper -- AAA costs \$250, and we
    charge \$100;

-   For parties, FMCS is cheaper b/c the panel request fee is \$30 if
    on-line -- AAA is \$250;

-   FMCS allows arb to make arrangements on scheduling w/parties; AAA is
    a go between which is time consuming for the parties;

```{=html}
<!-- -->
```
-   **[Institute collaboration with Arb Services]{.underline}**

```{=html}
<!-- -->
```
-   Institute provides courses to help develop new arb and raise the
    level of advocacy for arb advocates -- two courses, one in arb and
    another, arb for advocates;

-   Pairing new arb with experienced ones

```{=html}
<!-- -->
```
-   **[Access to Neutrals]{.underline}**

```{=html}
<!-- -->
```
-   How it got started;

-   Point system for inclusion and agreement to abide by ethical
    standards and consumer complaint process;

-   Institute will work with the program to develop courses that conform
    with continuing education part of the program;

-   Initial cost of placement on roster is \$250, but annual fee has not
    been determined yet because it depends on placement on roster

As I understand it, many of you in the audience today are arbitrators
and I believe that we have a number of union and management
representatives present as well. As I result, I thought that many of you
would be interested in the FMCS' Arbitration Services, and in
particular, the recent developments in that department.

The FMCS has a roster of approximately 1350 arbitrators. To qualify for
the roster, an applicant must submit 5 arbitration awards prepared while
serving as an arbitrator of record chosen by the parties to labor
disputes. A decision to include an individual on the roster is based on
the applicant's experience, competency, and that person's ability to
take on decision-making roles in labor disputes. Prior relevant
experience as a judge or hearing examiner in labor relations is
generally given weight as well. If you were once an advocate for one
side or the other in a labor dispute, you must agree to cease your
advocacy work before you become a member of the roster.

All of our arbitrators are approved by the Arbitrator Review Board.

The Arbitrator Review Board includes a chairman and members appointed by
the Director. These members serve at the Director\'s pleasure. The Board
is composed entirely of full-time employees of the FMCS. The
Arbitrator's review board reviews the qualifications of all applicants
for listing on the Roster, and interprets and applies the criteria I
described earlier. The review board meets quarterly to consider new
applicants for appointment to the roster by the Director, Peter Hurtgen.

Once you're on the roster, it is not a guaranteed lifetime appointment.
The Arbitrator Review Board also has the right to recommend to the
Director the removal of arbitrators from the roster. An arbitrator can
be removed from the roster if the arbitrator has become an advocate, if
the arbitrator is repeatedly delinquent in issuing awards, or if an
independent inquiry shows that complaints of violations of the Code of
Professional Responsibility for Arbitrators of Labor-Management
Disputes, which really is an ethics guide agreed to by FMCS, the
National Academy of Arbitrators and the American Arbitration
Association, are warranted. The Director also has the right to look at
the number of times an arbitrator's name was placed on a panel and the
number of times that name was selected or rejected. This too is a factor
in one's eligibility to remain on the roster. The Arbitrator Review
Board reviews the status of all on the roster whose eligibility for
listing on the roster has been questioned.

In the last (*since Vella has been at the Agency- how long is that?)*
there have been no removals from the roster, although we have suspended
arbitrators from the roster twice, and neither have re-applied for
roster standing, as they are entitled to do. One suspension was for
repeatedly late awards, and another was based on complaints of the
parties that the award was unintelligible, and claimed that the parties
reached a settlement agreement, when they had not. That arbitrator was
suspended.

As with everything in government, to receive a panel from us, you have
to file a form. Its form R-43 -- don't ask me why the letter "R,"
because I myself am not sure why we chose the letter "R" and I might
never know. In any event, you request a panel by completing the R-43
form, which can now be done on line, through our website, which I will
go into in a moment. Once we receive the R-43 form, the Office of
Arbitration Services provides the disputing parties with a "panel" of
arbitrators selected by the geographical area requested by the parties.
The parties also have the opportunity to receive panels of arbitrators
that have experience in a particular industry, or that have particular
experience on a certain issue. We also provide you with detailed
biographical information about the arbitrator so that one can
intelligently decide the arbitrator that best suits their needs. The
biographies include information regarding fees and expenses, recent
awards published by the arbitrators, the arbitrator's significant
publications, and the ability of an arbitrator to work on an interest
arbitration case, on an expedited case, the latter of which has stricter
timetables.

Last year alone, we issued nearly 20,000 requests for arbitration
panels. We provided arbitration services to the private and public
sectors. Our arbitrators decided 2669 cases last year, of which 78%
involved private sector disputes. Our arbitrators spent roughly an
average of 1.09 days in hearing and the average dollar amount for an
arbitration case in 2002 ran approximately \$3200. Discharge and
discipline cases remain the most common issue in arbitration and roughly
35% of our fiscal year 2002 cases involved discipline or discharge
issues. Although we do have arbitrators that conduct interest
arbitration proceedings, deciding the terms of a new or reopened
contract, that kind of work only represents 1% of our arbitration work.
99% involves issues of pure contractual interpretation. We also have a
significant federal sector practice. In fiscal year 2002, roughly 10% of
our cases involved federal sector labor disputes.

We are required, under Title II of the Labor-Management Reporting Act,
to improve the quality and availability of our arbitration services. And
as a result, our arbitrators attend annual symposia in Cleveland,
Philadelphia, Chicago or Seattle, where they discuss and share the
latest information about their profession. These events are well
attended by the arbitrators who practice in these cities and surrounding
areas.

The agency also has an Arbitration Focus Group to review changes in
arbitration services, policies and procedures. The group includes
representatives of management and labor and members and non-members of
the National Academy of Arbitrators. It was this focus group that
recommended some our newest and innovative procedures to improve
arbitration services.

Some of those changes incorporate technology to make the process more
efficient.

For instance, the public now has the ability to request arbitration
panels on-line and receive them via e-mail or fax in less than one hour
after the request is processed. When you request a panel on line, your
fee is \$30, \$20 less than it is if you file the request by mail. Since
we instituted the on line service in May 2000, we have issued nearly
1400 panels through the Agency's website, and many to repeat customers
who find the electronic service easy and fast.

We also clarified special requirements for panels. Customers are now
able to select from geographical areas closer to the site of the
dispute, which reduces the travel costs incurred by the parties. You can
ask for a panel of arbitrators whose principle address is within 125
miles of the site of the dispute. The closer the arbitrator is to the
site of the dispute, the greater savings on travel expenditures. If an
arbitrator is unable to travel to distant states to hear a case, they
can omit up to seven states from their designated work region, which
takes the arbitrator 'out of the running' when the agency selects a
panel for that area. This has substantially reduced the delay is
selecting an arbitrator that is able to handle that party's dispute.

We have recently become relatively strict regarding the timeliness of
arbitration awards. Part 1401.14 of the Policies and Procedures actually
states, and I quote: "Arbitrators shall make awards no later than 60
days from the date of the closing of the record as determined by the
arbitrator, unless otherwise agreed upon by the parties or specified by
the collective bargaining agreement or law." We have taken this
provision one step further. If we can confirm that an arbitrator has one
late award for a discharge case, he/she is made unavailable and that
arbitrator's name will not be placed on a panel. So, if you are late on
even one discharge case, we no longer make you available for future work
until the awards are rendered. Similarly, if an arbitrator has two
awards for other than discharge cases, he/she is made unavailable for a
panel.  Where the parties request an expedited arbitration, we issue the
panel information very quickly, the arbitrator contacts the parties
within 7 days, and schedules a hearing date within 30 days. An award in
an expedited case is due 7 days after the close of the hearing. Either
in a regularly scheduled arbitration or expedited case, if that award is
late, the arbitrator's name will not be released for a panel until the
award is received. Clearly, this ensures timely awards in the most
severe cases and the public has welcomed this change as long overdue.

We have also recognized that the issues arising in arbitration are
diverse and we now maintain "Issue" and "Industry" listings that
encompass some of the new issues we see raised in arbitration. Some of
the new issues include conduct (off duty and personal), safety/health
conditions, and violence or threats. For the future, when a party seeks
an arbitrator with particular expertise in a specific area, there will
be greater ability for the Agency to answer the needs of the public and
provide arbitrators with experience in that particular area. This
particular area is where we are seeing a significant change. We are
seeing a marked increase in the number of panels where the parties are
seeking what we call "special requirements," which includes experience
in a particular industry or excluding arbitrators because they are
presently handling cases for the parties. These requests take time to
process and can only be processed by the staff because of the many
variables to make the selections.

We recently redesigned our arbitrator biographical information system to
provide more detailed information on the arbitrator. Arbitrators can now
list their awards, thus giving the parties research information on the
arbitrator and his/her rulings. Many of our arbitrators have written
extensively on the arbitration process and subjects covered in
arbitration. They can now list those literary works on their bios.

For the future, we plan even greater technological advancement that
allows us to track the issues that are important to the public and that
seems to pervade panel requests. Our technological systems will continue
to advance so that we can maintain a good database of information on
arbitrator's specific capabilities and also maintain continued accuracy
of the arbitrators' biographies. We have, and will continue, to use e
mail as a means of communication with the public and in the next year or
so, hope to have e mail contact information and communicate as much as
possible through that mode. Many of the arbitrators and parties now do
most of the scheduling of hearings via e-mail. This prevents one of the
most principal complaints we receive: *ex parte* communications.

One of the questions we are frequently asked is the difference between
FMCS arbitration services and other arbitration services, such as the
AAA. There are benefits of our system both to arbitrators and to the
parties. For the arbitrators, they prefer the manner in which the FMCS
randomly selects arbitrators and prefer our system over the AAA. In our
system, we supply the parties with a panel, or a selection of
arbitrators that meets the needs of the requesting parties, for
instance, the geographical location of the arbitrator, his or her
knowledge of a particular subject matter, or awards covering a
particular issue. So, the parties get to pick the arbitrator they want
from a list of those that meet their criteria. AAA actually picks the
panel members, where we do not -- our system randomly selects
arbitrators based on the criteria submitted by the parties, where AAA
actually selects the arbitrators for the panel deliberately -- there is
no randomness to their system. It is the random system that renders ours
more equitable. Arbitrators also prefer the FMCS system because we are
more than willing to tell the arbitrators on our roster how many times
their name was randomly selected and how many times they were selected
by the parties as the arbitrator of choice. The AAA does not and will
not disclose information on how many times an arbitrator was selected
over others, or even how many times their names appear on a panel. So
arbitrators have no ability, through AAA's system, to discern whether
there was equity in the process of selecting panels. At the FMCS, we
tell the arbitrators on our roster how often they were placed on a panel
and how often they were selected.

For arbitrators there are costs to being on our roster and on AAA's
roster. But ours is cheaper by far. The AAA charges an arbitrator \$250
to appear on their roster. Our cost is \$100.

For outside parties requiring arbitration services, the greatest benefit
of FMCS arbitration services is the cost factor. If you file a request
on line, it costs you \$30. If you request a panel in hard copy its
\$50. For the same fee, we will, upon your request, select an arbitrator
for you, instead of giving you a panel for your selection. If you go to
the AAA, its \$250 for a panel, or for AAA to select an arbitrator on
the parties' behalf, a significantly greater cost than the FMCS panel
system. There is also the benefit of communication between the
arbitrator and the parties in the FMCS system. Our own arbitrators make
arrangements directly with the parties regarding the location of the
hearing, and dates for the hearing. The AAA actually acts as a "go
between" and shuttles this information back and forth between the
parties and the arbitrator. Frankly, this can waste quite a bit of time.
It is certainly much more efficient for the arbitrator to deal directly
with the parties, in a joint conference call, or in a one on one
telephone communication that does not violate ex-parte principles, so
that hearing dates and locations can be easily arranged without the use
of a third entity.

One of the benefits of a small agency like the FMCS is its ability to
join departments and have them collaborate together on important agency
missions. The FMCS has an Institute for Conflict Management which is an
integral part of the arbitration program. For those of you who don't
know about the Institute, it as extremely valuable training program. The
Institute is basically a traveling training school that provides
training in arbitration, mediation, conflict resolution, and
specifically designed and tailored training to meet the needs of any
particular group. The Institute will travel with its instructors to
provide a course. This year, the Institute conducted four arbitrator
training courses with faculty from the National Academy of Arbitrators.
The courses we offered this year included "Becoming a Labor Arbitrator."
This course was specifically designed to increase the professionalism
and expertise of arbitrators entering the Roster and it improves and
enhances the skills of practicing arbitrators. Also, the course
substitutes for the five awards if an applicant has the requisite
experience in collective bargaining. The course itself reviews
substantive and procedural case-handling issues and using hypothetical
situations in an interactive format. Participants particularly enjoy
mock arbitration raising discipline and contract interpretation issues.
We teach the participants how to conduct an arbitration hearing, how you
frame the issues, the best way to deal with witnesses and particularly
difficult witnesses, how to effectively rule on evidentiary matters and
how to craft a well written opinion. We also spend a significant amount
of time covering ethical issues that are very relevant to arbitration.

The "Arbitration for Advocates" course trains advocates and is an
excellent training course for representatives of labor and management
alike, who find themselves presenting and arguing cases before an
arbitrator. The course has been attended by both lawyers and
non-lawyers. We train you how to give an effective opening statement,
the best way for you to present your witnesses in a particular order,
how to examine and cross examine witnesses, how to give a convincing
closing argument and how to advocate your position in a post hearing
brief.

> All of the Institute's courses are offered in different parts of the
> country, and often twice a year.

One of the interesting things we try to do is pair up new arbitrators
with experienced ones. It's almost like a mentoring program to assist
our new arbitrators so that they have an experienced ear to talk to when
they get started.

We recently launched one of our newest programs which may be of interest
to many of you - it's called the Access to Neutrals Initiative. Let me
explain a bit about the history behind this new program.

A few years ago, we recognized that there would be an increasing number
of employment related disputes, like EEO cases, where the FMCS might not
be able to assign a mediator to attend to that dispute. As a result, we
explored methods for referring employment-related disputes to private
neutrals. But, as a federal agency, we were uncomfortable with referring
the dispute to a neutral whose work we were not familiar with. When we
began looking into this possibility, it was referred to as the
Credentialing Initiative. After conducting several National Focus Groups
and consulting an internal focus group, FMCS determined a Registry of
Neutrals would be more useful. We looked into a registry program, where
we would allow neutrals to apply for placement on the registry. We would
control who is allowed onto the registry based on certain criteria.

Part of the duties of the National Focus Groups was to establish the
criteria and develop all the elements of this program. We convened with
academicians, practitioners, alternate dispute experts, and FMCS
commissioners and managers, to determine how a registry of neutrals
could be established and utilized. After a few years, we've finally
devised criteria for selection, procedures for selection, and procedures
to request or select a neutral from our roster. The program was approved
by OMB earlier last month and the program is now published in the
Federal Register for public comment.

Essentially, neutrals who wish to be placed on the registry must submit
education and experience background information. Consistent with FMCS
policy on arbitrators, individuals who are included on the Registry of
Neutrals cannot be engaging in work as an advocate in the area of labor
relations. For inclusion on the Registry, neutrals will have to agree to
abide by the informational, ethical and continuing education
requirements established by FMCS, and to participate in a consumer
complaint process.

The criteria for selection will be based on a flexible point system. A
minimum of ten points must be awarded for an applicant to be included on
the registry. Points will be awarded for ADR experience. The point
system is heavily weighted towards experience as a third party neutral
in any dispute proceeding used in lieu of adjudication to resolve issues
in controversy. This can include, but is not limited to, settlement
negotiations, conciliation, mediation or fact finding. Arbitration was
excluded from the definition of ADR because we view arbitration as
requiring a different skill set than a neutral or third party
conciliator and because we have a separate Roster of Arbitrators. Many
arbitrators view their roles as adjudicatory in nature, not that
dissimilar from a judge.

However, the neutrals program specifically seeks individuals with
ability to focus on the needs of the parties, regardless of whether one
party is "right" or the other "wrong," or whether a particular contract
provision was violated. Instead, the neutrals program emphasizes dispute
resolution skills which require a different set of techniques than those
utilized by the majority of arbitrators. Some arbitrators, and perhaps
some of your with mediation ADR experience, are comfortable using
settlement techniques that focus on the parties interests to encourage
dispute resolution. Some arbitrators prefer the purely adjudicatory role
of arbitration. The neutrals program emphasizes dispute resolution
skills, a different set of skills than those used in arbitration, and
requires different techniques. Those of you with mediation experience,
or with experience in alternate dispute resolution field, facilitation,
fact finding or interest based bargaining, should consider inquiring
into the neutrals program.

Applicants will receive a certain number of points depending on how many
ADR cases you the applicant has had handled in employment-related areas.
FMCS will also consider the complexity of the issues involved, and the
number of parties and/or participants involved in the case. Points will
also be awarded for education in the ADR field, such as completion of
coursework in ADR. Finally, points will be awarded for education in the
area of workplace dispute resolution and experience in resolving
workplace disputes as an advocate.

As with the arbitration services department, the FMCS Institute is an
integral part of this initiative and will develop classes and programs
to satisfy the ADR educational requirements for initial inclusion on the
registry and continuing education classes required to remain on the
registry. However, you are not required to take the Institute courses
and can register for courses at other academic institutions to satisfy
the continuing education element of the program.

There is a \$250 initial application fee for your name to appear on the
registry. The yearly fee to be charged for maintaining a neutrals name
on the registry has not yet been established; it will be set based on
the number of neutrals placed on the registry; the greater number of
eligible individuals appearing on the registry, the smaller the fee
structure.

As I indicated earlier, and consistent with our arbitration program,
there will be a customer complaint process in place to evaluate the
concerns of the public. Everyone on the registry will be required to
take continuing educational courses, either through the Institute or
through other academic institutions. There will be an
ethics/professional responsibility course required, but the ethics
materials will be available on line and will not require classroom time.

Unfortunately for all you, you could have avoided this entire speech by
logging onto the FMCS' website, which provides all of the information I
gave you, and then some, regarding the arbitration program, the neutrals
program and the Institute coursework. The site is extremely user
friendly and provides a wealth of information about arbitration
services, the Institute, and the agency's programs overall. I encourage
each of you to log onto our website at
[www.fmcs.gov](http://www.FMCS.gov/). There are e mail links to the
director of arbitration services, the director for the access to
neutrals program, and the director of the Institute, and if you have any
questions, e mail them directly and you will receive a prompt reply. In
addition to the website, I brought some additional printed material for
your convenience.

Any questions??