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**RESPONDING TO CHANGE IN THE WORKPLACE:**

INNOVATIONS IN LABOR-MANAGEMENT-GOVERNMENT COOPERATION

## A LEAP OF FAITH

> **Labor Management Cooperation at the Philadelphia Zoo**

####### 1992- 2000

# United States of America

June 25 -- 26, 2001 Mexico City, Mexico

## A LEAP OF FAITH

> **[Labor Management Cooperation at the Philadelphia Zoo]{.underline}**
>
> 1992- 2000

**[BACKGROUND]{.underline}**

The Zoological Society of Philadelphia (the Zoo) was established in 1859
for the education and recreation of the people of Philadelphia. The Zoo
opened its gates to the public in 1874 and is one of the major
attractions in the City of Philadelphia and the Northeast region of the
United States. Each year over 1.2 million people enjoy visiting the Zoo.

The Zoological Garden is situated on 42 acres (104 hectares) of parkland
in a highly

urbanized area of Philadelphia. The animal collection numbers over 1,700
specimens and the botanical collection over 38,000 specimens.

# THE ZOO'S GOVERNANCE 

The Board of Directors of the Zoo is comprised of approximately thirty
members who come from business, government, foundations, and private
individuals who support the Zoo's mission and programs. The Zoo is a
private sector employer largely funded by gate revenue from membership
and visitors. The Zoo has an annual operating budget of \$22 million.
The City of Philadelphia and the State of Pennsylvania provide some
capital support, but have no input into its management.

Since 1968, the Unionized employees of the Zoo have been represented by
Local 752 of the American Federation of State, County and Municipal
Employees (AFSCME). AFSCME is the largest public sector Union in the
U.S. and a major force in the U.S. labor movement with over 1.3 million
members. Local 752 is part of AFSCME District Council 47, a diverse
group of nine local Unions representing more than twenty-five public and
private sector bargaining units including the professional employees of
the City of Philadelphia. Local 752 has ninety-two members. This
represents approximately fifty percent of the full time staff.

**[HISTORY OF LABOR/ MANAGEMENT RELATIONSHIP]{.underline}**

The relationship between the Zoo and the Union has frequently, but not
always been stable. Only one strike has occurred in the history of the
collective bargaining relationship since 1968.

In 1992, after the death of the Zoo's President who was highly
successful and popular during his twelve year tenure, the Zoo's Board of
Directors appointed an interim President for one year to serve until the
search for a new President could be conducted.

For approximately ten years the Zoo and Local 752 jointly administered a
Health and Welfare fund (the Fund), which designated that operations to
be handled by the Union operated and the monetary contributions to come
from the Zoo. The Fund provided medical, dental, prescription, vision,
and life insurance and disability benefits. The day-to-day operations of
the Fund were handled by the business agent for the Union, who was on a
paid leave of absence from the Zoo. In 1992, the Zoo made contributions
to the Fund in the amount of \$7,500 per member per year. The average
workers annual salary was about \$25,000. The amount paid into the Fund
was substantially greater than the actual costs of the benefits
purchased for employees and the operating costs of maintaining the Fund.
Consequently, the Zoo's interim President requested an accounting of the
Zoo's payments into the Fund and the expenditures of the Fund. When no
satisfactory accounting was forth coming, the Zoo suspended payments to
the Fund and made payments directly to the insurance carriers who
underwrote the benefits. There was no loss or lapse in any benefits to
any member/employee. The Union filed a grievance protesting the
suspension of payments to the Fund. Ultimately, the Zoo and Union agreed
to conduct a special audit of the Fund. They established the parameters
of the audit and hired an auditor acceptable to both parties. The
results of this audit revealed numerous financial and administrative
irregularities and breaches of fiduciary responsibilities. Based on this
analysis, the Union and leadership of District Council 47 asked the
International Union to also audit the Health and Welfare Fund. As a
result, Local 752 was placed under administratorship, which is an
indication of the extent and range of seriousness of this situation.

#  

a.  **The Health & Welfare Fund**

In January 1993, the Board completed its search for a President and
Chief Executive Officer (CEO) when they announced the appointment of
Alexander L. (Pete) Hoskins as its new President. Hoskins appointment
occurred shortly before the imposition of the administratorship upon the
Union.

As the former Fairmount Park Commissioner and subsequently, the Streets
Commissioner of the City of Philadelphia, the new President brought a
wealth of experience in labor relations as well as an established
relationship with District Council 47. In early 1994, the Zoo and the
Union reached an agreement to terminate the Health and Welfare Fund. The
Zoo would purchase insurance at its own cost in order to provide
employees with the same benefits and coverage provided under the Fund.
Labor and Management then formed a new Health and Welfare Committee. The
purpose of the Committee was to assure continuation of existing benefit
levels and to seek the most cost-effective provider.[^1]

b.  **Successful Collective Bargaining Negotiations**

> In the Spring of 1996, Labor and Management began negotiations for a
> successor

Collective Bargaining Agreement (CBA). The expiring agreement had been
in effect since 1991, during which time the leadership of both the Zoo
and Local 752 had changed. There were numerous and often thorny issues
at the bargaining table. Despite these difficult issues, Labor and
Management reached an agreement before the June 30Th expiration date and
without the assistance of a mediator or an arbitrator. The new contract
was unanimously ratified by the Union membership.

Almost immediately, the relationship that had produced the new three
year contract, (1996-1999), began to deteriorate rapidly. Many disputes
arose concerning the changes Management was making in procedures and
work schedules in the Maintenance Department and over enforcing the
contract provisions related to Steward activity. In addition, some of
the contractual language itself was in dispute. Mutual distrust
increased daily. The Union filed record numbers of grievances and
arbitration demands. Both Labor and Management filed Unfair Labor
Practice (ULP) charges, in violation of the National Labor Relations Act
of 1935. The situation became intolerable for Management when the Union
issued a letter to its members informing them of the possibility of
sanctions if members provided information to Management, which led to
discipline of a union member. With the increase in grievances,
Management also began strictly enforcing the contract provisions
covering Steward activity. The Union interpreted Management's
enforcement as forbidding Union Officials from speaking to members or
each other during work hours.

Local Union Officers met with Council President Tom Cronin and Council
Representative Howard Deck, to request their help. The District Council
and Union came to the conclusion that a neutral third party was
essential to improve the Labor-Management relationship. Within days of
that meeting, District Council Officers Tom Cronin, and Howard Deck,
were at the Zoo and unexpectedly encountered Zoo President, Pete
Hoskins. At this chance meeting, the Union Officials aired their
concerns and made suggestions to mutually seek third party help. Zoo
President Hoskins was amenable and the parties agreed to consult a local
arbitrator whom both Labor and Management had known and respected. This
arbitrator recommended that Labor and Management consider FMCS (Federal
Mediation and Conciliation Services), as well as two local consulting
organizations specializing in improving labor-management relations.

The Zoo President recommended that the Union select the third party
after consideration of the three choices, as all the parties were
acceptable to the Zoo. The Union selected FMCS and Commissioner Lichtman
as the third-party mediator since she was already well known to both
Labor and Management from her experience and reputation. When Labor and
Management separately met with Commissioner Lichtman, she discussed
their concerns and outlined the programs that FMCS could utilize to
assist labor/management in repairing and restructuring their
relationship. Commissioner Lichtman recommended the Relationship by
Objectives Program (RBO) designed by the FMCS.

# Implementation of a Relationship-by-Objectives (RBO) Program for the Parties

An RBO is an intensive program designed to improve severely strained
labor-management relationships and provide the first step toward joint
cooperative decision making. It provides brainstorming, consensus,
information sharing, listening skills, and effective communication
skills towards reaching that end. The training program is an organized
structure in which labor-management establishes goals and agrees to work
toward meeting them.

In February 1998, the RBO Program took place at a retreat and resulted
in a joint statement, which was signed by all the participants. At the
end of the retreat, the Management relaxed on enforcing the contract
language covering Steward communications in an attempt to demonstrate "a
leap of faith" regarding the relationship between labor and management.
The Union maintained that the program was not going to work if there was
no possibility of improving communications. The Union believed that the
sanctions, which Management looked upon as merely enforcing contract
language, were too strict or unreasonable. This only further escalated
the level of suspicion between the parties, and resulted in the
perception that Union Executive Board Officials were being reprimanded
and/or disciplined for communicating via walkie-talkie radio during
working hours. To the Union, these radio communications were for the
purposes of labor-management conflict resolution, which they are
legitimately entitled to. Although radio communications and phone calls
may seem relatively insignificant in the larger scheme of relations,
this became a focal point for discussion and it took a "leap of faith"
on the part of Zoo Management to relax their position on this issue.
This action by Management was tremendously helpful because it signaled
to Labor that Management was willing to allow reasonable communication
to resume. This had been considered by Labor to be the greatest factor
contributing to misunderstandings and lack of communications. Upon
returning from the retreat, this "leap of faith" had such a positive
impact on the working environment and allowed the Union to believe in
(or "buy-into") the possibility of success through the negotiation
process. For Labor Leadership this began the change from distrust to a
more cooperative approach with Management.[^2]

After the retreat, a joint statement was shared with the Zoo community,
including the Board of Directors. Skepticism remained among Labor and
Management staff, but the participants in the RBO program were not
discouraged. The retreat had established a belief in the validity of the
process and possibility of change through the RBO technique. The RBO
Program provides a tangible structure for beginning relationship
improvement. All involved felt that they did not want to be part of
failure to that commitment and structure. Labor and Management
recognized that their decision to continue with the process made then
responsible for the success or failure of the RBO Process and this
elevated the level of commitment by Labor and Management to succeed in
fulfilling their common goals.

Another outcome of the RBO retreat of 1998, which we mentioned before,
was the agreement between the Zoo's Vice President for Human Resources
and the Union Leadership, to utilize FMCS's grievance mediation services
to attempt to eliminate some of the grievance backlog. Grievance
mediations is a term adopted to explain the process of interest-based
approach in solving labor-management disputes that arise from
allegations of a breach of the collective bargaining agreement. This
type of a dispute is called a "grievance" in the U.S. labor lexicon.
While grievance mediation has been used as an alternative to
arbitration, it does not preclude the right to proceed to arbitration if
the issue is not resolved through the mediation. Arbitration can
typically cost in excess of \$10,000 per case, which would include
arbitrator's fees, legal fees, as well as, costs of loss of work for
participants. Grievance mediation costs less by eliminating the
arbitrator's fees.

The grievance mediation initiative was even more successful than the
parties had anticipated. Ninety percent of the old grievances were
resolved through mediation and the Zoo agreed to withdraw two unfair
labor practice (ULP) charges that they had filed with the National Labor
Relations Board (NLRB), against the Union. This resulted in considerable
savings of tens of thousands of dollars for both parties because it
resolved the claims and eliminated the need for expensive adjudication
through arbitration. The parties have used the grievance mediation
service on subsequent occasions. In 1999, when a renewal collective
bargaining agreement was negotiated, the parties added mediation as an
optional mutually agreeable step to the contractual grievance procedure.

Before Labor and Management left the retreat, they established an
**RBO** **Steering Committee** consisting of two Union members, two
managers and an **Executive Steering Committee** consisting of the Zoo
President, the District Council Representative and Commissioner
Lichtman. The parties intended that these two committees continue the
process, supervise, and monitor progress toward achieving the twenty
objectives that labor and management identified at the retreat. These
objectives were framed to enhance goals of communication, productivity,
training, etc.

Meanwhile back at the Zoo, labor and management were challenged to
recruit other staff willing to commit themselves to the objectives of
Labor-Management Cooperation that were identified through the RBO
retreat: that is the communications, productivity and training necessary
for everyone. This was not always easy, especially when people realized
the amount of time and effort required.

The RBO made both labor and management recognize the need for training
in techniques beyond the RBO method and consequently the following
events took place:

1.  FMCS conducted a two-day training session for supervisors and Union
    stewards.

2.  FMCS provided training in interest based bargaining (IBB) to both
    management and labor. The IBB process was used throughout the 1999
    contract negotiations facilitated by FMCS.

3.  There was an additional third-party intervention by FMC to assist in
    problem solving in certain specific areas.

Commissioner Lichtman was involved with the mediations, interest based
discussions, and some issues were resolved. This entailed lunchtime
roundtable discussions opened to all employees. In addition, valuable
work was put forth to update and revise performance evaluations.

A new protocol for grievance problem solving was developed and included
in the new July 1, 1999 labor contract. (See Appendix A) In January
1999, the parties met again for a one-year follow-up retreat to review
their accomplishments and take stock of where they needed to improve
their relationship. This follow-up is part of the standard RBO design
for groups that show success after their first year. The parties were
all pleased that improvements had been made.

**II.** **[Results and Outcomes of FMCS Supervised Management-Labor
Negotiations]{.underline}**

-   **Improved Relations among the Parties.** Despite some initial
    trepidation of the parties in the IBB method of negotiation, a
    certain level of trust remains, which was established through the
    RBO process. To the credit of each side, accomplishments have
    continued through successful grievance mediations, round-table
    discussions, and some work in other disputed areas. The improved
    relationship has continued through personnel changes, as each side
    recognizes the need to preserve this atmosphere for future
    negotiations.

-   **Successful Contract Negotiations.** The contract negotiated in
    1996 expired on June 30, 1999, the day before the new Primate
    exhibit was scheduled to open at the Zoo. This facility replaced a
    previous one, which had burned in 1995 and tragically, left most of
    the primate collections dead from smoke inhalation. While the Union
    could have used the opening of the Primate Reserve as leverage in
    the negotiations, it chose to stick to the IBB process and resolve
    some serious and complicated issues that confronted the negotiators.
    For the first time, Union and Management were able to articulate
    common goals: to protect the welfare of the animal collection, the
    employees and guests of the Zoo, as their highest priority.

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-   **Foundation for Future Relations.** The commitment is still present
    but Labor and Management are currently in a transition period that
    will have to work itself through. In one year a new collective
    bargaining agreement is to be negotiated and the parties clearly
    face a challenge. FMCS has committed itself to work with the Zoo and
    AFSCME through this period to assist them

> .

-   **Celebrated Success.** The Joint Executive and Steering Committee
    has shared its successes by making presentations to the local
    Industrial Relations Research Association (IRRA) chapter and to the
    FMCS Washington staff during their Professional Development Seminar
    in the Fall of 2000.

**Footnotes to History of Events: Related observations from Commission
Lichtman**

Commissioner Lichtman found the parties to be extremely enthusiastic
about the RBO Program. Immediately, upon return from the retreat in
early 1998, the parties jointly worked tirelessly to bring the culture
to the entire Zoo. The opening of the new Primate Reserve was an
extraordinary event, given the history of its rebirth. The tremendous
energies from all that led up to its opening and coinciding with the
renegotiations of the collective bargaining agreement in 1999 peaked
through that June. It was natural for all to need a rest. The summer is
also the Zoo's high season.

In the fall and early winter of 1999-2000, there were staff changes at
the Zoo that proved to be key to this process. One of the Management
Steering Committee members left. A Chief Operating Officer was hired who
did not have the benefit of the RBO or IBB training nor the history with
the Zoo, and who replaced the President on the Executive Committee. The
Local Union President, who had received the RBO training, was on leave
from the Zoo during the formative period immediately following the RBO
retreat and, returned as the parties were beginning the 1999
negotiations. He had not participated in the IBB training conducted by
FMCS for the labor and management in preparation for contract
negotiations. Although the Animal Department at the Zoo seemed to have
benefited significantly from the RBO process, that was not necessarily
the case in all departments. For example, the Maintenance Department has
had its share of conflicts throughout this process.

In addition, the upcoming Union election began to take on a presence.
There was an atmosphere of limbo and this mediator was waiting for the
regrouping to take place, the election outcome to be known and an
opportunity to revitalize a somewhat stalled process. Accomplishments
did continue, such as mediating grievances, round-table discussions and
some work in the Elephant House but the energy had clearly subsided. The
Union election for officers and Executive Board members took place in
January. In addition to the principal office of President, many other
changes were made. Most recently, the Union began an organizing drive of
the Zoo's part-time and seasonal workforce.

The changes and flows of the process continue to confirm that
relationships are fragile. Changes, no matter what they are, or where
they take place have an impact. Labor and Management must constantly
re-evaluate and check that they are living up to their commitments as
well as their interests. Communication is key and can never afford to
break down. The good news is the Steering Committee and the
Executive/Steering Committee continues to meet on a regular basis.
Moreover, the Steering Committee recently took up the challenge of
examining and perhaps redefining their mission and purpose.

[^1]: The Local and the Zoo shall form a new Health and Welfare
    Committee, consisting of three members each designated by the Local
    and by the Zoo. It shall be the purpose of the committee to assure
    continuation of existing benefit levels and to seek the most
    cost-effective provider. The Local and the Zoo authorize the Health
    and Welfare Committee to agree to the purchase of insurance through
    carriers other than those referred to in paragraph 3 above, provided
    that a majority of the committee so agrees. The Committee shall also
    be charged with developing a "wellness" program for the benefit of
    employees and in the interest of health care cost containment.

[^2]: For a more detailed account of the methods and techniques adopted
    in the retreat, please read RBO Program Booklet.