TABLE OF CONTENTS

**PAGE NO**.

I. INTRODUCTION

# A. Agency Mission.........................................................................4

# B. FMCS Services..........................................................................4

1\. Collective Bargaining Mediation -- Initial and

Successor Contract
Negotiations....................................................4

2\. Grievance
Mediation...............................................................\...5

3\. Relationship Development and Training
Programs............................\...5

4\. Arbitration
Services..................................................................5

5\. Grants
Program.....................................................................\...6

6\. FMCS
Institute........................................................................6

> 7\. Employment
> Mediation..............................................................7

8\. International Training and Exchange
..............................................7

# C. Nature of Collective Bargaining in FY 2004.......................................7

> 1\. The Grocery
> Industry..............................................................8
>
> 2\.
> Communications....................................................................9
>
> 3\. Hotel
> Industry......................................................................
> 9
>
> 4\. Other Significant
> Cases...........................................................10

# D. GPRA Goals Achieved in FY 2004................................................10

E. Other
Initiatives........................................................................11

1\. Strategic Plan 11

2\. Customer Survey 12

3\. Access to Neutrals 13

4\. Dynamic Adaptive Dispute Systems 13

5\. Training on Health Care 14

6\. National Labor Management Conference 14

II\. COLLECTIVE BARGAINING
MEDIATION..........................................16

A. Collective Bargaining Mediation Program
Data..................................16

III\. INITIAL CONTRACT
NEGOTIATIONS...............................................18

A. Initial Contract Negotiations and
Processes......................................18

B. Initial Contract Bargaining
Data...................................................18

IV\. RELATIONSHIP DEVELOPMENT AND TRAINING PROGRAMS...........\....18

A. Relationship Development and Training
Programs................................18.

B. Program
Data............................................................................19

V. ARBITRATION
SERVICES................................................................20

A. Arbitration
Services....................................................................
20

B. Arbitration Program
Data............................................................. 21

VI\.
GRANTS.....................................................................................
24

A. Grants
Program.....................................................................\....
24

B. FY 2003 Grant Funding
Summary................................................\... 24

VII\. FMCS
INSTITUTE........................................................................
26

A. Course Offering

VIII\. FEDERAL EMPLOYMENT
MEDIATION...........................................26

IX\. INTERNATIONAL TRAINING AND EXCHANGE PROGRAMS.................27

X.
SUMMARY...................................................................................29

![](media/image1.png){width="1.7527777777777778in"
height="1.4048611111111111in"} ![](media/image2.png)

This report details the activities of this agency in fiscal year 2004.

Today, technology is advancing at an accelerated rate, re-defining the
business world, creating new industries and rendering others obsolete.
The duration of labor contracts is lengthening, unions and corporations
are merging and consolidating, and health care costs continue to rise.
As tens of thousands of jobs move overseas because of economic
globalization, free trade has engendered a new set of international
competitors for U.S. companies.

Collective bargaining in fiscal year 2004 was plagued by rising health
care costs. I personally mediated the Southern California supermarket
strike, the longest in the history of the industry, lasting more than 4
months. It was only one of many cases federal mediators handled where
health care had become a source of strife for the parties. Approximately
55% of our cases this year involved health care as a major issue during
bargaining.

Our field mediators were involved in 4748 collective bargaining disputes
nationwide. In 79% of those cases, FMCS assisted the parties in
achieving collective bargaining settlements. In addition, our mediators
continue to train the labor-management community on methods designed to
improve labor-management relations. FMCS provided relationship
development and training programs 2281 times during this fiscal year.
Our employment mediation services to federal, state and local
governments continue in wide demand as more agencies have turned to FMCS
for alternatives to courtroom litigation.

The American workplace is changing and the Federal Mediation and
Conciliation Service will change with it so that we can continue to
provide state-of-the-art assistance to employers and employees as they
confront the challenges of modern labor-management relations.

Peter Hurtgen, Director

**I. INTRODUCTION**

**A. Agency Mission**

> For fifty-seven years, the Federal Mediation and Conciliation Service
> (FMCS) has carried out its mission of preserving and promoting
> labor-management peace. The FMCS was created by Congress as an
> independent agency by the Labor-Management Relations Act of 1947.
> Highly trained mediators provide conflict resolution services to our
> nation's employers and their unionized employees with the goal of
> preventing or minimizing interruptions to the free flow of commerce
> growing out of labor disputes and improving labor-management
> relations. The core activity of the Service is collective bargaining
> mediation. It is a voluntary process in which mediators serve as
> third-party neutrals to facilitate the settlement of issues in the
> negotiation of collective bargaining agreements.
>
> **B. FMCS Services**
>
> In carrying out its mission, the FMCS provides the following services
> to the public:
>
> 1\. Collective Bargaining Mediation -- Initial and Successor Contracts
>
> 2\. Relationship Development and Training Programs
>
> 3\. Arbitration Services
>
> 4\. Grants Promoting Labor-Management Cooperation
>
> 5\. Training for Labor and Management by the FMCS Institute for
> Conflict Management
>
> 6\. Employment Mediation
>
> 7\. Training and Exchange Programs for International Organizations and
> Government
>
> **[1. Collective Bargaining Mediation: Initial and Successor Contract
> Negotiations]{.underline}**
>
> The Agency provides collective bargaining mediation for initial
> contract negotiations, which take place between an employer and a
> newly certified or recognized union representing its employees, and
> for negotiations for successor collective bargaining agreements.
> Mediation services are provided not only to the private sector, but
> also to the public sector, including federal agencies, and state and
> local governments. Mediators have no authority to impose settlements;
> their only tool is the power of persuasion. Through collective
> bargaining mediation, FMCS helps avert or minimize the impact of work
> stoppages on the U.S. economy.
>
> In FY 2004, FMCS mediators were actively involved in 4748 collective
> bargaining contract negotiations in every major industry and service
> throughout the United States. Although this represents a decrease from
> years past, the decrease is primarily because the agency determined
> that collective bargaining mediation cases should be counted
> separately from grievance mediation cases. Counting grievance
> mediation cases separately from collective bargaining resulted in a
> reduction in our case load numbers for collective bargaining
> mediation.

For data regarding collective bargaining mediation in successor
contracts and initial contract negotiations, see Sections II and III.

**[2. Grievance Mediation]{.underline}**

Grievance mediation involves the use of a neutral party to mediate
grievances arising during the life of a contract. This service is
provided to the private and public sectors. Of all contracts reached in
FY 2004, 17% were of more than 3 years duration. Longer contract terms
raise the specter of increased grievances. Left unresolved, the
grievances become sources of contention between the parties. We have
seen an increase in grievance mediation over the last three years. In FY
2004 there was another increase in grievance mediation activity from
1407 in FY 2003 to 1544 in FY 2004.

**[3. Relationship Development and Training Programs]{.underline}**

Although our primary focus continues to be resolution of conflict as it
arises, prevention of conflict at the outset is also an important goal.
Since its inception, FMCS has offered relationship-building training
programs designed to improve the labor-management relationship and to
develop approaches toward collective bargaining that prevent friction or
disputes from arising. These kinds of training programs improve the
quality of the parties' relationship and make mediation more effective.
When such training is requested, a mediator determines the parties'
needs and designs a program that is specifically tailored for those
parties. FMCS offers a wide array of services to address workplace
problems and in fiscal year 2004, this work represented 18 percent of
agency activity.

Seventeen percent of contracts reached in FY 2004 exceed 3 years in
duration. The lengthening of contracts has created a demand for training
programs that emphasize the importance of collaborative working
relationships during the term of the contract.

In addition to our training programs, field mediators continuously
participate in outreach activities by lecturing at universities,
seminars and conferences. They also meet with local leaders in the
collective bargaining community. Through this outreach activity, the
labor-management community and the general public gain an understanding
of mediation, arbitration, collective bargaining, and the agency's
services.

For data regarding relationship development and training, see Section
IV.

**[4. Arbitration Services]{.underline}**

National labor policy allows for the settlement of contractual disputes
by arbitration. When conflicts arise over the interpretation or
implementation of a contract provision, FMCS assists through voluntary
arbitration. A professional arbitrator, acting in a quasi-judicial
capacity, hears arguments, weighs evidence and renders a decision to
settle the dispute, usually binding on both parties. On request, FMCS
Arbitration Services provides the disputing parties with a "panel" of
qualified, private labor arbitrators from which they select the
arbitrator to hear their case. The panels are drawn from an FMCS
computerized nationwide roster of 1400 labor arbitrators. To join the
FMCS roster, arbitrators must be approved by an Arbitration Review
Board, which meets quarterly to consider new applicants. There is also
an "arbitration user focus group" that reviews and makes recommendations
to the FMCS Director on changes in arbitration service, policies and
procedures. The FMCS holds annual Arbitrator Symposia where arbitrators
have an opportunity to discuss and share the latest information about
their profession.

For FY 2004 data regarding arbitration services, see Section V.

**[5. Grants Program]{.underline}**

> The 1978 Labor-Management Cooperation Act authorizes and directs the
> Service to encourage and support joint labor-management committees
> "established for the purpose of improving labor management
> relationships, job security and organizational effectiveness,
> enhancing economic development or involving workers in decisions
> affecting their jobs including improving communication with respect to
> subjects of mutual interest and concern.\"[^1] Congress funds this
> initiative in the Agency's annual appropriations, and grants are
> distributed to encourage labor-management committees to develop
> innovative joint approaches to workplace problems. In the past,
> committees have focused their efforts on improving labor-management
> relationships, job security, organizational effectiveness, economic
> development, health care cost containment solutions, competitiveness
> of a region's hotel industry, economic development, and public sector
> management. All committees must present measurable results of their
> efforts for grant funding. The rules, regulations and instructions for
> preparing grant applications are published annually in the *Federal
> Register*.

For FY 2004 data regarding the grants program, see Section VI.

**[6. FMCS Institute]{.underline}**

The FMCS Institute for Conflict Management provides training and
education to labor and management practitioners in a classroom format.
Institute classroom training, provided away from the workplace,
maximizes communication among all the participants. The Institute offers
training in practical conflict resolution skills, collective bargaining,
arbitrator and arbitration skills-building, facilitation process skills,
multi-party facilitation, cultural diversity, equal employment
opportunity mediation skills, and workplace violence prevention. The
Institute runs as a reimbursable program and is funded by fees received
for delivery of training.

For data regarding the FMCS Institute course offerings for this fiscal
year, see Section VII.

**[7. Employment Mediation]{.underline}**

Outside the collective bargaining arena, FMCS provides employment
mediation services to the federal sector and to state and local
governments. These mediation services include resolution of
employment-related disputes. The Administrative Dispute Resolution Act
of 1990, the Negotiated Rulemaking Act of 1990, and the Administrative
Dispute Resolution Act of 1996 expanded FMCS's role as a provider of
these services. The legislative design was to expand the use of
alternative dispute resolution throughout the federal government, reduce
litigation costs, and promote better government decision-making. FMCS
provides consultation, training, dispute resolution systems design and
facilitation services to many federal, state and local agencies.
Employment mediation is also provided to the private sector to resolve
workplace disputes falling outside of the traditional collective
bargaining context, i.e., equal employment opportunity disputes.

For data regarding employment mediation services in FY 2004, see Section
VIII.

**[8. International Training and Exchange]{.underline}**

Beyond the nation's borders, FMCS plays an important role in promoting
collective bargaining and conflict resolution in other countries. Our
international work is a small, but integral part of our services.
Emerging democracies often struggle to compete effectively in a globally
integrated marketplace. Part of their struggle includes the
implementation of an effective labor relations system. Other nations and
foreign organizations have sought our assistance in designing systems
that resolve and prevent industrial conflict where a formal system has
not been developed to manage it. International training programs are
also a knowledge-sharing experience: FMCS mediators are "cross-trained"
as they gain familiarity with complex issues affecting the global
economy. As a result, the FMCS is more effective in assisting labor and
management in resolving disputes with international implications.

For data regarding employment mediation and international programs this
fiscal year, see Section IX.

**C. [Nature of Collective Bargaining in FY 2004]{.underline}**

Bargaining in fiscal year 2004 was plagued by the continued increase in
health insurance costs. In FY 2004, 55 percent of contract negotiations
involved health care as an issue during bargaining. In 2004, major
contracts expired in the telecommunications, aerospace, retail food
industries and manufacturing. While the strikes in Southern California
groceries, SBC Communications, and the hotel industry remained in the
public eye, during the fiscal year mediators were actively involved in
4748 collective bargaining contract negotiations in every major industry
and service throughout the United States. With our assistance, 3768
contracts were reached. As a result, 79% of FMCS's collective bargaining
cases resulted in negotiated settlements. There were 273 work stoppages
in FY 2004.

[]{.mark}

[]{.mark}

[]{.mark}

**[1. The Grocery Industry]{.underline}**

[]{.mark}

Health care was the most significant issue during the grocery industry
contract negotiations. The FMCS was instrumental in resolving the
longest work stoppage in history of the grocery industry, which occurred
in Southern California. Roughly 60,000 employees of Vons, Safeway,
Ralphs, Kroger and Albertsons, struck or were locked out on October 11,
2003. The work stoppage went on for 20 weeks and affected 859 stores.
Industry experts reported that the strike and lockout cost the affected
grocery stores 2 billion dollars in lost sales. The tense situation
garnered significant local and national press coverage, and the FMCS
received thousands of calls from strikers, asking for Agency help. The
Governor of California remained in touch with the Agency on the progress
of negotiations. The parties were deadlocked over the cost and scope of
health benefits and a proposal for a two tier wage system for future
employees. The employers were particularly concerned about their ability
to compete with large discount chains such as Wal-Mart. The Director
personally mediated negotiations during the last 16 days of the strike
and lockout, and a settlement was achieved, finally ending the dispute
after 141 days.

The Southern California grocery strike was just one of many tense
contract negotiations that plagued the grocery industry during this
fiscal year. Before the high profile Southern California supermarket
strike began, 3300 employees at 44 Kroger stores in West Virginia, Ohio
and Kentucky went on strike. FMCS commenced mediation prior to the
strike and continued its presence during the 59 day strike. Regular
updates on the status of bargaining were requested by the Governors of
each state. Once again, health care was at the core of the strike. FMCS
field leadership brought the strike to a close. The economic and social
impact on the parties and the public was significant: Kroger did not
operate their stores during the strike and consumers in some areas had
to travel 30 miles to purchase food.

[]{.mark}

While negotiations were ongoing in Southern California, other
supermarkets commenced contract talks with their unions. Forty-thousand
employees of Stop and Shop on the East Coast (Rhode Island, Connecticut
and Massachusetts) threatened to strike. The strike was narrowly averted
just hours before the unions planned to vote on a walkout. The strike
would have been seen as an extension of the contentious dispute in
Southern California, and many believed it came close to becoming a
nationwide strike affecting all grocery retailers.

Kroger contracts in Texas, covering 10,800 members were reached with the
assistance of an FMCS mediator who encouraged the parties to extend
their contract daily as the talks progressed.

FMCS assisted the parties in contract negotiations between Albertsons,
King Scoopers, and Safeway and UFCW in the Denver area. Approximately
17,000 employees at stores in Colorado and Wyoming were affected. FMCS
field managers encouraged the exchange of information on health care
proposals and the parties agreed to observe a "cooling off" period while
documents were reviewed. Despite urging by the Governor of Colorado to
reach an agreement, the employees voted to strike. The employer hired
replacement workers. As of this writing, negotiations continue in
Denver, mediated by FMCS.

**[2. Communications]{.underline}**

Health care for current employees and retirees became a primary issue
during SBC Communications' contract negotiations with the Communication
Workers of America (CWA) and the International Brotherhood of Electrical
Workers (IBEW). Early intervention in contract negotiations by the FMCS
assisted the parties in narrowing the issues. The Director mediated the
main table negotiations, and the union agreed to provide a 30-day
advance notice prior to a strike. Talks proceeded for three months.
Although the union struck for a four day period, our early intervention
likely prevented a lengthier strike by 100,000 employees in 13 states.

Lucent Communications employs 3200 employees represented by IBEW and
CWA. For the first time, both parties consented in September 2004 to
mediator assistance for talks that began the following month, and the
Director commenced main table negotiations in Washington, D.C., where
the primary issue is health care costs for retirees. The parties reached
agreement, with the help of FMCS, on November 9, 2004.

**[3. Hotel Industry]{.underline}**

Hotel workers in San Francisco, Los Angeles, Atlantic City (N.J.) and
Washington D.C. had contracts expiring in FY 2004. UNITE HERE represents
7000 employees in San Francisco, 3000 in Los Angeles, 5000 in Washington
D.C, and 17,000 in Atlantic City. The Director mediated the San
Francisco and Los Angeles talks, while other mediators handled the
Atlantic City negotiations. Strike authorization votes were taken in San
Francisco, Los Angeles, Atlantic City and Washington D.C. Prominent
union officials joined the talks in D.C., and the Los Angeles and San
Francisco situations were heightened when protesters were arrested after
blocking an intersection and engaging in a wildcat strike, nearly
causing a lock out.

The primary issue, for all bargaining units, was contract duration. The
union sought a two-year pact that would expire in 2006 along with
contracts in several other large cities, giving the union national
negotiating clout. A secondary, but equally important issue, included
health care costs. In every city involved, the employers filed unfair
labor practice charges against the unions asserting bad faith bargaining
over the insistence of a 2 year contract.

In late September 2004, four hotels struck in San Francisco and the
remaining 10 hotels responded with a defensive lockout. Eventually, all
14 hotels in San Francisco extended the lockout. During the strike, the
Mayor of San Francisco met with the mediator and the Lieutenant Governor
of California met with strikers on the picket line. The San Francisco
Board of Supervisors scheduled a hearing to consider the impact of the
work stoppage on the city. In the meantime, 10,000 Atlantic City NJ
hotels and casinos struck, and the union staged "sit-ins" on major
roadways requiring the police to remove them. The Atlantic City NJ
hotels resolved their contract dispute in late October 2004. As of this
writing, the lockout at of the San Francisco hotel workers ended, and
the parties are working directly with FMCS leadership in crafting a
mediated solution.

**[4. Other Significant Cases]{.underline}**

In Chicago, Illinois, a strike by 3300 garbage collectors employed by 16
private waste hauling firms affected city high-rises and business
districts and 36 suburbs. Over a half million people did not have
garbage collected for 9 days. The strike shut down transfer stations and
dumping sites, leaving no place to haul the garbage, even if there were
truck drivers available to remove it. According to press reports, the
lack of garbage collection posed such a serious health threat that Cook
County considered seeking a court injunction forcing the employees back
to work. With FMCS intervention, the strike was settled.

Cook County Hospital in Illinois faced a looming strike with its 1800
nurses. The hospital has 20 different facilities, and a strike among
nurses could severely cripple the county's health care system.
Negotiations had been ongoing for 17 months, the union authorized a
strike, but with the intervention of the agency's local regional
director, the parties reached agreement.

About 1500 Maytag employees, represented by the United Automobile
Workers, struck for three weeks. Maytag is the third largest appliance
manufacturer in the country. FMCS field managers assisted the parties in
reaching agreement, where the primary issue was health-care and pension
benefits. The strike had a significant impact on the local economy of
Newton, Iowa, where 10% of the population of 15,579 are employed by
Maytag and were on strike.

[]{.mark}

**[D. GPRA Achievements]{.underline}**

The Government Performance and Results Act (GPRA) requires all federal
agencies to identify performance goals. For every service provided, we
identified specific goals for fiscal year 2004 and the chart below
identifies our performance during this fiscal year:

[]{.mark}

+-----------------------+-----------------------+-----------------------+
| **Service**           | **Goals/Objectives**  | **Actual              |
|                       |                       | Performance**         |
+=======================+=======================+=======================+
| []{.mark}             | []{.mark}             | []{.mark}             |
+-----------------------+-----------------------+-----------------------+
| **Collective          | 1\. Active in 35%     | 1\. Active in 26% of  |
| Bargaining            | assigned cases[^2]    | all assigned cases.   |
| Mediation**           |                       |                       |
|                       | 2\. 75% settlement    | 2\. 79% settlement    |
|                       | rate                  | rate                  |
+-----------------------+-----------------------+-----------------------+
| **Arbitration         | 1\. Provide 19,021    | 2\. 18,033            |
| Services**            | panels                |                       |
|                       |                       | 2\. 7.31 average days |
|                       | 2\. Average number of | between receipt of    |
|                       | days between receipt  | request and panel     |
|                       | of request and panel  | provided.             |
|                       | provided should not   |                       |
|                       | exceed 5 workdays     |                       |
+-----------------------+-----------------------+-----------------------+
| []{.mark}             | []{.mark}             | []{.mark}             |
+-----------------------+-----------------------+-----------------------+
| **Employment          | Mediated 950 cases    | Mediated 1596         |
| Mediation (conflict   |                       |                       |
| resolution services   |                       |                       |
| to state, local and   |                       |                       |
| federal government    |                       |                       |
| sectors and private   |                       |                       |
| sector)**             |                       |                       |
+-----------------------+-----------------------+-----------------------+
| **Regulatory          | Facilitate 5          | Facilitated 1         |
| Negotiations**        | regulatory            | regulatory            |
|                       | negotiations          | negotiation           |
+-----------------------+-----------------------+-----------------------+
| **International       | Assist 80 foreign     | Assisted 25 foreign   |
| Efforts**             | governments           | governments           |
+-----------------------+-----------------------+-----------------------+
| **FMCS Institute**    | Provide 12 courses    | Provided 17 courses   |
+-----------------------+-----------------------+-----------------------+
| **Grants Program**    | Provide 13 grants to  | Provided 11 grants to |
|                       | labor-management      | labor management      |
|                       | committees and 6 non  | committees and 3 non  |
|                       | competitive grants    | competitive grants.   |
+-----------------------+-----------------------+-----------------------+
| **Regional            | Conduct 80            | Conducted 80          |
| Labor-Management      | Agency-sponsored      | Agency-sponsored      |
| Conferences**         | conferences at        | conferences at        |
|                       | regional level        | regional level        |
+-----------------------+-----------------------+-----------------------+

[]{.mark}

In addition to the above chart, it should be noted that the Agency
continues its success rate in collective bargaining mediation cases. In
this fiscal year, FMCS settled 79% of collective bargaining mediation
cases. Regarding our activity rate (the percentage of cases in which the
parties consented to mediation), over the next few years, we will work
to improve it through outreach to labor and management about the
benefits and advantages of the mediation process.

**[E. New Initiatives]{.underline}**

**[1. Strategic Plan]{.underline}**

The Agency's five-year strategic plan includes the following strategic
goals:

1.  Minimizing the number and severity of work stoppages influencing
    interstate commerce, national security, and/or the U.S. health care
    industry;

2.  Increasing the number of collective bargaining partners with an
    ongoing commitment to improving their relationship;

3.  Facilitating a commitment to, and development of, systems for
    handling workplace disputes arising outside of the collective
    bargaining context, by labor and management at a significant number
    of organizations;

4.  Assisting labor and management to effectively deal with major issues
    that drive conflict in the evolving workplace, including health
    care, technology, effects of globalization, and diversity;

> 5\. Effectively managing and sharing knowledge gained from the
> Agency's experience in workplace conflict resolution with schools,
> courts, and international/overseas organizations; and

6\. Expanding Agency participation in federal sector employment dispute
resolution.

To view the Agency's strategic plan in full, visit the Web site at
[www.FMCS.gov](http://www.FMCS.gov/).

**[2. Customer Survey]{.underline}**

Every three years, the Agency conducts a survey of the public it serves
to gauge the trends in labor-management relations and collective
bargaining, and the public's satisfaction with the Agency's work. The
survey, conducted by the Massachusetts Institute of Technology, gathered
1718 responses from cases closed in fiscal years 2001 through FY 2003.
Some of the findings include:

-   Labor-management relationships have become more adversarial than in
    1997, when the first survey was conducted.

-   The difference in views between management and labor respondents has
    increased on several issues, such as the quality of their
    relationship, whether and how quickly that relationship is changing,
    and their support for interest-based bargaining.

-   The pace of introduction of workplace innovations through collective
    bargaining has slowed.

-   The number of parties that report engagement in joint
    labor-management partnerships has declined.

-   There continues to be a positive relationship between
    problem-solving approaches to bargaining and innovative contract
    language.

-   Less contentious relations were found among the public-sector
    relationships examined.

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-   In half of the cases (51 percent) involving mediation, the parties
    indicated that a strike or lockout would have been likely in the
    absence of mediation. This suggests that the national strike rate
    could be as high as 6 percent rather than the current 4 percent in
    the absence of FMCS mediation services.

-   Knowledge of mediation and related FMCS services is nearly
    universal.

-   While both parties rate their satisfaction with FMCS services very
    highly, management representatives tend to be less satisfied than
    labor representatives.

-   The parties' ratings of FMCS mediators' knowledge, skills, and
    trustworthiness are very high, and their ratings of the mediators'
    knowledge of industry-specific issues has risen.

-   Union respondents say FMCS is more important than do their
    management counterparts, though both agree that FMCS should have a
    higher public profile.

-   Other FMCS services, such as training and arbitration panels, were
    all rated highly by those who had used them. Most respondents urged
    the agency to increase public awareness of these and other services.

To view the full Executive Summary of the survey, visit our Web site. Go
to

[http://fmcs.gov/assets/files/Public%20Affairs/FMCS_Third_NPRS_Report_Executive_Summary.PDF](http://fmcs.gov/assets/files/Public Affairs/FMCS_Third_NPRS_Report_Executive_Summary.PDF).

For the charts accompanying the survey, go to

[http://fmcs.gov/assets/files/Public%20Affairs/fmcs_nlm_conferencev4.ppt](http://fmcs.gov/assets/files/Public Affairs/fmcs_nlm_conferencev4.ppt)

**[3. Access to Neutrals Program]{.underline}**

Due to budget constraints, the Agency terminated the Access to Neutrals
program. For more information, contact the Director of Public Affairs,
John Arnold, at <JArnold@fmcs.gov>.

**[4. Dynamic Adaptive Dispute Systems]{.underline}**

Workplace conflicts falling outside of the collective bargaining
agreement are proliferating, and new approaches are needed to address
them. FMCS, by virtue of its neutral role and experience in the
organized workplace, is well positioned to assist labor and management
in developing dispute resolution systems responsive to new trends in the
workplace.

In traditional labor-management relationships, the grievance process is
utilized to resolve conflicts over contract interpretation. However,
there are numerous workplace complaints, ranging from statutory claims
of discrimination to personality conflicts, not typically resolved in
the collective bargaining arena. Those matters can turn into protracted
disputes, costly and time-consuming lawsuits, and poisoned
relationships, with a devastating impact on employee morale. New,
alternative processes are called for to resolve individual employment
disputes that threaten competitiveness, efficiency, productivity and
morale.

The FMCS developed an initiative called "DyADS." DyADS is an acronym for
**Dy**namic **A**daptive **D**ispute **S**ystems. It is a dispute
resolution system designed by the parties themselves, with FMCS
facilitation and support, to handle all kinds of conflicts other than
matters that fall within the scope of the collective bargaining
agreement.

The word "dyad" signifies two components working together as a team. In
this case, a DyADS project includes representatives of management and
labor, working collaboratively to design and maintain their own system
for resolution of conflicts arising in their workplace. These conflicts
can range from complex equal employment opportunity claims, to morale
and workplace relationship problems that are damaging to the working
environment. DyADS is not an end run around the grievance-arbitration
provisions of a collective bargaining agreement. It is an inclusive
process that has the parties develop their own system with multiple
options available for resolution of various types of employment
disputes. Any such system must be dynamic, constantly evolving with
labor and management input, and must refrain from interfering with
collective bargaining rights, or the rights of individuals to seek
redress in any statutory scheme.

The DyADS program was piloted in FY 2004 in a large hospital in Akron,
Ohio, and additional pilot projects will be under development in the
next fiscal year. For more information about our DyADS program, e-mail
General Counsel Arthur Pearlstein at <APearlstein@FMCS.gov>.

**[5. Health Care Training Initiative]{.underline}**

In FY 2004, 55% of contract negotiations focused on the rising cost
health care benefits. More than any other single issue in recent memory,
the rising cost of health care benefits has the potential to produce
strikes and lockouts and paralyze strategic industries vital for the
nation's economy.

To assist both labor and management in addressing this critical issue in
upcoming collective bargaining and to lessen the threat of disruptive
work stoppages, the FMCS developed a new training initiative to provide
FMCS mediators with critical information about the U.S. health care
system and benefits options. The training focuses on the health care
system, service and delivery issues, quality of care concerns and the
drivers of higher benefits costs. It also provides FMCS mediators with
cost-cutting options that can be explored by labor and management
negotiators. A distinguished panel of trainers including representatives
of Tenet HealthCare, the American Federation of Teachers, Blue Cross
Blue Shield Association, and the American Academy of Family Physicians
assisted the Agency in the training. This in-depth training also
examined best practices in health care bargaining. The primary objective
of the training is to provide mediators the knowledge they need in this
complex area to assist the parties during the collective bargaining
process and beyond.

This project spawned considerable interest in the labor-management
community. High level AFL-CIO officials attended one of the training
sessions. During the next calendar year, the FMCS will use this material
to train representatives of labor and management around the country on
negotiating health care issues more effectively. The Agency is also
planning "Blue Ribbon" roundtable discussion on health care bargaining
for senior officials from the labor movement and top management
representatives from major national corporations.

For more information about the FMCS Health Care Training Initiative,
contact Director of Public Affairs, John Arnold, at <JArnold@FMCS.gov>.

**[6. National Labor Management Conference]{.underline}**

FMCS hosted the biennial National Labor Management Conference in Chicago
in June 2004. More than 1400 representatives of labor and management
attended. The Director opened the conference by challenging the audience
to improve labor management relations through increased dialogue and
cooperative efforts that improve the system of collective bargaining.
Workshops were held on a variety of topics, including specific sessions
on health care, aerospace, construction, and arbitration.

**[II. COLLECTIVE BARGAINING MEDIATION]{.underline}**

**[A. Collective Bargaining Mediation Data]{.underline}**

**[NOTE TO READERS]{.underline}: The statistics in this table aggregate
collective bargaining cases with grievance mediation cases. The agency's
OMB and Congressional submissions break down many of the statistics
below into two categories; collective bargaining mediation and grievance
mediation. For more information, please contact Ariella Bernstein,
<abernstein@fmcs.gov>. In future years, the annual reports will break
down case data by separately reporting grievance mediation and
collective bargaining mediation statistics.**

  ----------------------------- ---------- ---------- ---------- ---------- ----------
  Intake                                                                    

  Fiscal Years 2000 Through     **2000**   **2001**   **2002**   **2003**   **2004**
  2004                                                                      

  Union and Employer Notices    34,038     33,344     40,677     33,046     21,546
  [^3]                                                                      

  NLRB and FLRA                 1,492      1,446      1,389      1,485      1,226
  Certifications[^4]                                                        

  Public Sector Board           191        152        173        173        142
  Requests[^5]                                                              

  Union and Employer            2,521      2,704      3,100      3.140      3,369
  Requests[^6]                                                              

  Total                         38,242     37,646     45,339     37,844     26,283

                                                                            

  Case Numbers Issued                                                       

  Fiscal Years 2000 Through     **2000**   **2001**   **2002**   **2003**   **2004**
  2004[^7]                                                                  

                                26,323     25,071     25,282     26,774     26,282

  Case Numbers Assigned                                                     

  Fiscal Years 2000 Through     2000       2001       2002       2003       2004
  2004[^8]                                                                  

                                19,574     19,116     19,303     19,516     20,249
  ----------------------------- ---------- ---------- ---------- ---------- ----------

+-----------------------------+-------+-------+-------+-------+-------+
| Cases Closed Fiscal Years   | **2   | **2   | **2   | **2   | **2   |
| 2000                        | 000** | 001** | 002** | 003** | 004** |
|                             |       |       |       |       |       |
| Through 2004 [^9]^3^        |       |       |       |       |       |
+-----------------------------+-------+-------+-------+-------+-------+
| By consolidation after      | 1,125 | 619   | 727   | 728   | 1,394 |
| assignment [^10]^4^         |       |       |       |       |       |
+-----------------------------+-------+-------+-------+-------+-------+
| By Final Report with        | 6,321 | 6,424 | 6,757 | 6,640 | 6,758 |
| meetings [^11]^5^           |       |       |       |       |       |
+-----------------------------+-------+-------+-------+-------+-------+
| By Final Report with no     | 1     | 1     | 1     | 1     | 1     |
| meetings [^12]^6^           | 3,291 | 2,107 | 0,861 | 1,938 | 2,983 |
+-----------------------------+-------+-------+-------+-------+-------+
| Total                       | 2     | 1     | 1     | 1     | 2     |
|                             | 0,737 | 9,150 | 8,345 | 9,306 | 1,135 |
+-----------------------------+-------+-------+-------+-------+-------+
|                             |       |       |       |       |       |
+-----------------------------+-------+-------+-------+-------+-------+
| Collective Bargaining       |       |       |       |       |       |
| Meeting Conferences         |       |       |       |       |       |
+-----------------------------+-------+-------+-------+-------+-------+
| Fiscal Years 2000 Through   | **2   | **2   | **2   | **2   | **2   |
| 2004 [^13]^7^               | 000** | 001** | 002** | 003** | 004** |
+-----------------------------+-------+-------+-------+-------+-------+
|                             | 1     | 1     | 1     | 1     | 1     |
|                             | 7,837 | 7,933 | 7,920 | 7,702 | 8,410 |
+-----------------------------+-------+-------+-------+-------+-------+
|                             |       |       |       |       |       |
+-----------------------------+-------+-------+-------+-------+-------+

  ------------------------------- ---------- -- ---------- -- ---------- -- ---------- -- ----------
  Work Stoppage Information                                                               

  Fiscal Years 2000 Through       **2000**      **2001**      **2002**      **2003**      **2004**
  2004[^14]^8^                                                                            

                                                                                          

  Work stoppages beginning in the                                                         

  fiscal year                     400           432           308           277           269

                                                                                          

  Work stoppages in closed cases                                                          

  in the fiscal year              392           445           327           289           273

                                                                                          

  Average duration of work                                                                
  stoppages                                                                               

  in closed cases (number of      390           40.7          53.7          60.5          76.7
  days)                                                                                   

                                                                                          
  ------------------------------- ---------- -- ---------- -- ---------- -- ---------- -- ----------

  ------------------------------- ---------- ---------- ---------- ---------- ----------
  Contract Mediation Analysis By  **2000**   **2001**   **2002**   **2003**   **2004**
  Sector Fiscal Years 2000                                                    
  Through 2004                                                                

                                                                              

  INTAKE                          38,242     37,646     45,339     37,844     39,760

                                                                              

  CASE NUMBERS ISSUED                                                         

  Private Sector                  24,386     23,135     23,170     24,775     24,290

  Public Sector                   1,216      1,185      1,362      1,366      1,413

  Federal Sector                  720        750        749        632        579

                                                                              

  ASSIGNED                                                                    

  Private Sector                  17,681     17,241     17,266     17,568     18,355

  Public Sector                   1,168      1,139      1,296      1,329      1,315

  Federal Sector                  725        739        741        623        579

                                                                              

  CLOSED CASES [^15]^9^                                                       

  Private Sector                  18,786     17,219     16,331     17,302     19,227

  Public Sector                   1,209      1,150      1,297      1,341      1,329

  Federal Sector                  742        781        717        663        579

                                                                              
  ------------------------------- ---------- ---------- ---------- ---------- ----------

**[III. INITIAL CONTRACT NEGOTIATIONS]{.underline}**

**[A. Initial Contract Negotiations and Processes]{.underline}**

Initial contract negotiations are critical because they are the
foundation for the parties' future labor-management relationship.
Initial contract negotiations are often more difficult than established
successor contract negotiations, since they frequently follow
contentious representation election campaigns.

For the last several years, FMCS has placed special emphasis on
mediation of initial contract negotiations between employers and newly
certified or recognized bargaining units. It is our policy that all
initial contract cases are promptly assigned for mediation, and that
mediators make every effort to become actively involved in assisting the
parties in achieving agreements. To expedite initial contract cases, and
ensure our prompt receipt of certifications after their issuance, FMCS'
National Office receives, via e-mail from the NLRB's headquarters, all
certifications issued within the month. This system is more efficient,
ensures that the Agency receives the certifications no more than one
month after issuance, and allows for intervention as soon as possible.
All initial contract cases remain open for two fiscal years.

**[B. Initial Contract Bargaining Data]{.underline}**

+---------------------------------+------+------+-------+------+-----+
| Initial Contract Bargaining     | **20 | **20 | **2   | **20 | **  |
|                                 | 00** | 01** | 002** | 03** | 200 |
|                                 |      |      |       |      | 4** |
+---------------------------------+------+------+-------+------+-----+
| Private Sector initial contract | 1    | 1    | 1,486 | 1    | 1,  |
| cases received:                 | ,715 | ,745 |       | ,578 | 350 |
+---------------------------------+------+------+-------+------+-----+
| Assigned to mediators:          | 1    | 1    | 1,458 | 1    | 1,  |
|                                 | ,677 | ,702 |       | ,506 | 311 |
+---------------------------------+------+------+-------+------+-----+
| Assigned from NLRB              | 1    | 1    | 1,185 | 1    | 1,  |
| certifications:                 | ,296 | ,282 |       | ,266 | 053 |
+---------------------------------+------+------+-------+------+-----+
| Assigned from other sources:    | 381  | 420  | 273   | 240  | 258 |
|                                 |      |      |       |      |     |
| (e.g. voluntary recognition)    |      |      |       |      |     |
+---------------------------------+------+------+-------+------+-----+
| Cases closed by FMCS:           | 867  | 1    | 1,361 | 1    | 1,  |
|                                 |      | ,892 |       | ,473 | 586 |
| (Mediated and non-mediated)     |      |      |       |      |     |
+---------------------------------+------+------+-------+------+-----+
| Mediated cases closed with      | 231  | 360  | 243   | 190  | 181 |
| agreement reached:              |      |      |       |      |     |
+---------------------------------+------+------+-------+------+-----+
| Percentage of mediated cases    | 52.9 | 55.1 | 50.3  | 47.7 | 4   |
|                                 |      |      |       |      | 5.4 |
+---------------------------------+------+------+-------+------+-----+
| Mediated cases closed without   | 206  | 293  | 240   | 208  | 217 |
| agreement reached:              |      |      |       |      |     |
+---------------------------------+------+------+-------+------+-----+
| Percentage of mediated          | 47.1 | 44.9 | 49.7  | 52.3 | 5   |
| cases[^16]^0^                   |      |      |       |      | 4.5 |
+---------------------------------+------+------+-------+------+-----+
| Non-mediated cases closed with  | 255  | 676  | 538   | 642  | 695 |
| agreement reached:              |      |      |       |      |     |
+---------------------------------+------+------+-------+------+-----+
| Percentage of non-mediated      | 59.3 | 54.6 | 61.3  | 59.7 | 5   |
| cases:                          |      |      |       |      | 8.5 |
+---------------------------------+------+------+-------+------+-----+
| Non-mediated cases closed       | 175  | 561  | 339   | 433  | 493 |
| without agreement reached:      |      |      |       |      |     |
+---------------------------------+------+------+-------+------+-----+
| Percentage of non-mediated      | 40.7 | 45.3 | 38.7  | 40.3 | 4   |
| cases[^17]^1^                   |      |      |       |      | 1.4 |
+---------------------------------+------+------+-------+------+-----+
| Percentage of mediated and      | 56.0 | 54.8 | 57.4  | 56.5 | 5   |
| non-mediated cases closed with  |      |      |       |      | 5.2 |
| agreement reached:              |      |      |       |      |     |
+---------------------------------+------+------+-------+------+-----+
| Closed cases involving          | 128  | 263  | 221   | 193  | 174 |
| ULP[^18]^2^ filed by either     |      |      |       |      |     |
| party:                          |      |      |       |      |     |
+---------------------------------+------+------+-------+------+-----+
| Closed cases involving work     | 24   | 43   | 29    | 20   | 19  |
| stoppages:                      |      |      |       |      |     |
+---------------------------------+------+------+-------+------+-----+
| Closed cases involving work     | 14   | 21   | 20    | 10   | 10  |
| stoppages with agreement        |      |      |       |      |     |
| reached:                        |      |      |       |      |     |
+---------------------------------+------+------+-------+------+-----+
| Average number of days between  | 176  | 85   | 75    | 72   | 88  |
| statutory notice receipt and    |      |      |       |      |     |
| closure:[^19]^3^                |      |      |       |      |     |
+---------------------------------+------+------+-------+------+-----+
| Average number of days for      | 363  | 432  | 396   | 318  | 348 |
| cases carried over and closed   |      |      |       |      |     |
| in next fiscal year:            |      |      |       |      |     |
+---------------------------------+------+------+-------+------+-----+
| Assigned cases carried over to  | 813  | 792  | 784   | 881  | 649 |
| next year:                      |      |      |       |      |     |
+---------------------------------+------+------+-------+------+-----+

**[IV. RELATIONSHIP DEVELOPMENT AND TRAINING PROGRAM]{.underline}**

The role of federal mediators has evolved beyond traditional crisis
intervention during the last few days of collective bargaining
negotiations. More frequently, mediators are involved during the life of
a contract to train both sides in effective bargaining, communications,
joint problem solving and innovative conflict resolution methods.

**C. Relationship Development and Training Data**

[]{.mark}

  --------------------------------- ---------- ---------- ---------- ---------- ----------
  Relationship Development and                                                  
  Training Cases                                                                

  Fiscal Years 2000 through 2004    **2000**   **2001**   **2002**   **2003**   **2004**
  [^20]^4^                                                                      

  Assigned [^21]^5^                 2,782      2,629      2,610      2,574      2,281

  Closed by Final Report [^22]^6^   2,792      2,655      2,618      2,594      2,281

  Private Sector                    NA         NA         NA         NA         1,674

  Federal Sector                    NA         NA         NA         NA         126

  Public Sector                     NA         NA         NA         NA         635
  --------------------------------- ---------- ---------- ---------- ---------- ----------

  --------------------------------- ---------- ---------- ---------- ---------- ----------
  Outreach Cases                                                                

  Fiscal Years 2000 Through 2004    **2000**   **2001**   **2002**   **2003**   **2004**
  [^23]^7^                                                                      

  Assigned                          5,504      5,436      5,800      5,392      4,796

  Closed by Final Report            5,621      5,645      5,881      5,484      4,741
  --------------------------------- ---------- ---------- ---------- ---------- ----------

**[V. ARBITRATION SERVICES]{.underline}**

**[A. Arbitration Services]{.underline}**

In collective bargaining, voluntary arbitration is the preferred method
of settling disputes over contract interpretation or application. Since
its creation, FMCS provided access to voluntary arbitration services.
Rather than using full-time government employees, we maintain a roster
of the nation's most experienced private professional arbitrators who
meet rigid FMCS qualifications. Upon request, FMCS furnishes a panel of
qualified arbitrators from which the parties select a mutually
satisfactory individual to hear and render a final and binding decision
on the issue or issues in dispute. A roster of over 1400 private
arbitrators, knowledgeable practitioners with backgrounds in collective
bargaining and labor-management relations is maintained by the FMCS.
FMCS charges a nominal fee for the provision of arbitrator lists and
panels.

The FMCS computerized retrieval system produces a random panel of
potential arbitrators from which the parties may select. Panels also can
be compiled on the basis of geographic location, professional
affiliation, occupation, experience with particular industries or
issues, or other criteria when specified by the parties. FMCS also
furnishes current biographical sketches of arbitrators for parties to
establish their own permanent panels.

> To join the FMCS Roster, arbitrators must be approved by an
> Arbitration Review Board, which meets quarterly to consider new
> applicants for appointment to the roster by the FMCS Director. There
> is also an "arbitration user focus group," which reviews and makes
> recommendations to the FMCS Director on changes in Arbitration Service
> policies and procedures.

**[C. Arbitration Services Program Data]{.underline}**

  ------------------------------- ---------- ---------- ---------- ---------- ----------
  **Activity**                    **2000**   **2001**   **2002**   **2003**   **2004**

                                                                              

  Panel Requests                  16,976     16,594     17,282     17,332     16,382

  Panels Issued [^24]^8^          19,485     18,275     18,891     19,039     18,033

  Arbitrators Appointed           9,561      8,706      8,335      8,595      7,875

                                                                              
  ------------------------------- ---------- ---------- ---------- ---------- ----------

  ------------------------------- ---------- ---------- ---------- ---------- ----------
  **Activity Charged For**        **2000**   **2001**   **2002**   **2003**   **2004**

  Travel Days                     .51        .43        .45        .48        .45

  Hearing Days                    1.18       1.15       1.09       1.15       1.09

  Study Days                      2.58       2.40       2.44       2.35       2.37

  **Total**                       **4.27**   **3.98**   **3.98**   **3.98**   **3.91**
  ------------------------------- ---------- ---------- ---------- ---------- ----------

  ------------------------------- ------------- ------------- ------------- ------------- -------------
  **Charges**                     **2000**      **2001**      **2002**      **2003**      **2004**

  Per Diem Rate                   672.12        693.12        720.75        763.87        801.59

  Amount of Fee                   2863.49       2761.04       2884.46       3047.54       3197.37

  Amount of Expenses              321.67        341.92        318.03        364.32        344.25

  **Total Charged**               **3185.16**   **3102.96**   **3202.49**   **3411.86**   **3541.62**
  ------------------------------- ------------- ------------- ------------- ------------- -------------

+-------------------------------+-------+-------+-------+-------+-------+
| ########                      | **2   | **2   | **2   | **2   | **2   |
|                               | 000** | 001** | 002** | 003** | 004** |
+-------------------------------+-------+-------+-------+-------+-------+
| ######                        | **2,  | **1,  | **1,  | **2,  | **2,  |
| ## **Total Number of Issues** | 723** | 902** | 989** | 314** | 581** |
+-------------------------------+-------+-------+-------+-------+-------+
| ***Specific Issues***         |       |       |       |       |       |
+-------------------------------+-------+-------+-------+-------+-------+
| **General Issues**            | **    | **    | **    | **    | **    |
|                               | 585** | 434** | 463** | 506** | 417** |
+-------------------------------+-------+-------+-------+-------+-------+
| Overtime Other Than Pay[^25]  |       |       |       |       |       |
+-------------------------------+-------+-------+-------+-------+-------+
| Distribution of Overtime      | 48    | 34    | 26    | 35    | 41    |
+-------------------------------+-------+-------+-------+-------+-------+
| Compulsory Overtime           | 12    | 8     | 12    | 9     | 3     |
+-------------------------------+-------+-------+-------+-------+-------+
| Other Overtime                | 18    | 10    | 10    | 12    | 1     |
+-------------------------------+-------+-------+-------+-------+-------+
| **Seniority**                 |       |       |       |       |       |
+-------------------------------+-------+-------+-------+-------+-------+
| Promotion & Upgrading         | 86    | 54    | 52    | 63    | 42    |
+-------------------------------+-------+-------+-------+-------+-------+
| Layoff Bumping & Recall       | 65    | 46    | 48    | 71    | 69    |
+-------------------------------+-------+-------+-------+-------+-------+
| Transfer                      | 16    | 17    | 21    | 14    | 9     |
+-------------------------------+-------+-------+-------+-------+-------+
| Other Seniority               | 38    | 25    | 25    | 35    | 15    |
+-------------------------------+-------+-------+-------+-------+-------+
| Union Officers[^26]^\*^       | 12    | 9     | 14    | 13    | 21    |
+-------------------------------+-------+-------+-------+-------+-------+
| Strike & Lockout              | 4     | 3     | 2     | 1     | 2     |
+-------------------------------+-------+-------+-------+-------+-------+
| Working Conditions[^27]^\*\*^ | 35    | 35    | 29    | 19    | 20    |
+-------------------------------+-------+-------+-------+-------+-------+
| Discrimination                | 27    | 19    | 24    | 17    | 18    |
+-------------------------------+-------+-------+-------+-------+-------+
| Management Rights             | 75    | 51    | 63    | 71    | 61    |
+-------------------------------+-------+-------+-------+-------+-------+
| Scheduling of Work            | 50    | 43    | 67    | 47    | 61    |
+-------------------------------+-------+-------+-------+-------+-------+
| Work Assignments              | 99    | 80    | 70    | 99    | 54    |
+-------------------------------+-------+-------+-------+-------+-------+
|                               |       |       |       |       |       |
+-------------------------------+-------+-------+-------+-------+-------+
| **Economic Wage Rates & Pay   | **    | **    | **    | **    | **    |
| Issues**                      | 298** | 227** | 229** | 233** | 209** |
+-------------------------------+-------+-------+-------+-------+-------+
| Wage Issues                   | 32    | 29    | 36    | 42    | 95    |
+-------------------------------+-------+-------+-------+-------+-------+
| Rate of Pay                   | 75    | 53    | 60    | 60    | 33    |
+-------------------------------+-------+-------+-------+-------+-------+
| Severance Pay                 | 5     | 6     | 8     | 5     | 1     |
+-------------------------------+-------+-------+-------+-------+-------+
| Reporting, Call‑ in &         | 12    | 13    | 7     | 10    | 6     |
| Call‑back Pay                 |       |       |       |       |       |
+-------------------------------+-------+-------+-------+-------+-------+
| Holidays & Holiday Pay        | 33    | 31    | 26    | 21    | 14    |
+-------------------------------+-------+-------+-------+-------+-------+
| Vacations & Vacation Pay      | 54    | 29    | 39    | 27    | 26    |
+-------------------------------+-------+-------+-------+-------+-------+
| Incentive Rates & Standards   | 25    | 13    | 7     | 15    | 9     |
+-------------------------------+-------+-------+-------+-------+-------+
| Overtime Pay                  | 62    | 53    | 46    | 53    | 25    |
+-------------------------------+-------+-------+-------+-------+-------+
|                               |       |       |       |       |       |
+-------------------------------+-------+-------+-------+-------+-------+
| **Fringe Benefits Issues**    | **    | *     | *     | **    | **    |
|                               | 100** | *69** | *99** | 112** | 104** |
+-------------------------------+-------+-------+-------+-------+-------+
| Health & Welfare              | 58    | 29    | 58    | 61    | 46    |
+-------------------------------+-------+-------+-------+-------+-------+
| Pensions                      | 14    | 11    | 8     | 11    | 8     |
+-------------------------------+-------+-------+-------+-------+-------+
| Other Fringe Issues           | 28    | 29    | 33    | 40    | 50    |
+-------------------------------+-------+-------+-------+-------+-------+
|                               |       |       |       |       |       |
+-------------------------------+-------+-------+-------+-------+-------+
| **Discharge & Disciplinary    | **1   | **    | **    | **1   | **    |
| Issues**                      | 203** | 849** | 947** | 091** | 996** |
+-------------------------------+-------+-------+-------+-------+-------+
|                               |       |       |       |       |       |
+-------------------------------+-------+-------+-------+-------+-------+
| **Technical Issues**          | **    | *     | *     | *     | *     |
|                               | 139** | *81** | *86** | *97** | *69** |
+-------------------------------+-------+-------+-------+-------+-------+
| Job Posting & Bidding         | 52    | 32    | 38    | 43    | 39    |
+-------------------------------+-------+-------+-------+-------+-------+
| Job Evaluation                | 28    | 18    | 11    | 21    | 14    |
+-------------------------------+-------+-------+-------+-------+-------+
| Job Classification            | 59    | 31    | 37    | 33    | 16    |
+-------------------------------+-------+-------+-------+-------+-------+
|                               |       |       |       |       |       |
+-------------------------------+-------+-------+-------+-------+-------+
| **Scope of Agreement**        | *     | *     | *     | *     | *     |
|                               | *74** | *45** | *65** | *53** | *58** |
+-------------------------------+-------+-------+-------+-------+-------+
| Subcontracting                | 48    | 29    | 41    | 36    | 44    |
+-------------------------------+-------+-------+-------+-------+-------+
| Jurisdictional Disputes       | 16    | 8     | 14    | 5     | 7     |
+-------------------------------+-------+-------+-------+-------+-------+
| Foreman, Supervision, etc.    | 5     | 5     | 8     | 9     | 7     |
+-------------------------------+-------+-------+-------+-------+-------+
| Mergers, Consolidations,      | 5     | 3     | 2     | 3     | 0     |
| Accretion, Other Plants       |       |       |       |       |       |
+-------------------------------+-------+-------+-------+-------+-------+

  ------------------------------- --------- --------- --------- --------- --------
  **Arbitrability of Grievances** **193**   **109**   **100**   **139**   **96**

  Procedural                      120       76        60        102       62

  Substantive                     42        14        23        25        18

  Procedural & Substantive        24        19        17        12        16

  Other Arbitrability Questions   7         0         0         0         0

  **Not Elsewhere Classified**    **131**   **88**    **115**   **83**    **97**
  ------------------------------- --------- --------- --------- --------- --------

+-------------------------------+-------+-------+-------+-------+-------+
| **Total Number of Cases**     | **2   | **2   | **2   | **2   | **2   |
|                               | 000** | 001** | 002** | 003** | 004** |
| **State & Region**            |       |       |       |       |       |
+-------------------------------+-------+-------+-------+-------+-------+
|                               |       |       |       |       |       |
+-------------------------------+-------+-------+-------+-------+-------+
| **Mountain**                  | *     | **    | **    | **    | **    |
|                               | *85** | 123** | 115** | 136** | 118** |
+-------------------------------+-------+-------+-------+-------+-------+
| Arizona                       | 15    | 10    | 15    | 20    | 16    |
+-------------------------------+-------+-------+-------+-------+-------+
| Colorado                      | 28    | 40    | 30    | 47    | 30    |
+-------------------------------+-------+-------+-------+-------+-------+
| Idaho                         | 3     | 7     | 5     | 7     | 3     |
+-------------------------------+-------+-------+-------+-------+-------+
| Montana                       | 11    | 16    | 7     | 11    | 16    |
+-------------------------------+-------+-------+-------+-------+-------+
| Nevada                        | 12    | 13    | 31    | 23    | 31    |
+-------------------------------+-------+-------+-------+-------+-------+
| New Mexico                    | 11    | 26    | 19    | 20    | 19    |
+-------------------------------+-------+-------+-------+-------+-------+
| Utah                          | 4     | 5     | 5     | 6     | 2     |
+-------------------------------+-------+-------+-------+-------+-------+
| Wyoming                       | 1     | 6     | 3     | 2     | 1     |
+-------------------------------+-------+-------+-------+-------+-------+

  ------------------------------- --------- --------- --------- --------- ---------
  **Pacific**                     **128**   **140**   **151**   **129**   **132**

  Alaska                          6         13        7         2         7

  California                      59        66        73        67        58

  Hawaii                          2         0         1         3         0

  Oregon                          32        28        31        12        25

  Washington                      29        33        39        45        42

                                                                          

  **Miscellaneous**               **16**    **9**     **13**    **15**    **14**

  Philippines                     0         0         0         0         0

  Puerto Rico                     4         1         2         7         0

  Virgin Islands                  4         4         10        6         14

  Guam                            0         0         0         0         0

  Others                          8         4         1         2         0

                                                                          

  **New England**                 **29**    **45**    **17**    **37**    **28**

  Connecticut                     10        13        0         4         6

  Maine                           2         2         2         4         1

  Massachusetts                   11        12        9         8         11

  New Hampshire                   0         2         1         0         1

  Rhode Island                    0         6         3         8         3

  Vermont                         6         10        2         13        6

                                                                          

  **Middle Atlantic**             **289**   **307**   **246**   **284**   **252**

  New Jersey                      22        30        26        35        23

  New York                        111       121       71        97        80

  Pennsylvania                    156       156       149       152       149

                                                                          

  **South Atlantic**              **349**   **385**   **375**   **457**   **449**

  Delaware                        6         12        3         2         7

  District of Columbia            31        36        35        50        56

  Florida                         92        112       125       124       146

  Georgia                         51        58        41        77        55

  Maryland                        35        29        49        48        55

  North Carolina                  21        29        29        37        31

  South Carolina                  15        14        14        21        19

  Virginia                        56        30        43        53        42

  West Virginia                   42        65        36        45        38

                                                                          

  **East North Central**          **866**   **715**   **950**   **796**   **841**

  Illinois                        191       145       216       199       198

  Indiana                         67        63        84        55        83

  Michigan                        190       194       158       171       172

  Ohio                            338       224       413       274       330

  Wisconsin                       80        89        79        97        58

                                                                          

  **West North Central**          **316**   **314**   **273**   **347**   **250**

  Iowa                            61        68        51        67        36

  Kansas                          32        38        28        39        23

  Minnesota                       90        84        82        71        70

  Missouri                        101       94        89        121       103

  Nebraska                        17        19        12        17        5

  North Dakota                    5         8         4         23        11

  South Dakota                    10        3         7         9         2
  ------------------------------- --------- --------- --------- --------- ---------

  ------------------------------- ----------- ----------- ----------- ----------- -----------
  **East South Central**          **236**     **239**     **221**     **224**     **229**

  Alabama                         53          57          51          49          66

  Kentucky                        70          81          66          71          57

  Mississippi                     17          32          20          24          18

  Tennessee                       96          69          84          80          88

                                                                                  

  **West South Central**          **227**     **237**     **308**     **321**     **266**

  Arkansas                        35          40          53          53          44

  Louisiana                       28          23          43          40          38

  Oklahoma                        68          70          104         79          50

  Texas                           96          104         108         149         134

  **Totals**                      **2,507**   **2,514**   **2,669**   **2,746**   **2,581**
  ------------------------------- ----------- ----------- ----------- ----------- -----------

**[VI. GRANTS PROGRAM]{.underline}**

**[A. Grants]{.underline}**

> FMCS is authorized by the Labor-Management Cooperation Act of 1978 to
> award grants to support and encourage joint labor-management
> cooperative activities that "improve the labor-management
> relationship, job security and organizational effectiveness." Congress
> funds FMCS Grants Program each year in the agency's appropriation

In fiscal year 2004, FMCS received 65 grant applications. We awarded 11
new competitive grants at a cost of \$1.044 million, and 3
non-competitive grants. An independent FMCS Grants Review Board, chaired
by the Director of Labor-Management Grants, does preliminary scoring of
each application. Final selection is made by the Director.

**[B. Fiscal Year 2003 Grant Funding Summary]{.underline}**

# **[AREA]{.underline}**

[Alabama State Partnership (Montgomery, AL)]{.underline}

**04-AL/A-005**

\$124,375 Explore the needs of existing industries within the state

[Montgomery County Labor Management Committee (Plymouth Meeting,
PA)]{.underline}

**04-PA/A-007**

\$123,738 Improve economic conditions and opportunities for residents,
employers and employees in Montgomery County, Pennsylvania

**[PLANT]{.underline}**

[[S]{.smallcaps}anta Rosa Memorial Hospital (Santa Rosa,
CA)]{.underline}

**04-CA/P-009**

\$65,000 Address and engage communication, conflict, and stress-related
issues not susceptible to resolution within the collective bargaining
process

[Trinity Services (Joliet, IL)]{.underline}

**04-IL/P-004**

\$65,000 Reduce turnover at Trinity Services through creation of
promotional opportunities

[Milwaukee Cylinder (Cudahy, WI)]{.underline}

**04-WI/P-013**

\$39,600 Improve the work processes, grow the business and save and
create jobs

**[PUBLIC SECTOR]{.underline}**

[Ohio Public Sector Labor Management Health Care Benefits
Committee(Columbus, OH)]{.underline}

**04-OH/PS-006**

\$75,000 Develop, implement and evaluate an instructional model for
establishing and maintaining effective local labor-management health
care benefits committees in public sector

[Charlotte County Public Schools (Charlotte County, FL)]{.underline}

**04-FL/PS-003**

\$94,200 Improve student performance through Labor Management
Partnership

[Center for Collaborative Solutions (Sacramento, CA)]{.underline}

**04-CA/PS-008**

\$107,211 Develop an overall strategy and create specific plans to
reduce health costs in public schools

**[INDUSTRY]{.underline}**

[Metropolitan Detroit Plumbing and Mechanical Contractors
Association(Detroit, MI)]{.underline}

**04-MI/I-010**

\$125,000 Recognition of interdependence through formation of a Labor
Management Committee

[CAUSE (Lanham, MD)]{.underline}

**04-MD/I-011**

\$125,000 Address recruitment problems in the mechanical industry

[IBEW Great Lakes Training Trust (Waukesha, WI)]{.underline}

**04-WI/I-012**

\$100,026 Develop and implement computer simulated training to decrease
equipment operator skills shortage and improve safety in the utility
construction industry.

**[VII. FMCS INSTITUTE]{.underline}**

**[A. Purpose and Course Offering]{.underline}s**

# 

Education and training in labor relations and conflict resolution are an
integral part of the Agency's mission for more than half a century. The
Institute's primary mission is to offer training and education to labor
and management practitioners in a classroom format that is structured,
accessible, and convenient to individuals and small groups than the
site‑based relationship development and training programs.

In fiscal year 2004, the Institute offered 17 classes, covering the
following topics:

-   Mediation Skills for the Workplace

-   Labor-Management Negotiations Skills

-   Mediation Skills

-   Workplace Violence Prevention and Response

-   Becoming a Labor Arbitrator

-   Arbitration for Advocates

Fees received for delivery of training services fund the Institute. All
fees collected will be utilized to recover expenses and administrative
costs of the Institute. Training fees charged to customers are set at a
level that allows the Institute to provide a professionally delivered
product from one year to the next.

**[VIII. EMPLOYMENT MEDIATION]{.underline}**

### [A. Services Provided]{.underline} 

Although the agency provides employment mediation services to the
private sector, efforts are concentrated on Federal sector employment
mediation.[^28] Section 173(f) of the statute provides:

> The Service may make its services available to Federal agencies to aid
> in the resolution of disputes under the provisions of subchapter IV of
> chapter V title 5. Functions performed...**may include assisting
> parties to disputes related to administrative programs, training
> persons in skills and procedures employed in alternative means of
> dispute resolution, and furnishing officers and employees of the
> Service to act as neutrals**. Only officers and employees who are
> qualified in accordance with Section 573 of title 5 may be assigned to
> act as neutrals.

The chart below represents FMCS' most significant employment mediation
cases in the Federal sector.

  -----------------------------------------------------------------------
  **Federal Agency**           **Purpose of FMCS        **Number of Cases
                               Involvement**            Handled**
  ---------------------------- ------------------------ -----------------
  Internal Revenue Service     Workplace and EEO        158
                               complaints               

  Department of Homeland       EEO complaints           57
  Security, Immigration and                             
  Customs Enforcement                                   

  United States Postal Service Non bargaining unit      848
                               disciplinary cases and   
                               adverse action appeals   
                               and MSPB claims and      
                               REDRESS combined         

  Equal Employment Opportunity Internal and external    114
  Commission                   EEOC cases               

  Health and Human Services,   Age discrimination cases 185
  Office of Civil Rights       under ADA of 1975        

  Federal Bureau of            EEO complaints           36
  Investigation                                         
  -----------------------------------------------------------------------

[**IX.** **International Training and Exchange**]{.underline}

The International Training and Exchange department provides technical
assistance and training to friendly foreign governments seeking to
improve their labor relations systems.

In 2004, State Department representatives asked the FMCS to join them in
a mission to South Africa, Swaziland, Botswana and Mozambique. The
Director met with government, business and union leaders in each country
and promoted core labor standards in training sessions for foreign
staffers at U.S. embassies. This fiscal year, the Director also advised
acceding European Union countries on strengthening governmental labor
mediation services and the importance of governmental mediation services
to a nation's economic health. These international missions play an
important role in promoting collective bargaining and conflict
resolution in other countries where formal systems for conflict
prevention have not yet been developed.

In addition, in FY 2004, FMCS conducted the following programs, with
sponsorships from the organizations identified below:

+--------------+---------------------------------------+--------------+
| **Country**  | **Purpose of the Program**            | **Sponsoring |
|              |                                       | Agency**     |
+--------------+---------------------------------------+--------------+
| Colombia     | 1\. Labor Management Training Program | I            |
|              | in Cali and Medellin                  | nternational |
|              |                                       | Labor        |
|              | 2\. Labor-Management Training in      | Organization |
|              | Bogotá                                | (ILO)        |
|              |                                       |              |
|              | 3\. Advanced Training for Senior      |              |
|              | Level LMG Officials                   |              |
+--------------+---------------------------------------+--------------+
| Korea        | Relationship development and training | Korean Labor |
|              | for the Korean Labor Education        | Education    |
|              | Institute                             | Institute    |
+--------------+---------------------------------------+--------------+
| Nigeria      | Petroleum Delta Capacity Building     | Che          |
|              | Program (basic collective bargaining  | vron-Texaco; |
|              | and negotiations skills training, and | ILO          |
|              | labor-management training)            | (tentative)  |
+--------------+---------------------------------------+--------------+
| Vietnam      | Training for labor, management and    | ILO          |
|              | government representatives in         |              |
|              | Interest-Based Problem-Solving and    |              |
|              | skills/ techniques/paradigms for      |              |
|              | cooperative labor relations. (August  |              |
|              | 2004)                                 |              |
+--------------+---------------------------------------+--------------+
| Bulgaria     | Techniques of labor-conflict          | ABA-CEELI    |
|              | resolution and prevention for both    |              |
|              | new mediators and advanced mediators  |              |
|              | in the newly formed Bulgarian         |              |
|              | mediation agency                      |              |
+--------------+---------------------------------------+--------------+
| Ireland      | Training on interest based bargaining | OD           |
|              | processes                             | Consultants  |
+--------------+---------------------------------------+--------------+
| Peru         | Ongoing consulting and delivery of    | Department   |
|              | training program for Ministry of      | of Labor     |
|              | Justice                               |              |
+--------------+---------------------------------------+--------------+
| Serbia and   | Training on formation and operation   | USAID        |
| Montenegro   | of dispute resolution mechanisms at   |              |
|              | the enterprise and industry level     |              |
|              | (e.g. grievance procedures,           |              |
|              | labor-management committees) as well  |              |
|              | as the development of a governmental  |              |
|              | mediation/conciliation institution    |              |
+--------------+---------------------------------------+--------------+
| Philippines  | Training facilitators and advocates   | Philippine   |
|              | to promote workplace cooperation and  | Association  |
|              | the quality of work life in the       | of           |
|              | Philippines and other countries in    | Labo         |
|              | the Asia-Pacific region.              | r-Management |
|              |                                       | Councils     |
+--------------+---------------------------------------+--------------+
| Cyprus,      | Advised acceding EU countries on      | European     |
| Czech        | National Development Plans for the    | Foundation   |
| Republic,    | provision or strengthening of         | for the      |
| Estonia,     | governmental labor mediation          | Improvement  |
| Hungary,     | services. Workshops and conferences   | of Living    |
| Latvia,      | held in Prague (January 2004) and     | and Working  |
| Lithuania,   | Ljubljana, Slovenia (March-April      | Conditions,  |
| Malta,       | 2004).                                | European     |
| Poland,      |                                       | Union        |
| Slovakia,    |                                       |              |
| Slovenia     |                                       |              |
+--------------+---------------------------------------+--------------+
| China,       | Developed and taught a 4-week course  | Whittier Law |
| P.R.C.,      | in international negotiations and     | School,      |
| Macao and    | dispute resolution to Chinese and     | Costa Mesa,  |
| Hong Kong    | American law students at Sun Yat-sen  | CA           |
|              | University as part of Whittier Law    |              |
|              | School's first China abroad program.  |              |
+--------------+---------------------------------------+--------------+

**X. SUMMARY**:

FMCS looks forward to a productive year ahead and we will focus on
increasing our presence in collective bargaining negotiations. We are
working to better educate the labor and management communities about the
value of mediation, the impact it can have on their relationship with
one another, and the influence it can bear on the collective bargaining
process as a whole.

For additional information about FMCS that has not been detailed in this
report, please contact Ariella Bernstein at <abernstein@FMCS.gov>, or
submit a Freedom of Information Act request. Instructions on filing a
FOIA request can be found on the FMCS Web site at:

<http://www.fmcs.gov/internet/itemDetail.asp?categoryID=100&itemID=15987>.

.

[^1]: 29 U.S.C, Section 205A(a)(1), 1947.

[^2]: The Agency does not assign every active case to a mediator. An
    active case is defined as one where an F-7 has been filed and a
    mediator in ngeotiations. We assign cases where the bargaining unit
    is in excess of 15 or the case involves an initial contract.

[^3]: Notifications to the Service by one or both parties desiring to
    modify a contract that is expiring, or for a specific reopening of
    an existing contract.

[^4]: Notifications from these two agencies regarding certification or
    recertification of bargaining units. Bargaining for an initial
    contract usually follows such certifications.

[^5]: Requests for mediation assistance from public sector parties where
    a state has a Public Sector Board with jurisdiction over labor
    contracts, but no state mediation service is available.

[^6]: Requests from the parties for mediation assistance where no
    notification to the Service has been filed.

[^7]: Case numbers assigned to notifications, certifications, and
    requests received by the Service. Some notifications are
    subsequently consolidated into a single case with a specific case
    number; therefore, the lower total of case numbers issued when
    compared to the intake.

[^8]: Cases assigned to a mediator. The decision to assign a case
    involves many factors and not all cases are assigned.

[^9]: ^13.^ Closed by Final Report filed by the mediator assigned to the
    case or by consolidation of a case with other cases after
    assignment^.^

[^10]: ^14^ Some cases are subsequently consolidated after assignment
    where it is determined that multiple parties will be involved in the
    same negotiations.

[^11]: ^15^ Cases closed where the mediator met with both parties on one
    or more occasions^.^

[^12]: ^16^ Cases closed where mediation assistance did not require any
    meetings with the parties, but where the mediator was in contact
    with the parties during the negotiations^.^

[^13]: ^17^ The number of meetings in closed dispute mediation cases
    where a mediator was present in a meeting between the parties.

[^14]: ^18^ The Bureau of Labor Statistics reports work stoppages over
    1,000 employees. FMCS reports all work stoppages.

[^15]: ^19^ Excludes cases closed by consolidation after assignment.

[^16]: ^20^ Cases closed with agreement reached occur with final
    agreement on an initial contract

[^17]: ^21^ Cases closed without agreement occur after two years if
    agreement has not been reached on initial contract

[^18]: ^22^ Unfair Labor Practices

[^19]: ^23^ For cases closed in the same fiscal year they are received

[^20]: ^24^ Relationship development and training involves the
    assistance of a mediator where a party or parties desires such help
    in improving the relationship during the term of the contract. Such
    assistance may include training, arranging labor‑management
    committees, and special programs.

[^21]: ^25^ Cases assigned to a mediator.

[^22]: ^26^ Closed by a Final Report filed by the mediator.

[^23]: ^27^ Outreach involves mediator meeting with various members of
    the public to discuss and/or explain the processes of mediation.

[^24]: ^28^ Frequently, the labor-management parties request more than
    one panel for arbitration cases, resulting in an increase in the
    number of panels issued over the number of requests received.

[^25]: ^\*^ Overtime pay issues included under this category are
    Economic: Wage Rates and Pay Issues.

[^26]: ^\*\*^ Included in this classification are issues concerning
    super seniority and union business.

[^27]: ^\*\*\*^ This classification also includes issues concerning
    safety.

[^28]: Employment mediation in the private and public sectors are
    reimbursable activities. We are compensated for travel, delivery and
    preparation time for each case handled.