### Federal Mediation and Conciliation Service

### Five-Year Strategic Plan

2004-2009

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### *September 8, 2003*

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### TABLE OF CONTENTS PAGE NUMBER: 

**I. FMCS SERVICES 4**

A. Dispute Mediation 4

B. Preventative Mediation 4

C. Alternative Dispute Resolution 5

D. International Efforts 5

E. Arbitration Services 5

F. Grants Program 6

G. FMCS Institute for Conflict Resolution 6

H. Youth Conflict Resolution and Peer Mediation 6

###  

**II. ASSESSMENT OF EXTERNAL FACTORS AFFECTING GOALS 7**

> A. Globalization of Industry 7
>
> B. Impact of Technology 7
>
> C. Economic Forecasts 7
>
> 1\. Uncertainty of Business Cycles 7
>
> 2\. Occupational and Industry Growth 9
>
> D. Rising Health Care Costs 10
>
> E. Effect of September 11, 2001 10
>
> F. Increase in Contract Duration 11
>
> G. Mergers of Labor Organizations and Corporate Consolidations 11
>
> H. Labor Force Demographics 12
>
> I. Increased Acceptance of Alternative Dispute Resolution 13
>
> J. School Violence 13

**III. Mission, VISION, AND Values STATEMENTs 14**

A. Mission Statement 14

B. Vision Statement 14

C. Values Statement 15

### 

**IV. GOALS 16**

**V. STRATEGIES 17**

> **[Strategic Goal 1 -- Minimize or Prevent Work Stoppages
> 17]{.smallcaps}**
>
> 1\. Definition of "Severe" Work Stoppages 17
>
> 2\. Strategies
>
> a\. Estimate Economic Impact of Work Stoppages 17
>
> b\. Estimate Economic Benefits of Preventing
>
> and/or Reducing Disputes 18
>
> c\. Active Involvement in Disputes with Significant Impact on Commerce
> 18
>
> d\. Special Focus On Industries Critical to the Economy 19
>
> e\. Health Care Industry 19
>
> **[Strategic Goal 2- improve Labor-management Relationships
> 20]{.smallcaps}**
>
> 1\. Definition of "Improved Relationship" 20
>
> 2\. Strategies
>
> a\. Number of Collective Bargaining Partners Committed to Cooperation
> 20
>
> b\. Measuring Effectiveness of Training Programs 21
>
> c\. Guidelines to Assess Relationship-Building Programs 21
>
> d\. Periodic Reviews of Training Programs 22

### 

> **[Strategic Goal 3 - facilitate development of systems
> for]{.smallcaps}**
>
> **[handling workplace disputes 23]{.smallcaps}**

### 

> 1\. Dispute Systems Design Generally 23
>
> 2\. FMCS Involvement in Dispute Systems Design 23
>
> 3\. Strategies:
>
> a\. Short term 23
>
> b\. Long term 23

**[Strategic Goal 4 - assist labor and management in
handling]{.smallcaps}**

> **[major issues Driving Conflict 24]{.smallcaps}**
>
> 1\. Strategies 24

###  [Strategic Goal 5 -- knowledge sharing/ADR Work 25]{.smallcaps}

> 1\. Prioritization of Knowledge Sharing/ADR Work 25
>
> 2\. Strategies:
>
> a\. Determine Criteria for Focusing on Knowledge
>
> Sharing/ADR Work 25
>
> b\. Preliminary Determinations 26
>
> 3\. General Knowledge Sharing 26

### I. FMCS SERVICES:

The 1947 Taft-Hartley amendments to the National Labor Relations Act,
(herein called the Labor Management Reporting Act, or the LMRA)
established the FMCS as an independent agency charged with mediating all
labor-management disputes substantially affecting interstate
commerce.[^1] Congressional intent is to advance and promote the best
interests of employers and employees through the collective bargaining
process, mediation of disputes and voluntary arbitration[^2] .

For fifty-six years, the Service has embraced these principles. The
Service's programs, developed and enhanced over the decades,
demonstrates our commitment to the prevention or minimization of
interruptions to the free flow of commerce growing out of labor
disputes, and to improving the relationship between labor and
management. Our core services, described below, are designed to resolve
conflict when it arises and prevent it before it begins.

**[A. Dispute Mediation:]{.underline}**

Mediation of collective bargaining contract negotiations has been the
primary work of this agency. This includes mediation for an initial
contract, contract renegotiations, and mediation of grievances that
arise during the life of a contract (called grievance mediation). Each
dispute mediation case, whether mid-term or a renegotiated contract,
presents its own demands. The mediator's task is to develop alternative
solutions and compromises, encourage settlement where appropriate,
control the critical timing of offers, and persuade the parties to
honestly identify their differences.

We have jurisdiction over the private sector and the federal sector.[^3]
Federal sector work includes mediation of mid-term contract disputes,
mediation over terms and conditions of employment in successor
contracts, and other alternative dispute resolution systems. Today,
federal sector work represents 11% of our caseload. Health care
institutions represent 9.2% of our workload.[^4]

**[B. Preventative Mediation:]{.underline}**

Although our primary focus continues to be resolution of conflict as it
arises, prevention of conflict at the outset remains an equally
important goal. Since its inception, FMCS has offered preventive
mediation training programs designed to improve the labor-management
relationship and develop approaches toward collective bargaining that
prevent friction or disputes from arising. The training improves the
quality of the parties' relationship and makes dispute mediation more
effective. This work now represents 16% of our work load. The increase
in average duration of contracts has created a demand for these training
programs.

**[C. Other Alternative Dispute Resolution:]{.underline}**

Outside the collective bargaining arena, FMCS has been involved in other
ADR programs in the public sector (state and local levels) and the
federal sector. 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 ADR
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. We provide
consultation, training, dispute resolution systems design and
facilitation services to many federal agencies, and to state and local
agencies. ADR 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.

**[D. International Efforts:]{.underline}**

Our work extends beyond the domestic border. FMCS plays an important
role in promoting collective bargaining and conflict resolution in other
nations. Our international work is a small, but integral part of our
services. Other nations struggle, as we do, to compete effectively in a
globally integrated marketplace. Part of that struggle includes an
assessment of the role and structure of the country's labor relations
systems. 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:
we are "cross-trained" as we gain familiarity with complex issues
effecting the global economy. As a result, we are more effective in
assisting labor and management in resolving disputes with international
implications.

Promoting peaceful and constructive labor management relationships has
an effect on social dialogue and consensus decision-making beyond the
industrial relations arena. These skills not only promote workplace
democracy and solutions to human rights problems, but also promote
sustainable economic development and the expansion of democratic
institutions.

**[E. Arbitration Services:]{.underline}**

Arbitration is favored by national labor policy and is used almost
universally to resolve disputes arising over contractual terms. FMCS
maintains a roster of 1400 private arbitrators and, upon request from
the parties, FMCS furnishes a list of names from which they can choose
an arbitrator to hear their case and render a decision. We maintain
standards for credentialing arbitrators, require continuing education
and ethics training, and have a customer complaint mechanism to address
complaints by the parties.

**[F. 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.\"[^5] 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 fiscal year 2002, we awarded 18 grants at a cost
of \$1.5 million to labor-management committees representing
approximately 1.6 million employees.

**[G. FMCS Institute For Conflict Resolution:]{.underline}**

The FMCS Institute provides training and education to labor and
management practitioners in a centralized 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,
group dynamics and multi-party facilitation, cultural diversity, equal
employment opportunity complaint mediation skills, and workplace
violence prevention. The Institute runs as a reimbursable program and is
funded by fees received for delivery of training.

**[H. Youth Conflict Resolution and Peer Mediation:]{.underline}**

In fiscal year 2000, with funding from Congress, FMCS began its Youth
Conflict Resolution and Peer Mediation program. This program provides a
means of nonviolent conflict resolution for students and staff and is
designed to assist elementary and secondary school staff in implanting a
school wide peer mediation program. Students, staff, and parents are
trained in basic conflict resolution skills to solve their disputes in a
constructive manner. The goal is to improve the school environment by
helping students and staff address underlying conflict that are at the
root of disputes that become violent or hurtful.

**II. ASSESSMENT OF EXTERNAL FACTORS AFFECTING GOALS AND OBJECTIVES**

A variety of forces impact the labor relations environment in which we
work. Listed below are the significant trends impacting the Agency and
its mission. We are mindful of them and continue to monitor developments
in order to respond to evolving trends.

**A. Globalization of Industry:**

Globalization has been defined as \"the increasing integration of the
world\'s peoples and nations, brought about by expanded international
flows of trade, investment, labor, capital, knowledge and
information.\"[^6] Improvements in technology, e.g., satellite
communications, fiber optics, and technologically superior equipment,
has advanced globalization of industry and integration of markets.
American businesses now compete in a global marketplace where goods cost
less to produce in other parts of the world, significantly impacting the
American workforce.

**B. Impact of Technology:**

Globalization has been accompanied by rapid improvements in technologies
that offer businesses the opportunity to reduce production costs.
Manufacturing jobs lost are not liable to return because of more
efficient machines and processes. Production jobs have been transferred
to lower cost areas, including abroad where labor is cheaper.[^7] This
factor upsets traditional modes of business and impacts the workplace.
To remain competitive in world markets, American businesses continue to
develop innovative technological approaches to keep pace with the rapid
changes in the global economy. The accelerated pace of change causes
workplace uncertainties, job loss, and has profound implications for
contract negotiations and cooperative relationships.

**C. Economic Forecasts:**

**1. Uncertainty of Business Cycles:**

The National Bureau of Economic Research is the arbiter of business
cycle dating information and declares when the economy is in recession
and when the recovery begins. The recovery cycle begins with an increase
in gross domestic product, and generally is followed by a decline in the
unemployment rate. The higher unemployment rates associated with the
recession that began in March 2001 have not receded even though the
economy has shown signs of recovery. Economists nationwide are grappling
with conflicting signals in the economy. In June 2003, service
industries reported their busiest month since September 2000, retail
sales increased, and financial markets have shown improvement.[^8]
However, the unemployment numbers for the same month show that payrolls
shrunk and the unemployment rate as of this writing was 6.4%, the
highest rate in almost a decade.[^9] Uncertainty and ambiguity in
economic forecasting makes it difficult for businesses to plan ahead,
directly impacting the work force.

Economic forecasters predict that the unemployment rate may not improve
because businesses increased output through productivity and not labor.
Companies are determined to use their existing technologies to improve
productivity, and, as employees adjust to new technologies, their output
increases thereby increasing profits.[^10] As a result, employers are
currently not hiring: factories have laid off 639,000 last year, and in
June 2003 alone, the airline industry cut 7200 jobs, retailers laid off
12,800 employees, and the telecom industry laid off 6900 employees.[^11]
Compounding the issue are concessions demanded by management of
organized labor. Manufacturers are pressured by foreign trade, rising
health care costs, and natural gas costs, and continue to demand
concessions from labor, despite productivity increases.[^12]

Increased pressure on productivity, increases in the unemployment rate,
and the uncertainty in predicting the start and end of business cycles
have a direct impact on collective bargaining. Management continues to
seek cost-savings measures while using technology to increase
productivity,[^13] while labor desires wage increases, increases in
health benefits, and job security in the face of uncertain times.
Economic uncertainty causes tension between the parties, complicates
collective bargaining negotiations, and strains the labor-management
relationship even after agreement has been reached. We continue to
monitor these economic trends and work with the parties to improve their
relationship as they navigate through difficult economic times.

**2. Occupational and Industry Growth:**

Related to economic forecasting are projections for occupational and
industry growth. We monitor these trends in order to keep pace with the
labor force, e.g., which sections of the economy anticipate growth,
which expect a decline, and the overall occupational demographic of the
work force. The Bureau of Labor Statistics reports the following
significant trends:[^14]

-   The service-producing sector will continue to be the dominant
    employment generator in the economy, adding 20.5 million jobs
    by 2010. Within the goods-producing sector, construction and durable
    manufacturing will contribute relatively modest employment gains.

-   As employment in the service-producing sector increases by 19
    percent, manufacturing employment is expected to increase by only 3
    percent over the 2000-2010 period. Manufacturing will return to its
    1990 employment level of 19.1 million, but its share of total jobs
    is expected to decline from 13 percent in 2000 to 11 percent in
    2010.

-   Health services, business services, social services, engineering,
    management, and related services are expected to account for almost
    one half nonfarm wage and salary jobs added to the economy during
    the 2000-2010 period. These sectors account for a large share of the
    fastest-growing industries.

-   Transportation and material moving occupations are projected to grow
    15%, about the same as the average for all occupations.

-   Office and administrative support occupations are projected slower
    than average, reflecting long-term trends in office automation.

-   Production occupations should grow "much more slowly" than average
    because of advances in manufacturing technology.

**D. Rising Health Care Costs:**

Surging health care costs will undoubtedly pervade collective bargaining
negotiations for years to come. Health care costs have increased
significantly because of advances in medical technology, an aging
population, increased use of hospitals and prescription drugs, and the
increasing number of uninsured whose health care costs burdens other
payers, including businesses and their employees. Additionally, the
Bureau of Labor Statistics predicts that health services wage and salary
growth will increase by 4.6%, also increasing the costs of health care.
All of these cost factors are largely beyond the control of labor and
management. However, health insurance costs, who will pay for it, and
how the parties apportion the cost, has become the single most important
issue during bargaining, overtaking wages and job security issues.
Employers contend that soaring health care costs have hurt
competitiveness, and if they cannot pass on some of the cost to
employees, by raising employee contributions, co-payments, or
deductibles, jobs will be eliminated. Even profitable employers are
seeking pay apportionment changes.[^15] This year, employee-paid
premiums and out-of-pocket costs are expected to rise to 24%. Labor
intends to fight any increases in employee contributions. Labor
relations academicians predict that this divide is likely to spawn an
increase in strike rates nationwide.[^16]

**E. Effect of September 11, 2001:**

Since the attacks of September 11, 2001, the resultant security fears
and the perceived need for increased vigilance in general, have affected
FMCS' approach to labor-management conflict resolution. To some extent,
the desire for additional security measures in certain workplaces has
affected contract negotiations and other mid-term bargaining. An
ancillary effect is the significant disruption in the airline, hotel and
restaurant industries, where companies have reported a drop in earnings
due the decrease in travel. These economic pressures affect contract
negotiations as well. Additionally, the parties are less willing to
travel for bargaining, labor-management conferences, training programs,
and certain labor-management cooperative partnership work. We continue
to work with the parties well in advance of contract expiration to
reduce or manage disputes during renegotiation, while simultaneously
reducing the need to travel for collective bargaining purposes.

The Homeland Security Act of 2002, a direct result of the September 11
attacks, has the potential for future impact on the Agency's work. The
Act makes the services of the FMCS available to the parties to
"facilitate the process of attempting to reach agreement" on proposed
personnel changes. We have offered mediation services to the Department
of Homeland Security for employment disputes, facilitation, and
training, and have begun mediating employment disputes involving air
marshals employed by the Transportation Security Authority.

**F. Increase in Contract Duration**

In the last three years, 20% to 22% of collective bargaining agreements
exceeded three years. This steady trend can improve the labor-management
relationship: longer contract periods bring stability and consistency.
Yet the same trend can pose inherent dangers: accumulation of unresolved
issues during the life of a contract, increased grievances to challenge
ambiguous contract language, and contentious bargaining over successor
contracts. The parties' relationship during a lengthy contract period
can be complex and may ebb and flow with periods of complacency followed
by, or coupled with, tension during the renegotiation period. We
continue to train the labor-management community in cooperative problem
solving techniques and provide grievance mediation services to resolve
conflicts arising between more distant renegotiations.

**G. Mergers of Labor Organizations and Corporate Consolidations:**

With the decline of union membership,[^17] there has been a
corresponding increase in union mergers.[^18] Mergers enhance bargaining
and organizing power, eliminate duplication of effort, and increase
financial and administrative resources. However, mergers bring turnover
in leadership within the organization and inexperienced labor leaders
often do not have a grasp of relevant workplace issues, business
concerns or the negotiation process. This can have an effect on the
collective bargaining process, and makes it more difficult for *both*
parties to reach a settlement.

On the management side, corporate downsizing through consolidation and
layoffs can also have a significant impact on the workplace. Some
economists assert that corporate downsizing neither restores the
competitive edge, nor boosts productivity, as previously believed.
Instead, downsizing can leave \"surviving\" employees over-burdened and
demoralized, hurting productivity and relationships between employees
and management.[^19] Although the rate of corporate mergers and
acquisitions fell in the last year,[^20] when they do occur, they can
lead to rapid turnover at the executive level, with an ancillary and
taxing effect on the employees below.

**H. Labor Force Demographics:**

The demographic composition of the work force is expected to change
because of changes in the composition of the population and rates of
workforce participation across demographic groups. Expansion of the
immigrant workforce population and generational changes due to retiring
employees will impact the bargaining process. Changes in the "face" of
the labor force impacts bargaining particularly where labor and
management have difficulty adjusting to needs of the changing workplace.
Bureau of Labor Statistics reports some significant tends:[^21]

-   In 2010, the baby-boom will be ages 46 to 64, and this age group
    will account for a substantial share of the labor force. The median
    age of the labor force will continue to rise, even though the youth
    labor force (aged 16 to 24) is expected to grow more rapidly than
    the overall labor force for the first time in 25 years.

-   The labor force participation rates of women in nearly all age
    groups are projected to increase. The women\'s labor force will grow
    more rapidly than the men\'s, and the women\'s share of the labor
    force will increase from 47 percent in 2000 to 48 percent in 2010.

-   The Asian and the Hispanic labor forces are projected to increase
    faster than other groups, 44 percent and 36 percent, respectively,
    because of high net immigration and higher than average fertility.
    The African American labor force is expected to grow by 21 percent,
    more than twice as fast as the 9 percent growth rate for the white
    labor force.

-   White non-Hispanics accounted for 73 percent of the labor force in
    2000 but their share of the labor force in 2010 will decrease to 69
    percent.

Such a diverse work force has potential for strife, and if unmanaged,
can develop into unresolved conflict.

**I. Increased Acceptance of Alternative Dispute Resolution:**

The use of alternative dispute resolution is not a new sensation.
However, the breadth, volume, and systematic usage of ADR has grown.
Throughout our society, from family disputes to neighborhood,
environmental, intergovernmental, legal, and workplace disputes, ADR has
become the preferred choice in working toward settlement. FMCS has more
collective experience in dispute resolution than any other agency of
government and can offer its services within and beyond the workplace.

**J. School Violence:**

Our nation continues to be shaken by a series of high profile violent
incidents on school campuses. At a time when education is most critical
to our country's future workforce, violence in schools contributes to
the erosion of taxpayers' confidence in public education. The FMCS Youth
Conflict Resolution program continues to provide school children,
parents and teachers with basic conflict resolution skills.

**III. Mission, VISION, AND Values**

**[A. Mission Statement]{.underline}**

FMCS's mission statement reflects the statutory intent of the Agency.
Our mission is to:

-   Promote the development of sound and stable labor management
    relationships;

-   Prevent or minimize work stoppages by assisting labor and management
    to settle their disputes through mediation;

-   Advocate collective bargaining, mediation and voluntary arbitration
    as the preferred processes for settling issues between employers and
    representatives of employees;

-   Develop and advocate the art, science and practice of conflict
    resolution through the use of ADR;

-   Assist parties in conflict through the provision of conflict
    resolution services; and

-   Foster the establishment and maintenance of constructive joint
    processes to improve labor-management relationships, employment
    security and organizational effectiveness.

**[B. Vision Statement:]{.underline}**

The Agency helps build better relationships through joint
problem-solving and constructive responses to inevitable conflict. In
turn, this improves the ability of organizations to create value for
customers, shareholders and employees alike, and substantially benefits
the national economy. The Agency concentrates its efforts on assisting
employers and employees cope with the demands of a rapidly changing
workplace. Trends that the Agency views as particularly important
include significant increases in: (1) the cost and complexity of health
care; (2) the globalization effects on the workplace; (3) the
application and importance of technology in the workplace; and (4)
workplace litigation and conflict arising largely outside the scope of
collective bargaining and focusing on individual employees.

With a more than 50-year history of providing mediation and facilitation
services, FMCS has more collective experience in dispute resolution than
any other agency of government. FMCS can add value beyond the workplace
by sharing its considerable dispute resolution experience with a variety
of organizations. Among the areas where FMCS can make a contribution are
in school systems (focusing on youth violence), in courts (helping to
improve systems for use of alternative dispute resolution), and
internationally (assisting developing and/or newly democratic countries
set up dispute resolution programs). These factors are addressed in
greater detail in Section IV and V, covering our goals and strategies.

**[C. Values Statement:]{.underline}**

Reflecting our mission statement, our commitment to a viable collective
bargaining system, and the benefit of effective conflict resolution
processes as a foundation for society's well being and economic growth,
this value statement embodies our core principles:

-   Relationships are critical to the success of an organization: they
    affect creativity, productivity and adaptability, as well as the
    quality of workplace life.

-   Poor relationships and communication represent a substantial barrier
    to achieving the kind of process innovation and high performance
    work organization demanded in the current business climate.

-   The Agency's core mission of mediating and facilitating the
    resolution of workplace disputes and problems requires absolute
    neutrality, confidentiality, and acceptability to customers.

-   In order to have maximum impact and to meet statutory obligations,
    the Agency must focus primarily on organizations and matters having
    the greatest effect on interstate commerce and/or public health and
    safety.

-   Collaborative, problem-solving approaches to the resolution of
    conflict should be cultivated and encouraged whenever possible.

**IV. GOALS**

The Agency's goals, set forth below, are broad guidelines that shape our
future and influence decision-making processes. Our objectives, and the
strategies we intend to achieve these goals (Section V), are
wide-ranging in scope and will be reviewed and refined annually in the
Agency's performance plan.

**[[Strategic Goal 1:]{.underline}]{.smallcaps}**

[To minimize the number and severity of work stoppages substantially
influencing interstate commerce, national security, and/or the U.S.
health care industry, by use of mediation and other dispute resolution
processes.]{.smallcaps}

**[[Strategic Goal 2:]{.underline}]{.smallcaps}**

[To increase the number of collective bargaining partners with a real,
detailed, and ongoing commitment to developing improved labor-management
relationships and more effective problem-solving
techniques.]{.smallcaps}

**[[Strategic Goal 3:]{.underline}]{.smallcaps}**

[To facilitate 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.]{.smallcaps}

**[[Strategic Goal 4:]{.underline}]{.smallcaps}**

[To assist labor and management to increase their understanding of, and
effectively deal, with major issues that drive conflict in the evolving
workplace, including health care, technology, effects of globalization,
and diversity.]{.smallcaps}

**[[Strategic Goal 5:]{.underline}]{.smallcaps}**

[To effectively manage knowledge gained from the Agency's considerable
experience in workplace conflict resolution, and to share that knowledge
with an increasing number of organizations, including those outside of
the workplace context such as schools, courts, and
international/overseas organizations.]{.smallcaps}

**[V. STRATEGIES:]{.underline}**

[**[Strategic Goal 1:]{.underline}** Minimizing the number and severity
of work stoppages influencing interstate commerce, National Security,
and/or the U.S. health care industry.]{.smallcaps}

**[1. Definition of "Severe" Work Stoppages:]{.underline}**

The Agency's statutory mission is to prevent or minimize strikes that
interrupt the free flow of commerce. Accordingly, our task is to reduce
the number and severity of work stoppages in general. Achieving these
goals requires defining a "severe" work stoppage. There cannot be, nor
should there be, a bright line test that determines a work stoppage to
be severe, for each work stoppage is unique to its geographical
location, the industry involved, the community where it occurs, and the
impact on related industries inside and outside the community. Bearing
this in mind, we developed the following list of factors to help
determine the severity of a work stoppage:

-   Economic impact, including a shutdown of a major industry or
    ancillary industry;

-   Substantial job loss, although the precise number might vary
    depending on the circumstances;

-   Impact of the work stoppage on the community and its residents;

-   Workplace violence, such as picket line violence;

-   National security issues, such as a work stoppage in an industry
    providing goods or services to the Department of Defense or the
    Department of Homeland Security;

-   Health care, where a work stoppage risks the well-being of patients
    at acute care and other health care institutions;

-   International impact, where our trading partners, relying on our
    goods and services, show concern about the work stoppage and its
    impact on their economy; and/or

-   Unit size, although the size of the unit, on its own, may not be
    factor, but can be an overall economic impact factor.

> These criteria can be evaluated either in the disjunctive or the
> conjunctive; any one of them individually or collectively might be
> sufficient to warrant a conclusion that work stoppage is "severe,"
> although it is likely that more than one factor will be present when
> concluding that a work stoppage is severe. Each of the indicia listed
> above will become part of the Agency's case tracking system so we can
> collect data on severe work stoppages.

**[2. Strategies:]{.underline}**

> **[a. Estimate Economic Impact of Work Stoppages:]{.underline}**
>
> The economic impact of work stoppages is not easily ascertained. There
> are a number of factors to consider and we will explore economic
> impact models that can best estimate the impact of a work stoppage on
> the economy. Any matrix developed will include the following
> indicators:

-   Wage impact -- approximating the actual dollars lost due to a
    strike;

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-   Product/service impact -- approximating the dollars lost in
    production and/or sales;

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-   Impact on health, safety, and national security;

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-   Multiplier effect - the direct or indirect impact of the strike on
    other industries; and

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-   Affect of the strike on the community in which the strike occurred.

> **[b. Estimate Economic Benefits of Preventing and/or Reducing
> Disputes]{.underline}**:
>
> Mediators use a significant number of techniques to resolve disputes
> and it is extremely difficult to determine which techniques achieve
> greater success over any other. However, we can measure the benefits
> of mediation to the economy by the development of formulas and/or
> matrixes that estimate:

-   the percentage of work stoppages averted because of mediator
    involvement;

-   the number of strike duration days reduced because of mediator
    involvement; and

-   the direct or indirect impact of the strike on other industries.

> We will develop cooperative relationships with academic institutions
> and/or labor economists to develop economic models that address these
> issues.

**[c. Active Involvement in Disputes with Significant Impact on
Commerce:]{.underline}**

> Historically, there have been industries where either labor or
> management resisted mediation efforts to resolve their disputes. Some
> of those industries have a significant impact on commerce. Penetrating
> those industries to resolve disputes would benefit that industry as
> well as the economy as a whole. To assure the free flow of commerce in
> these industries, we will:

-   Determine the industries where we have not been actively involved in
    disputes;

-   Create a working group to identify why we have not penetrated
    certain industries and how we can provide mediation services in
    industries that have a "significant impact" on interstate
    commerce/economy;

-   Develop a detailed plan for penetrating industries that would
    include the following:

    -   Relationship building: Developing relationships with the parties
        through high-level meetings with representatives of organized
        labor at the international level and management at the highest
        levels;

    -   Tripartite cooperation: Developing a tripartite panel to
        increase penetration in disputes in specific industries that
        have significant impact on interstate commerce. Cooperate with
        senior labor and management representatives in significant
        industries to minimize impacting work stoppages; and

    -   Assign a "Director representative" to significant industries:
        Once "significant industries" are identified, assign
        "representatives of the Director" as the point of contact to
        handle specific industry disputes that impact on interstate
        commerce. Where a dispute is considered "significant," the
        National Office will be notified prior to assignment.

**[d. Special Focus On Industries Critical to the
Economy:]{.underline}**

> While we have not fulfilled our potential in certain industries, there
> are some industries where we remain an active presence and are
> regularly involved in disputes. Currently, when a dispute arises in
> industries critical to the economy, we realign our resources to give
> that dispute priority, assign the case based on expertise developed by
> a particular mediator, and advise the Office of the Director of the
> high-profile dispute. We can do more to expand our impact, including:

-   In "significant case assignments," consult with the local director
    of mediation services to discuss the issues and determine
    appropriate resource allocation;

-   Pre-assign significant cases even prior to our receipt of the F-7
    notice of contract expiration;

-   Develop industry-specific expertise across the organization;

-   Use technology to information-share (within the Agency) common
    issues that develop nationwide;

-   Succession-planning in situations where mediators have strong
    industry expertise; and

-   Greater emphasis on teamwork cross-regionally and with the National
    office, with incentives for teamwork.

**[e. Health Care Industry:]{.underline}**

> As indicated in Section II, health care services are one of the
> fastest growing industries. The health care industry continues to
> expand and common issues continue to plague negotiations in which we
> are active. We will continue to examine whether there are bargaining
> issues unique to certain sectors of the health care industry (acute
> care hospitals, other health care facilities, and home health care)
> and we will gather information on industry trends from a variety of
> sources. To promote interagency information sharing, and to increase
> the knowledge of the field mediators in the health care industry and
> the issues facing it, the public affairs director will gather and
> circulate information regarding industry trends, along with a list of
> pending health care cases tracking specific information, including:

# issues involved, e.g., staffing or overtime; 

# trends in specific units, e.g., licensed practice nurses, registered nurses, or nurses aides; 

# cost pressures, e.g., costs of providing health care to patients versus cost of labor; 

# consolidating/merger issues; 

# community concerns, e.g., neighborhood concerns, sole health care institutions within a community, and access to health care; and

# effect on patient-care. 

[**[Strategic Goal 2]{.underline}**: increase the number of collective
bargaining partners with an ongoing commitment to improving their
relationship.]{.smallcaps}

**[1. Definition of "Improved Relationship"]{.underline}**:

This goal specifically relates to the Agency's training and facilitation
programs (preventative mediation) designed to improve the
labor-management relationship and develop approaches toward collective
bargaining that prevent friction or disputes from arising. Evaluating
whether our programs have "improved" the parties' relationship involves
subjective and objective measurements, and, at a minimum, a clear
definition of an "improved relationship." Our definition of an
"improved" labor-management relationship includes these factors:

-   Organizational self-definition of "improved relationship" from
    parties' perspective;

-   Effective resolution of workplace disputes/grievances (quality of
    the resolution);

-   Reduction in workplace disputes/grievances (quantity or number of
    grievances on file);

-   Open communications;

-   Increased productivity;

-   Support for labor-management committees by high level
    labor-management representatives;

-   Commitment, in writing, to an improved relationship;

-   Proactive information-sharing prior to conflict arising; and

-   Assessing the parties' relationship on an ongoing basis.

**[2. Strategies]{.underline}**:

> **[a. Number of Collective Bargaining Partners Committed to
> Cooperation]{.underline}**:

We will gather data, measure, and report the number of collective
bargaining partners that have demonstrated an intent to collaboratively
resolve workplace issues such as:

-   Workplace violence

-   Diversity

-   Effects of globalization

-   Health care issues

-   Technology

-   Job security

-   Competitiveness

-   Retirement benefits

-   Legacy costs

-   Cross training opportunities/succession issues

-   Downsizing/Rightsizing

-   Merger, consolidation and reorganization

**[b. Measuring Effectiveness of Programs to Improve Labor-Management
Relationships:]{.underline}**

To measure the effectiveness of our programs, we will conduct periodic
customer surveys and the parties will be informed of our intent to
assess the relationship in the future. A customer survey will be
conducted immediately after the training or other program, six months
later, and one year later, and there shall be periodic visits by the
mediator. The survey instrument will focus on these core questions[^22]:

-   What prompted the program?

-   Did it meet your expectations?

-   Would you use it again?

-   Did it have an impact on your relationship and explain how.

> **[c. Guidelines to Assess Relationship-Building
> Programs:]{.underline}**

While all of our training and facilitation programs are designed to
improve the labor-management relationship, there are some preventative
mediation programs that have a greater emphasis on
relationship-building. The relationship-by-objective (RBO) program is
designed to improve labor-management relationships that severely
deteriorate after a strike, contentious election campaigns, or difficult
negotiations. Committee effectiveness training (CET) is geared toward
helping the parties work jointly and collaboratively in group settings.
Labor-management committees (LMCs), are designed to continue without
mediator assistance, and is fundamentally based on joint problem solving
tools. These three programs emphasize relationship building and we will
develop guidelines that regularly assess the parties' relationship after
these kinds of programs.

> **[d. Periodic Reviews of Training and Facilitation
> Programs:]{.underline}**

Based on the feedback we receive from customer surveys, we will
continuously evaluate our training and facilitation programs, improve
them, and add new programs as necessary.

**[[Strategic Goal 3:]{.underline}]{.smallcaps}**

[To facilitate 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.]{.smallcaps}

**[1. Dispute Systems Design Generally]{.underline}**

The Agency has partnered with the Straus Institute for Dispute
Resolution at Pepperdine University to research and develop approaches
to dispute resolution systems design in the workplace. The focus is on
systems that address conflicts in the unionized workplace that are not
ordinarily handled through an organization's collective bargaining
agreement (e.g., statutory, rights-based disputes as well as underlying
problems in relationships, morale, etc.).

**[2. FMCS Involvement in Dispute Systems Design]{.underline}**

Rather than prescribing a particular design or product, FMCS expects to:

-   Promote the use of helpful approaches to dispute systems design to
    the labor and management communities;

-   Provide convening services to both labor and management regarding
    dispute systems: preliminary interest, structure for the
    negotiations, and facilitation of the decision to proceed;

-   Facilitate the design negotiations for a given workplace;

-   Support training for key personnel implementing a dispute systems
    project;

-   Provide technical support for implementation of a dispute systems
    project; and

-   Help evaluate the effectiveness of systems after implementation and
    develop metrics or appropriate benchmarks for success.

**[3. Strategies:]{.underline}**

a\. **[Short term]{.underline}**: This project will be piloted on a
small scale. During the pilot phase, the program will be rolled out in a
select few industries (perhaps as few as two or three enterprises). The
pilot programs will be carefully evaluated with recommendations for
change as may be appropriate.

b\. **[Long term]{.underline}**: If the pilot programs show substantial
promise, the effort will be expanded. All mediators will be offered
initial training. Those who indicate an interest in comprehensive
participation will receive more in-depth training in this area. Regional
management will have the discretion to assign the work to those with
requisite ability and desire.

[**[Strategic Goal 4]{.underline}**: assist 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.]{.smallcaps}

**[1. Strategies:]{.underline}**

Section II identified many of the trends and factors that affect
collective bargaining today. Bargaining takes place in an environment
laden with rapid changes: technological advancements, rising health care
costs, and a demographically changing workforce which now includes a
high percentage of immigrants, employees of different races and national
origin, and generational changes. Our task is to prepare ourselves and
the parties to deal with these trends that drive conflict in the
workplace. To meet these demands, we will:

-   Develop internal seminars and training programs in critical
    industries, including telecommunications, healthcare, and aerospace,
    to educate field staff on specific critical labor issues arising in
    these industries and how to deal with them at the bargaining table.

-   Develop a nationwide committee, consisting of high level labor and
    management officials, and academicians, to addresses health care
    issues that arise at the bargaining table and devise successful
    solutions.

-   Use field mediators to develop expertise in each of these areas and
    develop training programs for roll-out to the field (utilizing more
    than one mediator to develop the programs to encourage buy-in).

-   Train all mediators so that they can effectively handle these
    difficult issues when they arise.

-   Alter work stoppage reports and benchmark them with these specific
    issues (i.e., health care, technology, globalization and diversity)
    in order to measure the percentage of strike situations where these
    issues were factors.

-   Train the labor-management community on how to effectively bargain
    over these complex issues and measure how many training sessions we
    conducted for the labor-management community.

[**[Strategic Goal 5]{.underline}**: share knowledge gained from the
Agency's experience in workplace conflict resolution with those outside
of the workplace context such as schools, courts, and
international/overseas organizations.]{.smallcaps}

**[1. Prioritization of Knowledge Sharing/ADR Work:]{.underline}**

Since the passage of the Administrative Dispute Resolution Act of 1990,
the Negotiated Rulemaking Act of 1990, and the Administrative Dispute
Resolution Act of 1996, the Agency has expanded its practice of
alternative dispute resolution outside the workplace collective
bargaining context. The scope and usage of ADR nationwide has grown to
encompass environmental, intergovernmental, courtroom, and workplace
disputes. ADR has become the preferred choice in working toward
settlement. Our mediation experience places us in a unique position to
offer dispute resolution outside the workplace arena.

**[2. Strategies:]{.underline}**

**[a. Determine Criteria for Focusing on Knowledge Sharing/ADR
Work:]{.underline}**

Limited resources compel us to make choices in determining the kind of
knowledge sharing/ADR work the Agency focuses on. Accordingly, we have
developed critical factors we will apply to determine whether particular
work appropriately fits our statutory mission:

-   **Workplace nexus**: is there a connection between the work and the
    workplace in general?

-   **Impact on core mission work**: does the work have any positive or
    negative impact on traditional collective bargaining mediation?

-   **Impact on interstate commerce, on the workplace, and on the
    community:** does it involve a dispute that impacts the free flow of
    commerce, the workplace as a whole, or the community in which it is
    centered?

-   **Scope nature of the conflict/project** (breadth and depth on both
    the domestic and international stage): does the work have national
    implications, or does it have significance in the international
    arena?

-   **"Return" or benefits**: how does our involvement in that
    particular work benefit the Agency and how does it balance against
    the cost?

-   **Financial and human capital resource allocation needs**: what are
    the resources required to accept the assignment?

-   **Goodwill costs versus benefits**: will the work cause anyone to
    look unfavorably on our handling the work?

**[b. Preliminary Determinations:]{.underline}**

Looking forward, we will continue to evaluate the knowledge sharing/ADR
work on which to focus, but have applied the above criteria and, at a
minimum, determined that we will focus on:

-   **[Government and federal administrative agencies]{.underline}**:
    Generally, where there is a governmental interest, or where the work
    is inherently governmental, FMCS should have substantial involvement
    because of the statutory intent of the Administrative Resolution Act
    of 1996.

-   **[State and local agencies]{.underline}** (political and
    administrative divisions of the state): Coordinate, communicate, and
    cooperation with state and local agencies for efficient delivery of
    services. Cooperative efforts will be made with Association of Labor
    Relations Associations (ALRA) and any other organization with an
    interest.

-   **[Academic Partners]{.underline}** (formal and informal): Work with
    universities to partner on ADR coursework;

-   **[Courts:]{.underline}** Court-directed mediation relating to the
    workplace context;

-   **[Schools]{.underline}**: Working with communities and schools to
    teach children conflict resolution and anger management skills;

-   **[International organizations and foreign
    governments]{.underline}**: Training for friendly foreign
    governments, ILO local officials, and NGOs, in conflict resolutions
    skills to resolve workplace disputes and in building mediation
    agencies.

**[3. General Knowledge Sharing:]{.underline}**

Sharing our knowledge and experience in conflict resolution,
domestically and internationally, enhances mutual knowledge across
borders and hones our core mission skills. Accordingly, our primary goal
is to:

-   Acquire skills and knowledge in conflict resolution related to our
    core mission work and promote our knowledge to the domestic and
    international labor-management arenas through:

    -   FMCS authorship of academic publications, law reviews, and other
        scholarly publications;

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    -   Involvement in professional organizations such as Association
        for Conflict Resolution, Federal Dispute Resolution, and
        Industrial Relations Research Association, and share knowledge
        gained through circulation of notes or agenda from meetings
        nationwide; and

    -   Centralization of information through public affairs office and
        use of technology to disseminate information.

[^1]: FMCS jurisdiction under Taft-Hartley excludes the rail and airline
    industries, which are covered by the Railway Labor Act and the
    National Mediation Board.

[^2]: Section 201 of the LMRA.

[^3]: In 1974, the Service's jurisdiction was expanded to include health
    care institutions, and in 1978, our jurisdiction was expanded
    further to include disputes arising in the federal sector. In 1979,
    Congress extended our jurisdiction to the U.S.P.S.

[^4]: All statistics and percentages were generated from the Agency's
    case tracking system from fiscal year 2002 data.

[^5]: Section 205A(a)(1).

[^6]: Melloan, G. (2002, September 3). "Workers of the World Are
    Shedding Their Chains." *Wall Street Journal*, citing Linda Y.C. Lim
    of the University of Michigan Business School.

[^7]: By some estimates, roughly 1.3 million manufacturing jobs have
    moved abroad since 1992, the bulk in the past three years to Mexico
    and East Asia. See Ansberry, C. (2003, July 21). "Laid-Off Factory
    Workers Find Jobs are Drying Up for Good." (*Wall Street Journal)*.

[^8]: See Cooper, J. and Madigan, K. (2003, July 21). "The Jobless
    Recovery: Déjà Vu All Over Again." (*BusinessWeek*) Also see Federal
    Reserve Conference Board for manufacturing, wholesale and retail
    sales which show a growth.

[^9]: Greenhouse, S (2003, July 11). "Unions Finding That Employers Want
    More Concessions." (*The New York Times*).
    <http://www.nytimes.com/2003/07/11/national/11LABO.html>

[^10]: Id.

[^11]: Businesweek and Washington Post, citing Macroeconomic Advisers at
    the Department of Labor. Bureau of Labor Statistics.

[^12]: Greenhouse, S (2003, July 11). "Unions Finding That Employers
    Want More Concessions." (*The New York Times*).
    <http://www.nytimes.com/2003/07/11/national/11LABO.html>.

[^13]: Id.

[^14]: Note that all of the information listed below was secured from
    the Department of Labor, Bureau of Labor Statistics. See
    <http://www.bls.gov/news.release/ecopro.nr0.htm>.

[^15]: See Greenhouse, S (2003, July 11). "Unions Finding That Employers
    Want More Concessions." (*The New York Times*).
    <http://www.nytimes.com/2003/07/11/national/11LABO.html>.

[^16]: See generally Stires, D (2003, March 3). "The Breaking Point ;
    Worker health costs will rise a staggering 24% this year. Companies
    can no longer afford to pick up the bill. The battle is here."
    (*Fortune Magazine)*

[^17]: In 2002, workers in the public sector had a union membership rate
    over four times that of private-sector employees, 37.5 percent
    compared with 8.5 percent. See Bureau of Labor Statistics News
    Release, "Union Members 2002," at
    [http://www.bls.gov/news.release/union2.nr0.htm](http://www.bls.gov/news.release/union2.nr0.htm ).

[^18]: See Williamson, L (1995) "Union Mergers, 1985-1994 Update,"
    *Monthly Labor Review.*
    <http://www.bls.gov/opub/mlr/1995/02/art2full.pdf>.

[^19]: See Hilsenrath, J (2001, February 21). "Many Say Layoffs Hurt
    Companies More Than They Help \-\-- \'The Evidence Is Very Weak\'
    That Downsizing Boosts Productivity." (*Wall Street Journal*). 2001
    WL-WSJ 2854935

[^20]: See Frank, R (2002, June 25). "Where Have the Masters of the Big
    Mergers Gone? \-\-- As Corporate Acquisitions Cede To Divestitures
    and Spinoffs, Epoch of Big Deals May Be Over." (*Wall Street
    Journal*). 2002 WL-WSJ 3398864

[^21]: ? Note that all of the information listed below was secured from
    the Department of Labor, Bureau of Labor Statistics.
    <http://www.bls.gov/news.release/ecopro.nr0.htm>. In particular, see
    Table 5 at <http://www.bls.gov/news.release/ecopro.t05.htm>.

[^22]: We will explore various methods for conducting the survey,
    including face-to-face surveys, telephonic surveys, use of
    technology for on-line surveys, or use of the "feedback" section of
    the website.