2005 
2

This report details the activities of this agency for Fiscal Year 2005. 

 

In this first decade of the 21st century, the Federal Mediation and Conciliation Service 

(FMCS) is positioned to play a key role in historic changes affecting our workplaces and our 

economy. With economic globalization has come the need for a flexible, mobile workforce. Free 

trade has engendered a new set of international competitors for U.S. companies. Health care and 

pension costs continue to rise, placing a significant economic burden on employers and employees. 

This year, the labor movement faced its own internal turmoil when the Service Employees 

International Union, the United Food and Commercial Workers, the International Brotherhood of 

Teamsters, and Laborers’ International Union of North America disaffiliated from the AFL-CIO. 

 

FMCS delivers conflict resolution assistance to the nation’s unionized workplaces. Helping 

employers and unions avoid work stoppages and their potentially devastating effects on the local, 

regional or even national economy through mediation services constitutes the core work and focus of 

FMCS. 

In FY 2005, the Employment Policy Foundation, a nonprofit, nonpartisan public policy 

research foundation, found that FMCS mediation has a significant impact on American companies 

and workers. According to the study, mediation saved U.S. businesses and workers approximately $9 

billion between 1999 and 2004. 

 

EPF also estimated that, without FMCS intervention, the costs of work stoppages to the U.S. 

economy over a six year period would have been 71 percent greater--$21.7 billion instead of $12.7 

billion--and would have impacted 76 percent more workers, 4 million instead of 1.85 million. 

Without FMCS mediation, the number of work stoppages in an average year would be 61 percent 
3

 

FMCS prevented 1,265 work stoppages over the six-year period and saved employees, 

employers and others doing business with them approximately $1.3 billion annually in wages and 

profits that otherwise would be lost. 

The study also shows that timing of FMCS intervention has significance. If mediation starts 

before the contract expires, work stoppage duration can be reduced by 46 percent. EPF estimated 

that this reduction in work stoppages resulted in an average annual benefit of $207 million. 

FMCS recognizes that there has been a significant reduction in the number of work 

stoppages every year – a 90 percent reduction since 1970. However, work stoppages in FY 2004 

alone had a significant impact on American companies and workers. Despite the lowest strike rate 

in decades, the 273 work stoppages in 2004 had a direct impact on wages and company profits, 

causing $954,527,000 in lost wages and $147,948,000 in lost company profits. The same work 

stoppages had an indirect impact - $2 billion in lost wages, and caused 338,643 lost jobs in 

ancillary industries. 

 Nationwide in FY 2005, field mediators were involved in about 5000 collective bargaining 

disputes. In 87% of those cases, FMCS assisted the parties in achieving collective bargaining 

settlements. In addition, we continue to train the labor-management community on methods 

designed to improve labor-management relations through training programs. FMCS provided 

relationship development and training programs 2257 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. FMCS mediated 1446

employment-related disputes, and mediated 1675 grievance cases arising out of current collective 

bargaining agreements. 

 

 As technology, global competition and other economic forces continue to transform 

American workplaces, the Federal Mediation and Conciliation Service is keeping pace in this 

period of historic change 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. 

 Scot Beckenbaugh, Acting Director 
4

A. Agency Mission 

For fifty-eight 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. 

1. Collective Bargaining Mediation:

Initial and Successor Contract Negotiations

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 goal is to 

assist the parties in working through the issues and to reach a mutually acceptable agreement. 

Through collective bargaining mediation, FMCS helps avert or minimize the impact of work 

stoppages on the U.S. economy. 

In FY 2005, FMCS mediators were actively involved in about 50001 collective bargaining contract 

negotiations in every major industry and service throughout the United States. 

 

2. Grievance Mediation 

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 2005, 19% 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. In FY 2005, FMCS mediated 1675 grievance mediation cases. 

 1

 FMCS mediators had at least one meeting with one of the parties in about 5000 cases in FY 2005. This includes cases that were closed in FY 2005 and 

cases that remained open and carried over to the next fiscal year. 
5

3. Relationship Development and Training Programs

 Although our primary focus continues to be resolution of conflict as it arises, prevention of 

conflict at the outset is also an important goal. The agency’s relationship-building training 

programs are 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. 

In addition to our training programs, field mediators continuously participate in outreach 

activities by lecturing at universities, seminars and conferences, and meet with local leaders in the 

collective bargaining community. 

4. Arbitration Services

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. 

5. FMCS Institute 

 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, mediation skills for the 

workplace, and workplace violence prevention. The Institute runs as a reimbursable program and is 

funded by fees received for delivery of training. 
6

6. Employment Mediation

 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.

In FY 2005, FMCS mediated 1446 employment cases. 

7. International Training and Exchange 

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. 
7

 

 

 2

 Section 8(d) of the Act requires that any employer or labor organization provide notice to this Agency 60 days prior to contract expiration. This is known as an “F-7” 

notice. All F-7 notices where the bargaining unit is greater than 15 are assigned to a mediator. If the bargaining unit size is less than 15, the case is unassigned. However, all 

newly certified units (certified by the National Labor Relations Board or the Federal Labor Relations Authority) are assigned to a mediator regardless of the unit size. 3

 This number is less than it was in prior years because, in FY 2004, the Agency determined that it was no longer appropriate to group collective bargaining mediation cases 

with grievance mediation cases. In prior years, this number included assigned grievance mediation cases and assigned collective bargaining mediation cases. These cases are 

sufficiently different as to warrant separation. 

4

 Mediated cases represent the number of cases in the FY where mediators have become active in the negotiations. In prior fiscal years, the Agency defined "active" as any 

case closed in the FY where the offer of mediation was accepted by the parties. The Agency "activity rate" has now been changed to reflect mediated cases as a percentage of 

closed cases rather than assigned cases. 

5

 As with assigned cases, this number is less than it was in prior years because the Agency determined that it was no longer appropriate to group collective bargaining 

mediation cases with grievance mediation cases. In prior years, this number included assigned grievance mediation cases and assigned collective bargaining mediation cases. 6

 Defined as the number of closed cases where there was at least one meeting divided by the number of total closed assignments. 7

 Defined as the number of active cases settled divided by the total number of active cases. 8

 Significant cases are defined as situations were the bargaining unit exceeds 1,000 or where the case will have a significant impact on interstate commerce (i.e. 

 utilities or defense contracting work). 

9

 Defined as the number of GM cases settled and closed within the fiscal year divided by the number of closed GM assignments (1675). 10 This number includes EM cases, plus dispute design cases (24), regulatory cases (8) and cases falling into the category of ‘other’ (70). These case types are included in the 

EM category because they were included in prior fiscal years. 

11 In order to increase their visibility in the labor-management community, FMCS requires all mediators to engage in outreach efforts, including meetings with labor and 

management representatives within their territory or jurisdiction. These kinds of activities include attendance at conferences, meeting with local and state officials to offer 

FMCS services, meeting union and company representatives at places of business, and lectures. 

 

PROGRAM SERVICES FY 2002 FY 2003 FY 2004 FY 2005

1. COLLECTIVE BARGAINING MEDIATION 

Assigned Cases2 19,303 19,516 18,4933 17,102 

Private Sector 17,266 17,568 16,738 15,489 

Public Sector (State and municipal) NA 1,329 1,295 1,160 

Federal Sector NA 619 460 346 

Mediated Cases4 6,757 6,640 4,7485 5,215 

Private Sector NA 4,912 3,274 3,847 

Public Sector (State and Municipal) NA 1,218 1,077 1,086 

Federal Sector NA 510 397 256 

Activity Rate6 35% 34% 26% 30% 

Number of Mediated Cases Settled 5,128 4,988 3,768 3,557 

Percentage of Mediated Cases 

Settled through FMCS7

75% 74% 79% 87% 

 Activity Rate in Significant Cases8 52% 50% 51% 47% 

2. GRIEVANCE MEDIATION 

Assigned Cases 1,011 1,419 1,639 1,705 

Mediated Cases 989 1,407 1,544 1,675 

Private Sector NA NA 1,168 1,334 

Public Sector NA NA 205 270 

Federal Sector NA NA 171 141 

Number of GM cases settled NA NA 1,264 1,212 

Percentage of Cases Settled 

Through FMCS9

NA NA 82% 72% 

3. RELATIONSHIP-DEVELOPMENT AND TRAINING 

Number of Training Classes Provided 2,618 2,594 2,281 2,257 

Private Sector 1,747 1,693 1,565 1,315 

Public Sector (State and Municipal) 871 901 599 749 

Federal Sector 213 117 117 

Percent of Training Surveyed NA NA NA Seeking OMB 

approval under 

PRA 

4. EMPLOYMENT MEDIATION 

Number of Employment Mediation 

Cases10

1,198 1,310 1,596 1,446 

Federal Sector 539 525 1,417 1,202 

Public Sector (State and Municipal) 31 8 5 47 

Private 430 628 174 79 

Percent of EM Cases Settled NA 59% 45% 48% 

5. OUTREACH 

Number of Outreach cases11 5,800 5,392 4,741 3,513 

 
8

 Program Services

Work Stoppage Information 

Fiscal Years 2001 Through 2005 2001 2002 2003 2004 2005 

Number of Work Stoppages Ending in FY 273 

Number of Work Stoppages Occurring Within FY 300 

Closed cases with work stoppages in FY 445 327 289 273 226 

Average duration of work stoppages in closed 

cases (number of days) 40.7 53.7 60.5 76.7 43 
9

Arbitration Services Program Data

Activity 2001 2002 2003 2004 2005 

 

Panel Requests 16,594 17,282 17,332 16,382 15,370 

Panels Issued 20 18,275 18,885 19,023 18,033 16,787 

Arbitrators Appointed 8,706 8,335 8,595 7,875 7,592 

 

Activity Charged For 2001 2002 2003 2004 2005 

Travel Days .43 .45 .48 .45 .46 

Hearing Days 1.15 1.09 1.15 1.09 1.15 

Study Days 2.40 2.44 2.35 2.37 2.40 

Total 3.98 3.98 3.98 3.91 4.01 

 

 20 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. 

Charges 2001 2002 2003 2004 2005

Per Diem Rate 693.12 720.75 763.87 801.59 835.62 

Amount of Fee 2761.04 2884.46 3047.54 3197.37 3,396.29 

Amount of Expenses 341.92 318.03 364.32 344.25 336.17 

Total Charged 3102.96 3202.49 3411.86 3541.62 3732.46 
10

 

 *

 Overtime pay issues included under this category are Economic: Wage Rates and Pay Issues. ** Included in this classification are issues concerning super seniority and union business. *** This classification also includes issues concerning safety. 

Arbitration Services Program Data 2001 2002 2003 2004 2005 

Total Number of Issues 1,902 1,989 2,314 2,581 2,629 

Specific Issues 

General Issues 434 463 506 417 308 

 Overtime Other Than Pay* 

 Distribution of Overtime 34 26 35 41 2 

 Compulsory Overtime 8 12 9 3 2 

 Other Overtime 10 10 12 1 4 

Seniority 

 Promotion & Upgrading 54 52 63 42 26 

 Layoff Bumping & Recall 46 48 71 69 57 

 Transfer 17 21 14 9 0 

 Other Seniority 25 25 35 15 8 

 Union Officers** 9 14 13 21 0 

 Strike & Lockout 3 2 1 2 1 

 Working Conditions*** 35 29 19 20 12 

 Discrimination 19 24 17 18 18 

 Management Rights 51 63 71 61 72 

 Scheduling of Work 43 67 47 61 62 

 Work Assignments 80 70 99 54 44 

 

Economic Wage Rates & Pay Issues 227 229 233 209 167 

 Wage Issues 29 36 42 95 134 

 Rate of Pay 53 60 60 33 7 

 Severance Pay 6 8 5 1 2 

 Reporting, Call- in & Call-back Pay 13 7 10 6 0 

 Holidays & Holiday Pay 31 26 21 14 8 

 Vacations & Vacation Pay 29 39 27 26 0 

 Incentive Rates & Standards 13 7 15 9 3 

 Overtime Pay 53 46 53 25 13 

 

Fringe Benefits Issues 69 99 112 104 100 

 Health & Welfare 29 58 61 46 47 

 Pensions 11 8 11 8 7 

 Other Fringe Issues 29 33 40 50 46 

 

Discharge & Disciplinary Issues 849 947 1091 996 937 

Technical Issues 81 86 97 69 47 

 Job Posting & Bidding 32 38 43 39 43 

 Job Evaluation 18 11 21 14 1 

 Job Classification 31 37 33 16 3 
11

 

Arbitration Services Program Data 2001 2002 2003 2004 2005 

Scope of Agreement 45 65 53 58 50 

 Subcontracting 29 41 36 44 42 

 Jurisdictional Disputes 8 14 5 7 7 

 Foreman, Supervision, etc. 5 8 9 7 1 

 Mergers, Consolidations, Accretion, Other Plants 3 2 3 0 0 

 

Arbitrability of Grievances 109 100 139 96 38 

 Procedural 76 60 102 62 68 

 Substantive 14 23 25 18 28 

 Procedural & Substantive 19 17 12 16 10 

 Other Arbitrability Questions 0 0 0 0 0 

Not Elsewhere Classified 88 115 83 97 75 
12

 

 

Pacific 140 151 129 132 142 

 Alaska 13 7 2 7 9 

 California 66 73 67 58 65 

 Hawaii 0 1 3 0 0 

 Oregon 28 31 12 25 26 

 Washington 33 39 45 42 42 

 

Miscellaneous 9 13 15 14 11 

 Philippines 0 0 0 0 0 

 Puerto Rico 1 2 7 0 3 

 Virgin Islands 4 10 6 14 7 

 Guam 0 0 0 0 0 

 Others 4 1 2 0 1 

 

New England 45 17 37 28 30 

 Connecticut 13 0 4 6 10 

 Maine 2 2 4 1 1 

 Massachusetts 12 9 8 11 9 

 New Hampshire 2 1 0 1 1 

 Rhode Island 6 3 8 3 5 

 Vermont 10 2 13 6 4 

 

Middle Atlantic 307 246 284 252 265 

 New Jersey 30 26 35 23 30 

 New York 121 71 97 80 74 

 Pennsylvania 156 149 152 149 161 

 

South Atlantic 385 375 457 449 447 

 Delaware 12 3 2 7 4 

 District of Columbia 36 35 50 56 85 

 Florida 112 125 124 146 140 

 Georgia 58 41 77 55 42 

 Maryland 29 49 48 55 54 

 North Carolina 29 29 37 31 22 

 South Carolina 14 14 21 19 11 

 Virginia 30 43 53 42 43 

 West Virginia 65 36 45 38 46 

Arbitration Services Program Data

Total Number of Cases 

State & Region 2001 2002 2003 2004 2005 

 

Mountain 123 115 136 118 109 

 Arizona 10 15 20 16 9 

 Colorado 40 30 47 30 39 

 Idaho 7 5 7 3 4 

 Montana 16 7 11 16 10 

 Nevada 13 31 23 31 16 

 New Mexico 26 19 20 19 25 

 Utah 5 5 6 2 5 

 Wyoming 6 3 2 1 1 
13

 

 

Arbitration Services Program Data

Total Number of Cases State & Region 2001 2002 2003 2004 2005 

East South Central 239 221 224 229 217 

 Alabama 57 51 49 66 81 

 Kentucky 81 66 71 57 54 

 Mississippi 32 20 24 18 19 

 Tennessee 69 84 80 88 63 

 

West South Central 237 308 321 266 289 

 Arkansas 40 53 53 44 52 

 Louisiana 23 43 40 38 39 

 Oklahoma 70 104 79 50 72 

 Texas 104 108 149 134 126 

Totals 2,514 2,669 2,746 2,581 2,629 

 

East North Central 715 950 796 841 823 

 Illinois 145 216 199 198 195 

 Indiana 63 84 55 83 82 

 Michigan 194 158 171 172 147 

 Ohio 224 413 274 330 315 

 Wisconsin 89 79 97 58 84 

 

West North Central 314 273 347 250 284 

 Iowa 68 51 67 36 49 

 Kansas 38 28 39 23 27 

 Minnesota 84 82 71 70 66 

 Missouri 94 89 121 103 113 

 Nebraska 19 12 17 5 13 

 North Dakota 8 4 23 11 11 

 South Dakota 3 7 9 2 5 
14