TABLE OF CONTENTS

PAGE NO.

I. INTRODUCTION

A. Agency Mission.........................................................................6

B. FMCS Services..........................................................................6

1. Collective Bargaining Mediation – Initial and

Successor Contract Negotiations........................................................6

2. Relationship Development and Training Programs................................7

3. Arbitration Services...................................................................7

4. Grants Program.........................................................................8

5. FMCS Institute.........................................................................8

6. Employment Mediation...............................................................8

7. International Training and Exchange ...............................................9

8. Youth Violence Prevention and Conflict Resolution.............................9

C. Nature of Collective Bargaining in FY 2003......................................10

D. GPRA Goals Achieved in FY 2003................................................11

E. Other Initiatives........................................................................12

1. Strategic Plan

2. Website

 3. Access to Neutrals

F. Summary.................................................................................14

II. COLLECTIVE BARGAINING MEDIATION..........................................15

A. Collective Bargaining Mediation Process..........................................15

B. FY 2003 Cases of Significance......................................................15

1. Pacific Maritime Association/International Longshore and 

Warehouse Union, AFL-CIO 

2. Verizon/International Brotherhood of Electrical Workers, 

AFL-CIO, and Communication Workers of America, AFLCIO

3. Northrop Grumman Ship Systems / Pascagoula Metal Trades 

Department, IBEW, IAM, and OPEIU

4. Regional Transportation District (RTD)/Amalgamated 

Transit Union 

5. Lockheed Martin Aeronautics/International Association of 

Aerospace and Machinists, Local 776

6. Minnesota Hospitals Association/SEIU

7. Waukesha Engine/IAM 

8. Williams Controls/UAW 

9. Southwest Washington Health District and Clark County 

Health Department/LIUNA
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10. San Francisco Ballet/International Association of Musicians 

C. Collective Bargaining Mediation Program Data.....................................25

III. INITIAL CONTRACT NEGOTIATIONS..................................................28

A. Initial Contract Negotiations and Processes.........................................28

B. Initial Contract Bargaining Data.....................................................29

IV. RELATIONSHIP DEVELOPMENT AND TRAINING PROGRAMS.................31

A. Relationship Development and Training Programs..................................31

B. FY 2003 Cases of Significance..........................................................31

1. Longmont Foods d/b/a ConAgra/UFCW Local 990 and

IOUE Local 1

2. Environmental Protection Agency/AFGE

3. Southeast Navy Regional Navy Command / American 

Federation of Government Employees (AFGE), 

International Association of Firefighters (IAFF), and the 

National Association of Government Employees (NAGE) 

4. Perkins School District 

5. Southern University Law School and Appalachian School 

of Law Mediation Training 

C. Program Data.....................................................................33

V. ARBITRATION SERVICES................................................................34

A. Arbitration Services....................................................................34

B. FY 2003 Accomplishments...........................................................34

C. Arbitration Program Data.............................................................35

VI. GRANTS.....................................................................................39

A. Grants Program.........................................................................39

B. FY 2003 Grant Funding Summary...................................................39

VII. FMCS INSTITUTE........................................................................41

A. Purpose and Course Offering

VIII. FEDERAL EMPLOYMENT MEDIATION...........................................42

A. Services Provided....................................................................42

1. Federal Employment Mediation...........................................42
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IX. INTERNATIONAL TRAINING AND EXCHANGE PROGRAMS..............43

a. Baltic Mediation Training Project

b. Mediation and Arbitration Services in Bulgaria

c. South Korea

d. Conciliation Institutions in Peru

e. Serbia and Montenegro

f. Argentina

g. Mozambique
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This	report	details	the	activities	of	this	agency	in	fiscal	year	2003.

Today,	technology	is	advancing	at	an	accelerated	rate,	re-defining	the	way	

business	is	done,	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.		

Since	my	confirmation	in	August	2002,	I	have	been	personally	involved	in	

two	high	profile	work	disputes with	a	significant	impact	on	the	nation’s	economy:

the	West	Coast	ports	dispute	between	September	and	November	2002,	and	a	

dispute	involving	Verizon Communications	Inc.,	in	July	through	August,	2003.		Both	

situations exemplify	the	issues	that	continue	to	plague	the	labor	management	

community,	in	particular,	the	use	of	technology,	the	desire	by	employers	to	

implement	cost-saving	technological	advancements, rising	health	care	costs,	and	the	

needs	of	business	to	respond	to	rapidly	changing	economic	conditions.					

Although	the West	Coast	ports	and	Verizon	disputes	received	significant	

publicity	during	fiscal	year	2003, our	field	mediators were	involved	in 6640	

collective	bargaining	disputes nationwide.		In	75%	of	those	cases,	we	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.		We	provided	relationship	development	and	

training	programs	2594 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-
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the-art	assistance	to	employers	and	employees	as	they	confront	the	challenges	of	

modern	labor-management	relations.

Peter	Hurtgen,	Director	
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I. INTRODUCTION

A. Agency Mission

For fifty-six 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. Their primary mission is to 

prevent or minimize interruptions to the free flow of commerce growing out of labor 

disputes and to assist these parties in improving their relationship. The core mission 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 to Promote Labor-Management Cooperation

5. Training for Labor and Management by the FMCS Institute for Conflict 

Management

6. Employment Mediation (Federal employment mediation and private sector 

employment mediation) 

7. Training and Exchange Programs for International Organizations and Government 

8. Youth Violence Prevention in Schools and Conflict Resolution 

1. Collective Bargaining Mediation: Initial and Successor Contract Negotiations

Collective bargaining mediation is a voluntary process that occurs when a thirdparty neutral assists the parties in reaching agreement in contract negotiations. This 

includes initial contract negotiations, which take place between an employer and a 

newly certified or recognized union representing its employees, and 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 2003, FMCS mediators were actively involved in 6640 collective 

bargaining contract negotiations in every major industry and service throughout the 

United States, a decrease of about 117 cases from last fiscal year. However, the number 

of contracts expiring this year was far less than last fiscal year. In FY 2002, 45,339

contracts expired. In this fiscal year, only 37,844 contracts expired, which explains the 

reduction in dispute activity. 
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For data regarding collective bargaining mediation in successor contracts and 

initial contract negotiations, and cases of significance in each category during this fiscal 

year, see Sections II and III.

2. 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. Since its inception, FMCS 

has offered relationship-building training programs designed to improve the labormanagement 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 mediation more effective. When such training is 

requested, the mediator determines the parties’ needs and designs a program that is 

specifically tailored for those parties. FMCS offers a wide array of these services to 

address workplace problems and in fiscal year 2003, this work represented 16% of our 

agency activity. FY 2003 data shows that the number of training programs provided is 

consistent with last fiscal year. 

Data from fiscal years 2000, 2001 and 2002 show that roughly 22% of collective 

bargaining agreements exceed 3 years in duration. This increase in contract duration has 

created a demand for training programs that emphasize the importance of collaborative 

working relationships. 

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 preventative mediation and cases of significance during this 

year, see Section IV.

3. Arbitration Services

National labor policy favors the settlement of contractual disputes by arbitration. 

When conflicts arise over the interpretation or implementation of a contract or 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 
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Symposia where arbitrators have an opportunity to discuss and share the latest 

information about their profession.

For FY 2003 data regarding arbitration services, see Section V.

4. Grants Program

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 labormanagement committees to develop innovative joint approaches to workplace 

problems. In the past, committees have focused their efforts on improving labormanagement 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 2003 data regarding the grants program, see Section VI. 

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, 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. 

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

Section VII.

6. Employment Mediation:

Outside the collective bargaining arena, FMCS has provided employment 

mediations services to the federal sector and to other 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, 

 1 Section 205A(a)(1).
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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. We provide consultation, training, dispute 

resolution systems design and facilitation services to many federal agencies, and to 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. 

7. International Training and Exchange: 

Our work extends 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. 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 affecting the global 

economy. As a result, we are 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 VIII.

8. Youth Violence Prevention and Conflict Resolution: 

This program provides a means of nonviolent conflict resolution for students and 

school staff. Stakeholders from each community, including teachers, parents, students 

and law enforcement officials work collaboratively with mediators to develop unique 

software applications (using the Agency’s TAGS system) for each community. The goal 

is to improve the school environment by helping students and staff address underlying 

conflicts that are at the root of disputes that become violent or hurtful. Since its inception 

in fiscal year 2000, the Youth Violence Prevention and Conflict Resolution program has 

expanded from six communities to 10 communities, representing a cross-section of our 

nation’s youth. 

In fiscal year 2003, we held a stakeholders meeting to determine how various 

communities were utilizing the program. The University of North Texas published a 

paper evaluating the program and found that, using TAGS, communities, schools, 

parents, teachers and students are very effective in airing differences through constructive 

online problem-solving and anonymous surveys. One site used TAGS to administer a 

tolerance survey to address students’ beliefs about barriers among groups and supported a 

“youth court” for students to track court cases of juvenile offenders. A second 

community used TAGS to administer student surveys on tobacco use, providing 

information to school administrators about student perceptions. A third community 

designed a project Web site that allowed anonymous reporting of vandalism. A fourth 
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community created a “Teen Mediafest,” encouraging students to generate creative 

messages to their peers addressing violence, mental and physical health, and drug and 

alcohol use. Finally, one FMCS community partner received the Illinois Governor’s Cup 

Award, recognizing outstanding community effort in youth violence prevention.

While TAGS technology is extremely useful for higher level elementary and 

middle school age children, the technology is too advanced for younger children. As a 

result, during this fiscal year, we developed an interactive CD-ROM prototype aimed at 

teaching conflict resolution skills to pre-school and elementary school children. 

C. Nature of Collective Bargaining in FY 2003

As the nation’s economy tightened, but appeared slowly headed toward recovery, 

the war in Iraq created new economic concerns. Those concerns, coupled with the 

lingering impacts of 9-11, continued dramatic increased health insurance costs, pension 

cost pressures caused by dramatic declines in financial markets and an aging workforce, 

technological changes impacting the nature of the work and where the work is performed, 

as well as increased global competition, impacted collective bargaining negotiations over 

the last year. 

Fiscal year 2003 was a critical bargaining year, with major contracts expiring in 

the following industries: aerospace, defense, transportation, shipping, 

telecommunications, food manufacturing, construction, health care, as well as federal, 

state and local governments. While the West Coast ports and Verizon disputes remained 

in the public eye, mediators were actively involved in 6640 collective bargaining contract 

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

fiscal year. With our assistance, 4988 contracts were reached. As a result, 75% of our 

dispute cases resulted in negotiated settlements. 

With respect to work stoppages, there were 289 work stoppages during this fiscal 

year. The West Coast ports dispute involved a work stoppage of approximately 10 days, 

with a significant impact on the nation’s economy.

2 We have been actively involved in 

settling severe work stoppages around the nation, including a 14 day strike involving 

4000 Lockheed Martin machinists who manufacture F-16 fighter jets, a series of one-day 

rolling strikes by 6000 service and maintenance employees working in 14 

Minneapolis/St. Paul hospitals and clinics, and a 55-day strike among 500 employees 

employed by Waukesha Engine. 

We have been equally successful at averting strikes. We averted a work stoppage 

at Verzion, where a strike would have involved close to 80,000 employees and phone 

service in 13 states. Strikes were also prevented in a defense-related dispute involving 

10,000 Northrop Grumman Ship Systems employees, and 2000 employees of the Denver 

Colorado Regional Transportation District, which provides mass transit to 250,000 riders. 

 2

 Collectively, the West Coast ports handle close to $300 billion dollars a year of goods to and from the 

United States. The closure of the ports for 10 days had a substantial impact on the economy. See Section 

II, infra, for more information regarding the West Coast ports dispute and its impact on the economy.
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D. GPRA Achievements: 

The Government Performance and Results Act requires all federal agencies to 

identify performance goals. For every service provided, we identified specific goals for 

fiscal year 2003 and the chart below identifies our performance during this fiscal year: 

Service Goals/Objectives Actual Performance

Dispute Mediation 1. Close 14,740 cases 1. Closed 19,306 cases

2. Assign 32.9% of active 

cases3 2. Assigned 34% of active cases

Arbitration Services 1. Provide 19,021 panels 1. Provided 19,039 panels.

2. Average number of days 

between receipt of request 

and panel provided should 

not exceed 5 workdays

2. Average workdays 7.61

from receipt of panel 

request to panel provided 

Employment Mediation

(conflict resolution 

services to state, local and 

federal government 

sectors and private sector)

1. Close 829 cases 1. Closed 1,310 cases 

2. Monitor number of 

participants exposed to

dispute resolution 

techniques 

2. 7,077 participants 

exposed to dispute 

resolution techniques

3. Settle 60% of non-EEOC 3. 47% of non-EEOC

settled 

4. Settle 52% of EEOC 

cases 

4. Settled 50% of EEOC

cases 

Regulatory Negotiations 1. Close 5 regulatory 

negotiations 

1. Closed 34

2. Assist 75 organizations 2. Assisted 122

organizations

International Efforts 1. Assist 75 foreign 

governments 

1. Assisted 60 foreign 

governments

FMCS Institute 1. Provide 12 courses 1. Provided 13 courses 

Grants Program 1. Provide 18 grants to 

labor-management 

committees 

1. Provided 13 grants5

 3 The Agency does not assign every active case to a mediator. An active case is defined as one where an F7 has been filed. However, not every case is assigned to a mediator. We assign cases where the bargaining 

unit is in excess of 15 or the case involves an initial contract. 

4 There is an increase in the number of private and public faciliators to perform the highly technical task of 

faciliating regulatory negotatiations. Some of the Agency’s work has gone to other mediators.

5

 We awarded fewer grants this year because of a policy decision to assign a larger number of grants to 

industries, and those grant receipients received maximum funding allowable. As a result, there were fewer 

grant recipients, but receiving larger grant funding.
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Service Goals/Objectives Actual Performance

Regional LaborManagement Conferences 1. Conduct 75 Agencysponsored conferences at 

regional level 

1. Conducted 67 Agencysponsored conferences at 

the regional level

In addition to the above chart, it should be noted that the Agency continues its 

success rate in dispute cases. In this fiscal year, we settled 75% of our collective 

bargaining mediation cases. Although we were unable to secure collective bargaining 

agreements in 25% of our cases, this does not mean that we were not otherwise 

successful. In this regard, the mediator could have assisted the parties in reducing the 

number of open or unresolved issues.

Another important measurement of success includes the number of times the 

labor-management community consented to a mediator’s intervention. As noted above, 

not every case is assigned to a mediator. Once a case is assigned, the mediator contacts 

the parties to offer his/her assistance. Even where cases are assigned to mediators and the 

mediator offers assistance, the parties must consent to the mediator’s intervention. 

Mediation is a voluntary process and even a skilled mediator cannot intervene in the 

absence of consent. 

Bearing this in mind, in fiscal year 2003, we assigned 19,516 cases to mediators. 

It is presumed that, in each case, the assigned mediator contacted the parties and offered 

his/her services to resolve the dispute. Of those assigned cases, the parties accepted 

mediation 6640, roughly 34% of the time, consistent with last year’s rate of 35%. Over 

the next fiscal year, we will work to improve our penetration rate by continuously 

educating the public about the mediation process and its advantages in order to increase 

the number of situations where our services can be utilized and work stoppages avoided.

E. New Initiatives:

1. Strategic Plan:

The Agency’s five-year strategic plan was recently approved by the Office of 

Management and Budget. To chart the Agency’s future course, we looked at certain 

trends that have a significant impact on the workplace including (1) the cost and 

complexity of health care; (2) the effects of globalization on the workplace; (3) the 

application and importance of technology in the workplace; and (4) workplace litigation 

and conflict focusing on individual employees outside the scope of collective bargaining 

and focusing on individual employees. With these factors in mind, we crafted our 

strategic goals, which focus on: 

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; 
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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; and 

5. Sharing knowledge gained from the Agency’s experience in workplace conflict 

resolution with those outside of the workplace context such as schools, courts, and 

international organizations.

The Agency’s plan details the strategies we will employ to achieve these goals 

and our annual performance plans will address specific performance measurements we 

will use to determine our success in each area. 

2. Web site 

In fiscal year 2003, the Agency launched its new Web site. The Web site was 

designed with the President’s Management Agenda E-government Initiative in mind: it 

affords the public easy access to the Agency and its programs. The Web site provides a 

wealth of information about each Agency department and the services available to the 

labor-management community. The Web site has the following capabilities: 

• On-line filing of statutorily-required contract expiration notices (F-7 forms) 

through the website; 

• On-line filing of arbitration panel requests;

• On-line filing of grant applications; 

• On-line quarterly submission of grantee progress reports; 

• On-line registration for Institute courses; 

• Publication of FMCS-related Federal Register announcements;

• Repository of all Agency reports to Congress, including Annual Reports, 

Performance Plans and Strategic Plans;

• Regular updates on cases of national significance (i.e., West Coast Ports dispute 

and current Verizon dispute) with links to newspaper articles of interest;

• Video messages from the Director, speeches delivered by staff members, and 

articles published by employees; 

• Links to TAGS e-conferences; 

• Cases of interest and best practices are regularly posted; and 

• Communication for the public, via e-mail, to Agency personnel.

3. Access to Neutrals Program

In FY 2003 we proposed a registry of neutrals program. The purpose of the 

initiative is to develop a register of individuals, approved by the Agency, to whom we 

can refer employment-related disputes (i.e., EEO cases) where the Agency might be 

unable to assign a mediator to attend to that dispute. A description of the program was 

published in the Federal Register in May 2003. We have reviewed all of the public 
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comments and, during fiscal year 2004, we will meet with interested parties to address 

questions and issues related to implementation of the program. 

F. Summary

All FMCS activity is aimed at promoting and improving conflict resolution and 

collective bargaining processes in the United States. This helps American businesses 

become and remain more competitive in the international marketplace and increases the 

quality of working life of American workers. Through collective bargaining mediation, 

FMCS averts or minimizes the impact of work stoppages on the U.S. economy, either in 

initial bargaining relationships, or in mature bargaining relationships. Relationship 

development and training programs offer labor and management the skills to improve 

long-term workplace relationships. Arbitration provides the internal jurisprudence that 

helps the parties administer their collective bargaining agreements. The grants program 

promotes innovative, joint approaches to building effective labor-management 

relationships. Through federal employment mediation, FMCS helps government 

agencies reduce the likelihood of litigation, speeds up federal processes, and improves the 

delivery of regulated government services. Our international training and exchange 

program offers training to foreign governments in these same techniques, promoting the 

establishment of sound labor-management relations and conflict resolution systems in 

strategic areas of the world. 

The complexity of issues in today’s collective bargaining arena requires us to play 

an increasingly important role in critical negotiations and in guiding the parties to 

constructive agreements. 
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II. COLLECTIVE BARGAINING MEDIATION: 

A. Mediation Process: 

Collective bargaining mediation is a voluntary process which occurs when a thirdparty neutral assists the parties in reaching agreement in contract negotiations. This 

includes initial contract negotiations, which take place between an employer and a newly 

certified or recognized union representing its employees, and negotiations for successor 

collective bargaining agreements. 

FMCS mediators are in touch with both parties even before negotiations begin. 

The first contact with a mediator is triggered by the legally required notice of intent to 

open a collective bargaining agreement, or a certification. During negotiations, mediators 

use their skills to guide the parties to a settlement acceptable to both sides. Mediators 

may make suggestions, and offer procedural or substantive recommendations with the 

agreement of both parties. Their primary tool is the power of persuasion. Their 

effectiveness derives from their status as respected neutrals, their acceptability to the 

parties, their broad knowledge and experience in the process of collective bargaining, and, 

especially, the quality of their ideas, suggestions and perspectives. 

B. FY 2003 Cases of Significance:

1. Pacific Maritime Association//International Longshore and Warehouse Union, 

AFL-CIO 

Fiscal year 2003 began with the West Coast ports dispute. The dispute involved 

10,500 longshoremen and clerks represented by the International Longshore and 

Warehouse Union, and employed by various terminal operators, stevedores, and shipping 

companies at 29 ports stretching from Seattle to San Diego. Collectively, the companies 

constitute a multi-employer association known as the Pacific Maritime Association 

(PMA). The challenging issue for these negotiations was technological advancement and 

the corollary effect on job security for union members. The public became aware of the 

dispute shortly after the July 2002 contract expiration, when it became increasingly 

apparent that the flow of goods could be halted. Over the next five months, the U.S. and 

the world economy were disrupted by the dispute, which included a 10-day closure of the 

West Coast Ports. Viewing the closure of the ports as a threat to the health and safety of 

the nation, the President of the United States elected to invoke the Taft Hartley Act for 

the first time in 24 years. 

The 29 West Coast ports collectively handle nearly half of the container cargo 

entering or leaving the United States, with goods valued at more than $300 billion a year. 

It is the entry point for electronics, automobiles, auto parts, apparel, and toys from Asia. 

The timing of the dispute, arising in July 2002 and continuing through October, impaired 

the ability of the U.S. economy to recover from the recession, as these months are crucial 

for the nation’s retailers to prepare for the Christmas season. 

The members of the PMA, a multi-employer association representing terminal 

operators, stevedore, and shipping companies, conduct business in a highly competitive 
16

environment. Success in this industry is measured by the ability to rapidly and 

economically move cargo on and off vessels. As dock space became increasingly 

limited, the efficient movement of cargo required implementation of technology to 

facilitate the processing of cargo. 

Prior to 2002, implementation of technology had been uneven and unequal 

throughout the 29 ports. To address these challenges, the PMA proposed technological 

changes that would significantly alter the nature of the waterfront work, allowing them to 

operate efficiently, and compete globally. The union perceived these changes as a threat 

to job security. Accordingly, the union’s response to management’s bargaining demands 

included work preservation, wage increases for its current members, and improvements 

to pension plans.

July 1, 2002 – Contract Expiration and Weekly Extensions

Through September:

The parties commenced negotiations close to three months before contract 

expiration, with no settlement of the primary issues. On July 1, 2002, the contract 

covering the docks’ 10,500 employees expired. The parties agreed to weekly contract 

extensions until early September, when the PMA alleged that the union was staging a 

slowdown and paralyzing operations. 

FMCS mediators were in constant contact with the parties from the time 

negotiations began. When it was clear that a crisis could not be averted, the parties 

agreed to the active participation of our mediators. In October 2002, Secretary Treasurer 

of the AFL-CIO, Richard Trumka, joined the negotiations. 

September 29 to October 9, 2002 - The Lockout and Mediation Attempts: 

On September 29, 2002, the PMA locked out 10,500 employees alleging that they 

had engaged in a slowdown to pressure the employers in the negotiations. The union 

denied that it staged a slow down and instead argued that its members were adhering to 

contractually and federally mandated safety rules. The lockout resulted in significant 

cargo backups and delayed shipments, resulting in higher costs for thousands of retailers 

and manufacturers. Over 220 ships were essentially “parked” in the Pacific Ocean 

awaiting unloading, while exporters were forced to ship their goods with expensive air 

freight and others lost orders from the United States because earlier shipments were held 

in port terminals. Some shipping companies ceased sending vessels to the West Coast 

because of container shortages. Director Peter J. Hurtgen arrived on the West coast 

shortly before the lockout began. He and his representatives, including the Deputy 

Director and the local mediator, engaged in round-the-clock mediation efforts to resolve 

the dispute. 

On October 6, 2002, the Director concluded negotiations close to midnight. The 

parties were unable to reach agreement or to extend the existing contract. 
17

October 7, 2002 – Invocation of Taft Hartley Board of Inquiry Provisions: 

On October 7, 2002, the President of the United States invoked the Taft Hartley 

Act to commence the process of reopening the ports and ending the lockout. 

` Section 206 of the Taft Hartley amendment to the National Labor Relations Act 

allows the President of the United States to appoint a Board of Inquiry if a strike or 

lockout affects an entire industry, or a substantial part thereof, which may “imperil the 

national health or safety.” Upon receipt of the Board of Inquiry’s written report of the 

factual elements of the dispute, Section 208 allows the President to petition a district 

court to enjoin any strike or lockout that, if permitted to continue, “imperils national 

health or safety.” On October 7, 2002, the President signed an Executive Order creating 

a Board of Inquiry under Section 206 of the statute. The Board consisted of former 

Tennessee Senator Bill Brock, and Professors Patrick Hardin and Dennis Nolan. The 

Board of Inquiry immediately commenced a closed-door fact finding mission, inquiring 

into the issues involved in the dispute and ascertaining the causes and circumstances 

thereof. On October 8, 2002, the Board of Inquiry fulfilled its statutory mission and 

submitted a written report to the President. The Act does not allow the report of the 

Board to contain recommendations.

October 10, 2002 – Invocation of Taft Hartley “National Emergency” Injunction:

On October 10, 2002, after submission of the Board of Inquiry report, the 

President, through the Attorney General, sought a temporary restraining order under 

Section 209 of the statute enjoining both parties from engaging in any job action that 

would interfere with the continuation of dock work, including a management-led lockout

or a union-supported slow down. The President cited economic damage from the lockout 

and the war on terrorism as a threat to the nation’s health and safety. Although the 

parties agreed to continue processing military cargo during the lockout, Defense 

Secretary Donald Rumsfeld, in a sworn statement, asserted that a prolonged port closure 

could "degrade military readiness, hinder the department's ability to prosecute the global 

war on terrorism, and undercut other defense needs and world-wide commitments." On 

October 10, 2002, United States District Court Judge Alsup issued a temporary 

restraining order reopening the ports and sending employees back to work. The judge 

scheduled a hearing for October 16, 2002, to determine whether a permanent injunction 

mandated the statutory 80 day cooling off period. 

October 10 – October 16, 2002 - The Ports Re-Open: 

Under court order, employees returned to work and commenced the task of 

processing cargo, while the Director and his representatives continued their attempts to 

mediate an acceptable solution to the dispute. 

Employees continued to work under court order, but with an understanding from 

the judge that if the union encouraged or participated in a slow down, the union could be 
18

held in contempt and ultimately face potential fines. The PMA continued to claim that 

employees engaged in a slowdown and forwarded productivity data to the Justice 

Department supporting its claim. The union asserted that productivity and cargo 

movement was slow because of the significant backlog of work, and blamed the PMA for 

the lockout that caused the backlog. The union maintained its position that it was 

complying with federally mandated safety requirements when performing assignments 

and that it was not engaged in a slow down. 

October 16, 2002: Judge Orders Permanent Injunction

and 80 Day Cooling Off Period: 

On October 16, 2002, Judge Alsup issued a permanent injunction that kept the 

ports open for the full 80 day cooling off period while the union and the PMA continued

negotiations with the Director and his representatives. 

NLRB Prepares for “Final-Offer” Election During 

Cooling Off Period While Director Mediates: 

While the Director continued mediating the dispute under a tight timeline, the 

National Labor Relations Board prepared for a “final offer” election under Section 209(b) 

of the statute. The statute requires that, upon the issuance of a court order enjoining a 

work stoppage, the parties have 60 days in which to resolve the dispute. At the 

conclusion of the 60 day period, the parties’ positions are to be reported to the President 

of the United States by the Board of Inquiry, along with efforts made to settle the case, 

statements by all of the parties, and a statement of the employer’s last offer. Within 15

days thereafter, the NLRB is statutorily mandated to hold a secret ballot election on 

whether employees wish to accept the final offer. Due to the strict timelines involved, 

the parties continued the mediation process with the Director while the NLRB prepared 

its Regional offices up and down the coast to hold a last offer election. 

November 4, 2002 - Tentative Agreement Reached on Technology Issues: 

After 3 weeks of ongoing negotiations, tentative agreement was reached covering 

the technological issues. The agreement in essence allowed the PMA to implement 

technological changes, but with notice requirements to the union and arbitration 

procedures to resolve disputes consistently throughout the ports. Any technological 

change, after notice to the union, may be submitted to a joint labor-management 

technology committee for their recommendation. In the absence of agreement by the 

committee, either party can file for arbitration, first through an area (or local) arbitrator, 

but with appeal rights to a “coast” arbitrator. Review by a coast arbitrator satisfied one 

important objective: ensuring consistent, uniform, and efficient technological changes 

industry-wide and an end to the practice of unequal and uneven implementation of 

technology. Although the union secured the return of previously transferred rail and yard 

planners, the introduction of new technology, in the short term, would cost the union 400 

positions through retirement and transfers to other duties. Despite resolution of this 

significant issue, other issues remained, including pension benefits, and wages. 
19

November 5 – November 12, 2002 - Director Calls a One Week Recess:

The parties continued negotiations on the outstanding issues, but, under 

advisement from the Director, recessed negotiations for one week. Under instructions 

from the Director, PMA used the recess to collect data calculating the potential savings 

from the technological changes and evaluating the savings against the cost of enhancing 

pension benefits, health care coverage, and wages for remaining employees. 

November 24, 2002: Parties Reach Final Agreement:

Following close to two weeks of continuous negotiations mediated by the 

Director and his representatives, and a mere three weeks prior to the expiration of the 

cooling off period, the parties reached full agreement. The six-year agreement guarantees 

stability on the ports for a significant period. The contract guarantees job security for all 

existing clerks, increases in pay and benefits, continuation of full medical coverage, and 

pension increases. The contract was ratified by the largest margin in the union’s history, 

the injunction was discharged, and the “final offer” election was canceled, so ending the 

most costly labor dispute in 25 years. 

2. Verizon/International Brotherhood of Electrical Workers, AFL-CIO, and 

Communication Workers of America, AFL-CIO

Verizon is the nation’s largest telephone company, employing approximately 

78,000 technicians and telephone operators represented by the IBEW and CWA in 13 

states stretching from Virginia to Maine. Collective bargaining agreements with both 

unions expired in August 2003, and the membership authorized a strike upon contract 

expiration. An 18-day strike in 2000 led to a backlog of 250,000 repairs and new phone 

orders that took months to process. A strike in this case would primarily affect 

installation of new phone lines, repairs, and ability to reach directory-assistance 

operators. Seeking to avoid another strike, the Director called all parties to Washington 

to commence mediation directly with him. 

The parties in this case wrangled over issues plaguing collective bargaining 

negotiations in the last few years: the rising cost of health insurance, and how to balance 

job security with the company's need to respond to a tough economy and fierce 

competition. Regarding health insurance costs, citing a 12% increase in health insurance 

costs, Verizon proposed that its employees contribute more toward their health coverage 

when they previously contributed about 5 percent of the cost. Simultaneously, Verizon 

sought greater flexibility to reduce and relocate its workforce. The expired contract 

allowed for no more than a 0.7% annual workforce transfer unless faced with pressures 

from “an external event.” The company now demanded an increase to 8%. This demand 

came on the heels of an arbitrator’s award, issued a few weeks prior to contract 

expiration, ordering Verizon to reinstate and make whole 2300 laid off workers because 

the company violated the job security provisions when it laid them off. The arbitrator 

rejected the company’s argument that new technology, increased competition and 
20

changing government policy was equivalent to “external factors” permitting the layoffs. 

Verizon continued to demand the right to lay off employees in shrinking business areas, 

such as traditional land-line telephone business, and expand it in faster growing areas 

where the company faces stiff competition, such as wireless and high-speed Internet 

access businesses. 

The unions resisted changes in the health insurance costs partially because the 

company posted profits in the second quarter, immediately prior to contract negotiations. 

As for job security, the unions wanted to maintain the expired contract language 

regarding job transfers, and sought an assurance that employees who lose their jobs in 

one area can obtain reassignment to another part of the company. 

Amidst these positions, bargaining commenced with the Director and Northeast 

regional management about 5 days prior to contract expiration. Talks continued in 

Washington, while local bargaining committees met in other parts of the Northeast. 

Negotiations continued for 10 consecutive days, including weekends and late night 

sessions. After a 2 week hiatus, the parties returned to the bargaining table with the 

Director and reached agreement on September 4, 2003. Verizon’s vice president praised 

the Director’s “insightful approach” and the Unions similarly saluted the Director’s 

“dedicated efforts, experience and professionalism” in helping the parties resolve the 

contentious issues. 

3. Northrop Grumman Ship Systems / Pascagoula Metal Trades Department, 

IBEW, IAM, and OPEIU

Northrop Grumman is a $15 billion, global aerospace and defense company, 

providing products and services in defense and commercial electronics, systems 

integration, information technology and non-nuclear shipbuilding. Northrop Grumman 

Ship Systems (NGSS) is a division of Northrop Grumman, headquartered in Pascagoula, 

Mississippi. The group includes the Ingalls Operations and the Ship Systems Full 

Service Center, located in Pascagoula, and the Avondale Operations, located in New 

Orleans, Louisiana, Tallulah, Louisiana, and Gulfport, Mississippi. NGSS employs more 

than 17,000 shipbuilding professionals and is one of the nation's leading companies for 

the design, engineering, construction, and support of major surface ships for the U.S. 

Navy, U.S. Coast Guard, international navies, and commercial vessels of all types. Of 

these 17,000 employees, 10,000 are represented by 13 different labor unions (9 Metal 

Trade Unions, and locals of the IBEW, OPEIU, and IAM). Contracts in these units 

expired in late February 2003. 

In November 2002, the parties commenced negotiations with the assistance of a 

mediator. The parties met daily in mid-February 2003 in order to reach agreement prior 

to contract expiration. 

Throughout the 78 meetings held with the parties, complicated issues pervaded 

the negotiations, the most significant of which included health care premiums, drug costs 

and plan designs, wages, holidays, contract language, and contract duration. On February 

24, 2003, tentative agreements were reached with the Metal Trades Council (9 of the 
21

unions involved), and, soon thereafter, agreements were reached with the remaining 

unions. 

Ratification votes failed in every unit, and all unions had strike-vote 

authorization. FMCS immediately invoked a 14-day cooling off period and asked all 

parties to return to negotiations to avoid a highly disruptive work stoppage, that had the 

potential to affect the economies in three states and impact on the impending war in Iraq. 

With FMCS intervention and intense negotiations, all 13 unions reached 4 year 

agreements with NGSS and the contracts were ratified. The parties agreed to some of the 

most progressive and innovative agreements in the shipbuilding industry. They will form 

a joint labor-management committee to develop and implement a variable pay/gain 

sharing plan, and have formed a joint task force to address health care issues in order to 

avoid similar problems during successor contract negotiations. 

4. Regional Transportation District (RTD)/Amalgamated Transit Union 

Regional Transportation District (RTD) provides bus and light rail service for the 

Denver metropolitan area. Approximately 250,000 riders utilize the service on a daily 

basis. For many riders, it is the only means of public transportation. A strike, involving 

2000 unionized employees, would have significant impact on Denver and surrounding 

communities.

The contract expired in December 2002, and a strike was threatened months 

earlier. Bargaining commenced in November 2002 and the FMCS became active in the 

dispute in January 2003. Colorado’s designated state mediator participated as well.

Mediation commenced with over 100 open issues, but these were quickly 

narrowed to 20 in three negotiation sessions. Both sides prepared for a strike despite this 

progress. The Employer’s final offer was rejected in March 2003, and the contract was 

extended for another month. The media soon gained an interest in the dispute, as the 

strike issues narrowed to wages, overtime pay, health insurance, management rights, and 

workplace policies. 

Hours before contract expiration, while employees readied for picketing, an 

agreement was reached resolving all outstanding issues. The morning news programs 

announced the successful resolution of the dispute. 

5. Lockheed Martin Aeronautics/International Association of Aerospace and 

Machinists, Local 776

Lockheed Martin Aeronautics manufactures F-16 fighter jets in Fort Worth, 

Texas. The company employs 14,000 workers, of which 4000 are represented by the 

IAM. Historically, the parties’ relationship grows increasingly adversarial during 

contract negotiations. The local mediator contacted the parties two weeks prior to 

contract negotiations, but the parties resisted mediation efforts at that time. 
22

FMCS mediators became actively involved in the dispute about a week prior to 

contract expiration. The principle issues centered on the company’s compressed work 

proposal and a new health care plan. The union resisted a compressed work schedule, 

was opposed to a new health care plan, and proposed increases to wages and pension plan 

benefits. Negotiations proceeded for five consecutive days under FMCS auspices when 

the company delivered its final offer. The Union presented the offer to its membership 

without a recommendation. The membership rejected the offer and voted to strike. 

The strike attracted media attention, and continued for one week, when the 

mediator invited the parties to return to the table. Thirteen days into the strike, the parties 

returned to negotiations with the mediator and tentative agreement was reached on the 

14th day of the strike. 

6. Minnesota Hospitals Association/SEIU

The Minnesota Hospitals Association (MHA) is a multiemployer association 

consisting of fourteen hospitals and large clinics in the Minneapolis/St. Paul metropolitan 

area. All of the hospitals are represented by Service Employees International Union, 

Local 113, who represents more than 6000 service and maintenance workers at the 

fourteen MHA facilities. 

The collective bargaining agreements covering all the SEIU units were scheduled 

to expire in late February 2003. Despite multiple negotiation sessions, little progress had 

been made, and in early February, MHA requested the assistance of the mediator. The 

Union opposed mediation at the time but assured the mediator, and MHA, that it would 

assent to mediation prior to any work stoppage. In mid-February, following the filing of 

appropriate notices with FMCS and the affected MHA institutions, the Union 

commenced informational picketing at selected MHA institutions, amidst widespread 

media coverage. 

Throughout February, the assigned mediator and Regional leadership of FMCS 

monitored the progress of negotiations. When the contract expired, the Union consented 

to mediation. Negotiations were extremely complex, they were attended by over one 

hundred participants, and the parties remained far apart. More than fifty issues remained 

open and little progress was made. The Union continued to demand their economic 

package, and other issues including contract duration and a neutrality agreement in future 

organizing campaigns. Negotiations stalled in March, with no future mediation sessions 

formally scheduled, yet the mediator maintained daily contact with both sides. After 

some time, the mediator asked the parties to return to the table and the mediator 

continued efforts to move the parties toward agreement. The Employer presented the 

Union with a final offer. Shortly after receipt of the final offer, the Union filed unfair 

labor practice charges with the NLRB and simultaneously filed one day strike notices on 

selected MHA institutions. They did not submit the offer for a vote by the membership. 

The media showed interest in the dispute particularly when the strike notices continued 

and the first of the one-day strikes occurred in the middle of April. 
23

Despite the mediator’s attempt to generate movement by the parties, both sides 

remained firm. Concerned that no additional meetings were formally scheduled, the 

mediator persuaded the principal spokespersons to attend a meeting at the FMCS offices 

in Minneapolis. During this meeting, it became clear that there was a miscommunication 

between the parties regarding the final offer: the Union believed that the entire final offer 

“expired” on April 6, while the Employer contended that only certain parts of the offer 

expired on that date. The Employer requested that the final offer be submitted to the 

membership for a vote, while the Union indicated a desire to expand the rolling strikes’ 

duration from one to multiple days. Convinced that the dispute was in danger of 

escalating and concerned about the parties’ ability to bring closure to the negotiations 

without significant economic and community disruption, the mediator explored different 

package options with the parties. The mediator persuaded the parties to meet face-to-face 

as a means to halt the escalation of the conflict. 

When the parties met again with the mediator, the mediator suggested a 

“package” option to resolve the principal issues separating the parties, including wages, 

health insurance, pension and a neutrality agreement. At the conclusion of a long 

mediation session, a new package was outlined and the Union agreed to submit it to its 

membership. The contract was ratified, averting a work stoppage that would have 

affected not only the employees, but access to health care for the residents of the Twin 

Cities. 

7. Waukesha Engine/IAM: 

Waukesha Engine produces diesel engines and employs 800 workers, of which 

500 are represented by the Union. The highly skilled, unionized workforce is responsible 

for maintenance, welding and assembly of complex engines. The Union has represented 

these employees for over 50 years and, in the past, had a positive working relationship 

with the company. 

Waukesha Engine has been a profitable operation for many years, and as a result, 

employees have generally enjoyed superior wages and benefits. However, when 

negotiations commenced in January 2003, the company, while acknowledging profits, 

proposed $5 million dollars in “cost-saving” measures, including changes to the health 

insurance programs, layoffs out of seniority, and elimination of paid lunches for all 

employees. The company maintained that any contractual increases must be offset by 

corresponding “cost-savings” reductions. 

Although the parties resolved some issues without mediation, significant contract 

language issues and economics were unresolved when FMCS was asked to join the 

negotiations. The company maintained its demand for $5 million dollars in cost savings,

while the Union searched for these savings in areas that would be acceptable to the 

membership. In May 2003, the Union submitted the company’s “final offer” to 

membership for a vote. The offer was rejected and the membership voted to strike. The 
24

strike began the afternoon of the vote and the company immediately hired 200 temporary 

replacements. 

Almost 45 days into the strike, and after several mediated sessions, the 

membership rejected an ‘amended’ proposal. The company was prepared to declare 

impasse and implement its final offer. The mediator asked the parties to return to the 

table and worked with the parties to fashion an acceptable resolution. A contract and 

strike settlement was reached, 55 days into the strike. 

In addition to the economic harm of the strike, there has been a significant 

deterioration of the good-will that existed between the parties prior to this labor dispute. 

The parties’ historic labor-management partnership is now a memory, and many 

cooperative efforts have been abandoned. With the contract now ratified, we will extend 

our efforts to help the parties re-establish a good working relationship.

8. Williams Controls/UAW 

The employees of Williams Control have been on strike since September 2002. 

Since that date, the mediator has been actively involved in negotiating a settlement of the 

contract terms and a strike settlement. The most significant issue involved health 

insurance for retirees, and ultimately the right of the economic strikers to return to work. 

During the strike, the Union filed unfair labor practices with the NLRB, but during the 

course of the NLRB’s investigation, it became evident that the statutory strike notice was 

not timely filed with the FMCS thereby affecting the statutory protection of the strikers 

and their reinstatement rights. In August 2003, almost a year after the strike began, the 

parties entered into a 5-year contract, allowing retirees to maintain their health insurance, 

and allowing the strikers to return to work within a four month period. 

9. Southwest Washington Health District and Clark County Health 

Department/LIUNA

Southwest Washington Health District employed 120 employees represented by 

LIUNA. These employees were scheduled to transfer to Clark County Health 

Department by January 2003. In September 2002, the FMCS was asked to mediate an 

interagency transfer agreement that eased the transition from Southwest Washington 

Health District to the Clark County Health Department. Using interest-based bargaining 

techniques, the mediator facilitated a transfer agreement by January 1, 2003. 

Once the transfer was complete, the FMCS was asked to mediate the first 

collective bargaining agreement between LIUNA and the Clark County Health 

Department. Using interest-based bargaining techniques, and an existing contract from 

an OPEIU bargaining unit in Clark County, the parties negotiated each provision of their 

new collective bargaining agreement. The process was complex and time consuming: 

they reviewed each provision of the OPEIU contract, determined its practical 

applications, compared each provision against LIUNA’s previous agreement with 

Southwest Washington Health District, and determined which sections of the OPEIU and 
25

LIUNA contracts were acceptable to both parties. The parties were forced to deal with 

difficult issues, including seniority credit and its relation to the transfer, new wage 

schedules, and reclassification of certain positions due to the transfer. The mediator 

looked for consensus on each provision and ultimately the parties executed a two year 

agreement. 

10. San Francisco Ballet / International Association of Musicians 

The San Francisco Ballet company employs approximately 67 musicians. The 

state of the economy and the decline in tourism have negatively affected endowment 

income, ticket sales and contributions to ballet. 

While the contract between the American Federation of Musicians Local 6 and 

the Ballet company expired in December 2002, the parties desired early intervention 

because of their previous positive working relationship with the FMCS and local 

mediators. Months before contract expiration, the parties asked to use interest-based 

bargaining techniques, using FMCS’s Technology Assisted Group Solutions (TAGS) 

computer-based program. With the help of two mediators utilizing our TAGS system, 

the parties resolved 18 of 27 non-economic issues in 3 days. Encouraged by this success, 

the parties agreed to address their outstanding economic issues. Generally, interest-based 

bargaining is a difficult technique to use when resolving economic issues. Nonetheless, 

the parties were able to complete the economic portion of negotiations in 2 days, also 

using interest-based bargaining techniques. As a result of the cooperative efforts of 

parties, the local mediator has been asked to address a national convention of ballet 

directors regarding FMCS’s dispute resolution services. 

C. Collective Bargaining Mediation Data

Intake

Fiscal Years 1999 Through 2003 1999 2000 2001 2002 2003

 Union and Employer Notices 6 36,854 34,038 33,344 40,677 33,046

 NLRB and FLRA Certifications7 1,631 1,492 1,446 1,389 1,485

 Public Sector Board Requests8 198 191 152 173 173

 Union and Employer Requests9 1,903 2,521 2,704 3,100 3.140

Total 40,586 38,242 37,646 45,339 37,844

 6 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.

7 Notifications from these two agencies regarding certification or recertification of bargaining units. 

Bargaining for an initial contract usually follows such certifications. 8 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.

9 Requests from the parties for mediation assistance where no notification to the Service has been filed.
26

Case Numbers Issued

Fiscal Years 1999 Through 200310 1999 2000 2001 2002 2003

25,676 26,323 25,071 25,282 26,774

Case Numbers Assigned

Fiscal Years 1999 Through 200311 1999 2000 2001 2002 2003

19,200 19,574 19,116 19,303 19,516

Cases Closed Fiscal Years 1999 

Through 2003 13 1999 2000 2001 2002 2003

 By consolidation after assignment 14 685 1,125 619 727 728

 By Final Report with meetings 15 6,188 6,321 6,424 6,757 6,640

 By Final Report with no meetings 16 12,422 13,291 12,107 10,861 11,938

Total 19,295 20,737 19,150 18,345 19,306

Dispute Meeting Conferences

Fiscal Years 1999 Through 2003 17 1999 2000 2001 2002 2003

19,329 17,837 17,933 17,920 17,702

Work Stoppage Information

Fiscal Years 1999 Through 200318 1999 2000 2001 2002 2003

 Work stoppages beginning in the

 fiscal year 362 400 432 308 277

 Work stoppages in closed cases

 in the fiscal year 411 392 445 327 289

 Average duration of work stoppages

 10 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.

11 Cases assigned to a mediator. The decision to assign a case involves many factors and not all cases are 

assigned.

13. Closed by Final Report filed by the mediator assigned to the case or by consolidation of a case with 

other cases after assignment.

14 Some cases are subsequently consolidated after assignment where it is determined that multiple parties 

will be involved in the same negotiations. 15 Cases closed where the mediator met with both parties on one or more occasions.

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.

17 The number of meetings in closed dispute mediation cases where a mediator was present in a meeting 

between the parties.

18 The Bureau of Labor Statistics reports work stoppages over 1,000 employees. FMCS reports all work 

stoppages.
27

 in closed cases (number of days) 50.5 390 40.7 53.7 60.5

Contract Mediation Analysis By Sector

Fiscal Years 1999 Through 2003 1999 2000 2001 2002 2003

INTAKE 40,586 38,242 37,646 45,339 37,844

CASE NUMBERS ISSUED

 Private Sector 23,856 24,386 23,135 23,170 24,775

 Public Sector 1,141 1,216 1,185 1,362 1,366

 Federal Sector 678 720 750 749 632

ASSIGNED

 Private Sector 17,444 17,681 17,241 17,266 17,568

 Public Sector 1,089 1,168 1,139 1,296 1,329

 Federal Sector 666 725 739 741 623

CLOSED CASES 19

 Private Sector 17,394 18,786 17,219 16,331 17,302

 Public Sector 1,199 1,209 1,150 1,297 1,341

 Federal Sector 701 742 781 717 663

 19 Excludes cases closed by consolidation after assignment.
28

III. INITIAL CONTRACT NEGOTIATIONS:

A. Initial Contract Negotiations and Processes: 

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. 

Negotiations can be further complicated by one or both parties’ inexperience in 

collective bargaining and labor-management relations. 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. Since 1996, FMCS maintained a rule requiring all initial 

contract cases remain open for two years pending an agreement between the parties, or 

the closing of the case for other reasons. 

For more than a decade, the NLRB regional offices have provided paper copies 

of certifications to the FMCS. Because the process varied in different parts of the 

country, the FMCS did not receive the certification within a reasonable period of time 

after issuance, severely hampering our ability to assist the parties. To streamline this 

process, and ensure our prompt receipt of certifications after their issuance, FMCS’s 

National Office receives, via e-mail from the NLRB’s headquarters, a spreadsheet of 

all certifications issued within the month. This data includes not only the company 

and union involved, but also includes a full and complete description of the certified 

unit, number of employees in the unit, date of certification, and addresses, telephone, 

facsimile and e-mail addresses of the parties involved. This system is more efficient, 

ensures that we receive the certifications no more than one month after issuance, and 

allows for our intervention as soon as possible. 
29

B. Initial Contract Bargaining Data

Initial Contract Bargaining FY 99 FY’00 FY’01 FY02 FY03

Private Sector initial contract cases 

received:

1,715 1715 1,745 1,486 1,578

Assigned to mediators: 1,657 1,677 1,702 1,458 1,506

Assigned from NLRB certifications: 1,397 1,296 1,282 1,185 1,266

Assigned from other sources:

 (e.g. voluntary recognition) 260 381 420 273 240

Cases closed by FMCS:

 (Mediated and non-mediated) 661 867 1,892 1,361 1,473

Mediated cases closed with agreement 

reached:

137 231 360 243 190

 Percentage of mediated cases 47.9 52.9 55.1 50.3 47.7

Mediated cases closed without agreement 

reached:

149 206 293 240 208

 Percentage of mediated cases20 52.1 47.1 44.9 49.7 52.3

Non-mediated cases closed with 

agreement reached:

249 255 676 538 642

 Percentage of non-mediated cases: 66.4 59.3 54.6 61.3 59.7

Non-mediated cases closed without 

agreement reached:

126 175 561 339 433

 Percentage of non-mediated cases21 33.6 40.7 45.3 38.7 40.3

Percentage of mediated and nonmediated cases

 Closed with agreement reached:

58.3 56.0 54.8 57.4 56.5

Closed cases involving ULP22 filed by 

either party:

75 128 263 221 193

Closed cases involving work stoppages: 19 24 43 29 20

Closed cases involving work stoppages 

with 

 Agreement reached:

10 14 21 20 10

Average number of days between 

statutory notice receipt and closure:

23 166 176 85 75 72

 20 Cases closed with agreement reached occur with final agreement on an initial contract 21 Cases closed without agreement occur after two years if agreement has not been reached on initial contract 22 Unfair Labor Practices
30

Average number of days for cases carried 

over

 And closed in next fiscal year:

351 363 432 396 318

Assigned cases carried over to next year: 1,001 813 792 784 881

 23 For cases closed in the same fiscal year they are received
31

IV. RELATIONSHIP DEVELOPMENT AND TRAINING PROGRAM: 

In today's changing workplace and economic environment, businesses and unions 

recognize that the quality of the labor-management relationship is an important factor in 

an organization's ability to compete. As a result, 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 address workplace issues between the parties, and they train both sides in 

effective bargaining, communications, joint problem solving and innovative conflict 

resolution methods. Increasingly, FMCS offers a broader range of services to respond to 

changing customer requirements. These "preventive mediation" (PM) services are 

collaborative union-management processes and are as important as our dispute mediation 

services.

B. FY 2002 Preventative Mediation Cases of Significance: 

1. Longmont Foods d/b/a ConAgra/UFCW Local 990 and

IOUE Local 1

ConAgra is a turkey processing plant, employing a culturally diverse workforce. 

Half of its workforce, about 400 employees, are represented by either UFCW or IOUE. 

In late 2002, we worked with the parties to develop a labor-management committee. 

We facilitated committee meetings into December 2002, and assisted the parties in

resolving workplace problems. Since the inception of the committee, the parties 

developed on-site foreign language classes, high school degree equivalency (GED)

classes, arranged for assistance to employees with immigration issues, and developed a 

scholarship program for employees’ children. The labor-management committee now 

works effectively on its own, with occasional site visits by the mediator. 

2. Environmental Protection Agency/AFGE

The labor-management relationship at the federal Environmental Protection 

Agency (EPA) offices in Chicago was historically volatile. There were a large number 

of unresolved grievances and the parties functioned on an adversarial basis. When a 

new Regional Director was appointed in the Chicago office, he demonstrated 

commitment to the mediation process by sending EPA labor relations specialists to the 

FMCS Institute for a course in mediation skills. The course was well received, as 

evidenced by the EPA’s request to replicate it in the Chicago office. In the fall of 2003, 

four mediators conducted a 5-day mediation skills training class. In order to remain 

responsive to the needs of the class, adjustments were made to the program agenda and 

content during the one week training program. The participants were anxious to apply 

their newly learned skills at the worksite. A follow-up facilitation session with the 

training participants, conducted several months later, showed that the participants 

utilized the skills learned during the training. The EPA reported an increase in the 

grievance-settlement rate and improved communication between the parties. The EPA 

continues to work with FMCS on additional training for other managers and union 

officials. 
32

3. Southeast Navy Regional Navy Command / American Federation of Government 

Employees (AFGE), International Association of Firefighters (IAFF), and the 

National Association of Government Employees (NAGE) 

The Navy’s Southeast region is headquartered in Jacksonville, Florida. It 

includes 17 commands and several thousand employees. The Southeast Navy Regional 

Command established a labor-management consortium, and, in August 2003, the FMCS 

was asked to train new members of the labor-management consortium, using interestbased, problem-solving techniques. After training, we facilitated discussions concerning 

housing, security and safety among 40 members of the labor-management consortium. 

Using subcommittees, and interest-based, problem-solving processes, the consortium 

resolved many complex issues through consensus and cooperation. The parties learned 

that occasional disagreement does not preclude cooperative efforts in other areas. 

4. Perkins School District 

The Perkins School District elementary school teachers and administrators asked 

for assistance in improving their overall working conditions. The parties complained of a 

growing distrust and lack of effective communication between teachers and 

administrators. We met with representatives of various factions within the district to 

fully assess their situation. We delivered a two-day training program for all teachers and 

administrators within the school, other district administrators, and all Board of Education 

members, focusing on advanced communication skills and development of a common 

vision for the school. Participants identified the issues dividing them and developed an 

action plan to rectify the situation. The parties created a labor-management committee to 

implement their objectives. The labor-management committee was trained by an FMCS 

mediator, who currently facilitates the committee’s meetings, and all parties are 

optimistic that working conditions will soon improve. 
33

C. Relationship Development and Training Data 

Relationship Development and Training 

Cases

Fiscal Years 1999 through 2003 24 1999 2000 2001 2002 2003

Assigned 25 2,891 2,782 2,629 2,610 2,574

Closed by Final Report 26 2,954 2,792 2,655 2,618 2,594

Outreach Cases

Fiscal Years 1999 Through 2003 27 1999 2000 2001 2002 2003

Assigned 5,518 5,504 5,436 5,800 5,392

Closed by Final Report 5,626 5,621 5,645 5,881 5,484

 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. 25 Cases assigned to a mediator. 26 Closed by a Final Report filed by the mediator. 27 Outreach involves mediator meeting with various members of the public to discuss and/or explain the 

processes of mediation.
34

V. ARBITRATION SERVICES:

A. Arbitration Services: 

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 have met 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. We retain a roster of over 1400 private arbitrators, 

knowledgeable practitioners with backgrounds in collective bargaining and labormanagement relations. FMCS charges a nominal fee for the provision of arbitrator 

lists and panels, or other major services. 

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.

B. FY 2003 Accomplishments:

The following represents the accomplishments of the Office of Arbitration 

Services during fiscal year 2003: 

• E-filing: To encourage on-line filing for arbitration panels, the Office of 

Management and Budget approved our request to increase fees for non-electronic 

panel requests, while maintaining the $30 on-line fee. The result has been an 

increase in on-line filing from 386 in fiscal year 2002 to 2140 in fiscal year 2003. 

• Revision of Arbitration Policies: Policies and Procedures have been revised by 

clarification of the criteria for admittance to the roster. The Arbitration Review 

Board has proposed, and the Director is now considering a policy that arbitrators 

who have not been active on the roster for a period of two years must reapply to 

the Arbitrator Review Board to gain re-admission.

• Untimely Awards: In the last two fiscal years, the Office of Arbitration services 

instituted timeliness requirements for awards. If two or more awards are overdue 
35

in non discharge cases, or there is one overdue award in a discharge case, the 

arbitrator is considered unavailable for selection until the awards are rendered. 

As a result, awards are more timely and the public has filed less complaints 

regarding untimely awards.

• Revisions to the R-43: Revision includes expansion of acceptable forms of 

electronic payment. Additionally, because the parties now have the opportunity 

to seek a panel of arbitrators from a particular metropolitan area, 25% of the 

parties have had substantial savings in travel expenditures. 

• Expansion of arbitrator biographies: The arbitrators’ biographies now include 

arbitrator’s e mail addresses for ease of communication, collective bargaining and 

arbitration experience, individual fees and cancellation policies, and each 

arbitrator’s time requirements to avoid a cancellation fee. 

• Arbitration Customer Focus Group: A customer focus group was convened, 

consisting of arbitrators, and representatives of labor and management, to secure 

feedback on the selection process, timeliness of awards, geographical boundaries, 

and concerns about our computer system. Recommendations of the focus group 

will be reviewed and changes to our procedures will be considered.

• FMCS Institute: The Agency’s Institute conducted two arbitrator training 

courses to increase the professionalism and expertise of new arbitrators. 

C. Arbitration Services Program Data

Number of Panel Requests, Panels Submitted and Arbitrator Appointments Fiscal Years 

1999 Through 2003

Activity 1999 2000 2001 2002 2003

Panel Requests 17,514 16,976 16,594 17,282 17,332

Panels Issued 28 19,062 19,485 18,275 18,891 19,039

Arbitrators Appointed 8,984 9,561 8,706 8,335 8,595

Activity Charged For 1999 2000 2001 2002 2003

Travel Days .41 .51 .43 .45 .48

Hearing Days 1.20 1.18 1.15 1.09 1.15

Study Days 2.38 2.58 2.40 2.44 2.35

Total 4.02 4.27 3.98 3.98 3.98

 

Charges 1999 2000 2001 2002 2003

Per Diem Rate 641.49 672.12 693.12 720.75 763.87

Amount of Fee 2,592.00 2863.49 2761.04 2884.46 3047.54

 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.
36

Amount of Expenses 248.92 321.67 341.92 318.03 364.32

Total Charged 2,840.92 3185.16 3102.96 3202.49 3411.86

Total Number of Issues

And Specific Issues

1999 2000 2001 2002 2003

Total

2,132 2,723 1,902 1,989 2,314

General Issues 391 585 434 463 506

 Overtime Other Than Pay*

 Distribution of Overtime 30 48 34 26 35

 Compulsory Overtime 8 12 8 12 9

 Other Overtime 15 18 10 10 12

Seniority

 Promotion & Upgrading 42 86 54 52 63

 Layoff Bumping & Recall 48 65 46 48 71

 Transfer 13 16 17 21 14

 Other Seniority 33 38 25 25 35

 Union Officers** 4 12 9 14 13

 Strike & Lockout 2 4 3 2 1

 Working Conditions*** 19 35 35 29 19

 Discrimination 21 27 19 24 17

 Management Rights 49 75 51 63 71

 Scheduling of Work 45 50 43 67 47

 Work Assignments 62 99 80 70 99

Economic Wage Rates & Pay Issues 239 298 227 229 233

 Wage Issues 46 32 29 36 42

 Rate of Pay 65 75 53 60 60

 Severance Pay 6 5 6 8 5

 Reporting, Call- in & Call-back Pay 10 12 13 7 10

 Holidays & Holiday Pay 15 33 31 26 21

 Vacations & Vacation Pay 31 54 29 39 27

 Incentive Rates & Standards 17 25 13 7 15

 Overtime Pay 49 62 53 46 53

Fringe Benefits Issues 63 100 69 99 112

 Health & Welfare 27 58 29 58 61

 Pensions 6 14 11 8 11

 Other Fringe Issues 30 28 29 33 40

Discharge & Disciplinary Issues 1004 1203 849 947 1091

Technical Issues 102 139 81 86 97

 Job Posting & Bidding 36 52 32 38 43

 Job Evaluation 24 28 18 11 21

 * Overtime pay issues included under this category 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.
37

 Job Classification 42 59 31 37 33

Scope of Agreement 61 74 45 65 53

 Subcontracting 40 48 29 41 36

 Jurisdictional Disputes 10 16 8 14 5

 Foreman, Supervision, etc. 7 5 5 8 9

 Mergers, Consolidations, Accretion, Other 

Plants

4 5 3 2 3

Arbitrability of Grievances 146 193 109 100 139

 Procedural 98 120 76 60 102

 Substantive 35 42 14 23 25

 Procedural & Substantive 13 24 19 17 12

 Other Arbitrability Questions 0 7 0 0 0

Not Elsewhere Classified 126 131 88 115 83

Total Number of Cases

State & Region 1999 2000 2001 2002 2003

Mountain 142 85 123 115 136

 Arizona 9 15 10 15 20

 Colorado 47 28 40 30 47

 Idaho 6 3 7 5 7

 Montana 8 11 16 7 11

 Nevada 30 12 13 31 23

 New Mexico 35 11 26 19 20

 Utah 5 4 5 5 6

 Wyoming 2 1 6 3 2

Pacific 153 128 140 151 129

 Alaska 8 6 13 7 2

 California 86 59 66 73 67

 Hawaii 2 2 0 1 3

 Oregon 17 32 28 31 12

 Washington 40 29 33 39 45

Miscellaneous 9 16 9 13 15

 Philippines 0 0 0 0 0

 Puerto Rico 2 4 1 2 7

 Virgin Islands 4 4 4 10 6

 Guam 0 0 0 0 0

 Others 3 8 4 1 2

New England 20 29 45 17 37

 Connecticut 5 10 13 0 4

 Maine 2 2 2 2 4

 Massachusetts 9 11 12 9 8

 New Hampshire 2 0 2 1 0

 Rhode Island 1 0 6 3 8

 Vermont 1 6 10 2 13

Middle Atlantic 233 289 307 246 284

 New Jersey 31 22 30 26 35
38

 New York 95 111 121 71 97

 Pennsylvania 107 156 156 149 152

South Atlantic 285 349 385 375 457

 Delaware 4 6 12 3 2

 District of Columbia 53 31 36 35 50

 Florida 55 92 112 125 124

 Georgia 25 51 58 41 77

 Maryland 48 35 29 49 48

 North Carolina 7 21 29 29 37

 South Carolina 8 15 14 14 21

 Virginia 47 56 30 43 53

 West Virginia 38 42 65 36 45

East North Central 673 866 715 950 796

 Illinois 207 191 145 216 199

 Indiana 71 67 63 84 55

 Michigan 187 190 194 158 171

 Ohio 154 338 224 413 274

 Wisconsin 54 80 89 79 97

West North Central 222 316 314 273 347

 Iowa 49 61 68 51 67

Kansas 27 32 38 28 39

 Minnesota 40 90 84 82 71

 Missouri 85 101 94 89 121

 Nebraska 16 17 19 12 17

 North Dakota 1 5 8 4 23

 South Dakota 4 10 3 7 9

East South Central 118 236 239 221 224

 Alabama 23 53 57 51 49

 Kentucky 35 70 81 66 71

 Mississippi 9 17 32 20 24

 Tennessee 51 96 69 84 80

West South Central 110 227 237 308 321

 Arkansas 11 35 40 53 53

 Louisiana 9 28 23 43 40

 Oklahoma 26 68 70 104 79

 Texas 64 96 104 108 149

Totals 1,965 2507 2514 2669 2746

 

 
39

VI. GRANTS PROGRAM:

A. Grants: 

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 2003, we received 71 grant applications. We awarded 10 new 

competitive grants and 3 non-competitive (continuation of prior grants) at a cost of $1.5 

million. These grants supported labor-management committees representing 

approximately 1.6 million employees in both the private and public sector. 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 

program director.

B. Fiscal Year 2003 Grant Funding Summary

AREA

San Diego-Imperial Counties (San Diego, CA) 03-CA/A-006

$113,535 Develop strategies to help workers overcome legal barriers to Employment 

Using Local Labor-Management Committees

Community Services Agency of the Metropolitan Washington Council

(Washington, DC) 03-DC/A-007

$110,668 Implementation of Workplace Issues and Collective Bargaining in the 

Classroom in the Metropolitan Washington, DC Area by giving the students a better 

understanding of the work in the society in both an historical and contemporary 

perspective.

PLANT

Blue Ridge Paper Products Inc. (Canton, NC) 03-NC/P-002

$65,000 The creation of a new, more industry competitive “Employee Ownership” 

organizational culture, through a joint Labor/Management Partnership.

INDUSTRY

H-CAP, INC. (Washington, DC) 03-DC/I-003

$122,829 Address workforce needs, specifically the current nursing shortage crisis by 

creating a training program which will offer an industry-led nursing education program.

International Association of Machinists & Aerospace Workers/District Lodge 141M 

(South San Francisco, CA) 03-CA/I-004
40

$125,000 Improve labor-management relations and to enhance productivity and 

employment security in the airline industry by developing and supporting highly trained 

and effective labor-management committees.

Consortium for Worker Education, Inc. (New York, NY) 03-NY/I-005

$119,243 Develop industry led training and business services to help decrease the 

Employment skills shortage and help improve the workers skills.

Alpena General Hospital (Alpena, MI) 03-MI/I-008

$116,439 Enhance labor relations in two separate hospitals using a new nursing 

profession initiative “The Magnet Recognition Program” to mandate standards for 

hospitals to create healthier work environments and stronger organizations. 

Mid-Michigan Construction Alliance (Lansing, MI) 03-MI/I-011

$120,721 Enhance the chances for finding better ways to achieve positive outcomes to 

deal with the many labor-management problems in Mid Michigan, organized 

construction community.

Association of Joint Labor Management Educational Programs (New York, NY) 03-

NY/PS-009

$76,014 Development and implementation of a multi-faceted labor-management 

committee training program in order to strengthen and promote the need for training for 

the committees.

City of Fresno (Fresno, CA) 03-CA/PS-010

$70,801 Improve Labor-Management Communication, Trust and Decision-making 

during uncertain economic times.
41

VII. FMCS INSTITUTE:

A. Purpose and Course Offering:

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 preventive mediation programs. The Institute was established 

to respond to the changing needs of modern collective bargaining, providing essential 

training in meeting the challenges of labor-management relations and organizational 

change. 

In fiscal year 2003, the Institute offered 13 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. 
42

VIII. EMPLOYMENT MEDIATION:

A. Services Provided: 

Mediation of employment-related disputes is available to federal, state, and 

municipal government agencies. These services include mediation, conflict resolution 

systems design, education, training, and the facilitation of multi-party regulatory, 

environmental and public policy negotiations. All these services are successful 

alternatives to costly and time-consuming litigation in the settlement of conflict.

FMCS mediates disputes both within agencies (e.g., age discrimination and other 

unfair employment complaints, whistleblower complaints) and between agencies and their 

regulated public (e.g., environmental disputes). 

The longer-term objective is to assist agencies in institutionalizing these processes. 

FMCS “trains the trainers,” imparting these skills to agency personnel so they can 

construct their own dispute resolution system, and also train others within their 

organization. 

1. Federal Employment Mediation:

FMCS concluded nearly 1310 ADR cases for numerous governmental agencies in 

fiscal year 2003. For most of the governmental agencies listed below, we mediate 

workplace and discrimination disputes. Our government contracts include: 

• Equal Employment Opportunity Commission

• United States Postal Service

• Health and Human Services 

• Department of the Interior 

• Internal Revenue Service

• Department of Agriculture

• Department of the Navy 

• Immigration and Naturalization Service 

• Federal Bureau of Investigation 

• Housing and Urban Development 

Additional work included the following: 

a. Bureau of Indian Affairs 

The FMCS facilitated a four-year regulatory negotiations process for the Bureau 

of Indian Affairs, a division of the Department of Interior. The Departments of Interior 

and Transportation allocated $275 million for road construction and maintenance

projects, but a funding formula was required to determine the appropriate distribution 

of the funds to various stakeholders. The stakeholder representatives included twentynine tribal representatives, representing the nation’s 556 recognized tribes throughout 

the U.S., eighteen federal representatives, and over fifteen technical and legal 

consultants. Negotiations ran in excess of twenty months. This became a critical issue 
43

when current road projects, needing immediate attention, had to rely on special 

apportionment from the existing formula. 

The committee faced a number of dilemmas: how, when, and at what level of 

funding would the funds be earmarked and distributed, to what tribes, and when. 

Partial funds were distributed, but planning was disrupted because of unclear mandates 

from government officials and tribal leaders. After 4 years of negotiations, concluding

in late 2002, agreements were reached on key issues of population, land use, mileage, 

maintenance and the crafting of two formula options. A notice was published in the 

Federal Register outlining the committee’s draft rule for fund distribution based on 

specific formulas. Over 1800 comments were received. Committee protocols required 

that the group consider these comments. After reviewing the public comments in 2003, 

adjustments were made to the proposed rule and the matter has been resolved. 

b. Environmental Protection Agency 

In September 2001, FMCS began consultative services with the U.S. 

Environmental Protection Agency, Office of Research and Development (ORD) seeking 

to improve employee morale. ORD is the scientific research branch of EPA and employs 

the nation’s leading scientists at various EPA labs. During the initial phase of the 

working relationship, we developed site-specific improvement plans and implemented the 

plan at the local lab level. Various programs included conflict management training in 

communications, diversity, leadership development, and management. ORD 

incorporated organizational change to address employee morale and legacy planning, and 

we continue to serve as a consultant for conflict management models. Most recently, we 

designed a comprehensive, conflict-management training program, which will be 

implemented in FY 2004.

IX. INTERNATIONAL TRAINING AND EXCHANGE:

FMCS is responding to increasing requests for conflict resolution services outside 

the traditional domestic labor-management arena. FMCS plays an important role in 

promoting collective bargaining and conflict resolution in other nations. Friendly foreign 

governments have sought our assistance in designing systems that resolve and prevent 

industrial conflict where a formal system has not been developed to manage it. We have 

held briefing sessions for foreign union and management officials to familiarize them

with U.S. labor-management history, laws, and practice. 

The International team develops a program plan, outlining specific services, 

potential venues for those services, and possible funding sources. Since FMCS receives 

no appropriated funds for its International programs, mediator salaries and expenses are 

reimbursed through such entities as the Department of State, The United States Agency 

for International Development (USAID), or the United States Department of Labor. 

Overall, we assisted 60 foreign government organizations in FY 2003. Some 

examples include the following: 
44

a. Baltic Mediation Training Project 

In September 2001, FMCS conducted training in dispute resolution techniques 

for labor, management, and government officials in Riga, Latvia and Vilnius, 

Lithuania. We maintained our cooperative efforts through fiscal year 2003 and 

developed a special training program to expose at least one mediator candidate from 

each country to FMCS dispute resolution techniques. One attorney from the central 

trade union confederation of Latvia, one labor attorney from the Estonian Ministry of 

Labor, and one mediator from an NGO from Lithuania, were selected to participate. 

All three attended new mediator training in the United States (along with other newly 

hired FMCS mediators) and were assigned to an FMCS Regional Office for 3 weeks, 

where each had the opportunity to observe mediators working in many different states. 

This project was funded by the Department of State, Northern European Initiative, and 

the U.S. Baltic Foundation. Our cooperation continues in the fall 2003, in Riga, Latvia, 

where we will train labor, management, and government officials in dispute resolution 

techniques. 

b. Mediation and Arbitration Services in Bulgaria

For four years, FMCS assisted Bulgaria in building democratic institutions for 

conflict resolution. In previous years, we hosted high-level officials from labor, 

management, and government who observed a wide variety of labor-management conflict 

resolution systems. As a result, and with our assistance, the Bulgarian National Institute 

for Conciliation and Arbitration (NICA) was formed. In May 2003, 35 mediators were 

selected to join that organization, and we designed and implemented training for the 

newly appointed mediators. Introductory mediation training was provided in May 2003, 

and we have commenced discussions with NICA’s Executive Director about follow-up 

training on arbitration services and the establishment of a code of ethics.

c. South Korea 

South Korean’s Labor Education Agency, Korea Labor Education Institute 

(KLEI), sent seven labor relations professionals, professors, and attorneys to attend the 

FMCS Institute’s course in mediation skills. Subsequently, five individuals from the 

Korean delegation participated in preventive mediation training and shadowed mediators 

in the Seattle area. FMCS and KLEI executed a memorandum of understanding agreeing 

to collaborate on their respective labor relations and alternative dispute resolution 

techniques and approaches.

d. Conciliation Institutions in Peru

The government of Peru asked for our assistance in strengthening its ability to 

provide mediation services. The government also sought assistance in creating and 

training private sector labor mediators. We conducted 4 training programs attended by 

representatives of labor, management, and conciliators, and also conducted a “train the 
45

trainer” program for government conciliators who are expected to form the nucleus of a 

training team for other conciliators/mediators in the country. 

With respect to strengthening the government’s ability to provide mediation 

services, we facilitated a steering committee for the development of a new Center for 

Mediation, Arbitration & Investigation (CENCOAMITP) in the Labor Ministry. It is 

now the first entity to provide labor conciliation outside of the judicial system. The 

Labor Minister, Fernando Villarán De La Puente, personally attended the meetings that 

formed this new center, which commenced activities in July 2003. 

We were also asked to assist the government in development of a private sector 

labor mediation practice. The Ministries of Labor and Justice signed an agreement laying 

out a framework of cooperation allowing for extrajudicial labor conciliation. The new 

Center for Mediation, Arbitration and Investigation is expected to train a cadre of private 

sector conciliators who will, for the first time, provide extrajudicial labor conciliators to 

generate agreements enforceable in a court of law.

e. Serbia and Montenegro 

The American Center for International Labor Solidarity Center, in a project 

funded by the U.S. Agency for International Development (AID), asked the FMCS to 

promote and develop conflict resolution mechanisms for unions, employers, and 

government agencies in war-torn Serbia and Montenegro. 

To achieve this objective, FMCS will work with the Solidarity Center from 2003 

through 2005 to provide education and guidance on improving negotiations and 

developing institutional capacity to resolve disputes. During this period, we continue to 

conduct education programs with partners in Serbia and Montenegro to achieve these 

objectives. In April 2003, we met with labor, management, and government officials 

separately, and in focus groups, to develop training needs and guide the development of 

training materials. In June 2003, we commenced our first training session. It involved 

interest based bargaining techniques and communications skills for labor, management, 

and government officials. The parties in both republics are committed to establishing a 

mediation and arbitration service and to creating the necessary legal frameworks for these 

to flourish. Both ministries will draft legislation, and we have pledged our assistance in 

facilitating meetings among interested stakeholders in drafting the legislation. In the 

meantime, we continue to work with Serbia and Montenegro to develop training 

programs geared to problem-solving, grievance and arbitration machinery, appropriate 

contract language, and resolution of individual and collective labor disputes. Additional 

activities are planned for the next two years. 

f. Argentina: 

The objective of this project, funded by the U.S. Department of Labor, was to 

strengthen the capacity of the Province of Córdoba, Argentina (the second largest 

province in Argentina) to conciliate labor disputes in the wake of the volume of 
46

dismissals resulting from the deep economic recession in Argentina. In phase one of the 

project (November 2001), FMCS commissioners trained the conciliators and labor 

inspectors in interest based problem solving techniques. In phase two of the project, the 

team returned to Córdoba in April 2002 to train private sector labor relations practitioners 

in win-win negotiation techniques. In September 2002 FMCS trained conciliators from 

17 provinces of Argentina, a group that now comprises a Federal Mediation Training 

Team. The provinces of Río Negro, Mendoza, Buenos Aires, and Neuquén, among 

others, have already delivered training programs to their respective labor-management 

communities. Finally, in May 2003, FMCS provided a “train the trainer” program to 

many of the other members of the Federal Mediation Training Team to prepare them for 

their expanding the training program around the country.

g. Mozambique: 

In collaboration with the United States Department of Labor, during 2002-2003 

FMCS conducted a multi-phase program aimed at enhancing the capacity of the 

Mozambican Ministry of Labor. In the first phase (November 2002), business, labor and 

government leaders were trained in the areas of interest-based bargaining, consensus 

decision-making, active listening, communication skills and teambuilding. The training 

provided the parties with the skills necessary to address a broad range of issues using an 

interest-based approach. In phase two (June 2003) FMCS trained a cadre of Mozambican 

business and labor leaders to provide them with a basic understanding of labormanagement relations, their roles and responsibilities as stewards and supervisors, 

interest-based problem solving, consensus decision-making, and teambuilding. Finally, 

in phase three (September 2003), FMCS commissioners worked with the Labor Ministry 

and other tripartite stakeholders to develop a sustainable program to continue teaching 

skills to the Mozambican Labor Relations community after the project has ended. To this 

end, the commissioners delivered a “train the trainer” course to teach techniques for 

disseminating information on cooperative labor relations.