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2010 
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Message from the Director 

Labor and management continued to face many difficult issues this past year, presenting 

FMCS with a host of challenges and opportunities. Among the factors that have had a 

substantial, continuing impact on U.S. labor relations are the lingering effects of what has 

been called the Great Recession. With the nation’s unemployment rate hovering in the 

vicinity of nine percent in general and even higher in the manufacturing and construction 

sectors, the after effects of the most severe economic downturn since the Depression of the 

1930s will continue to dominate collective bargaining in FY 2011 and perhaps for years to 

come. In many industries, the recession and its consequences brought powerful employer 

demands for concessions and equally powerful union demands for job security. 

In addition to the instability associated with the recession, the next single biggest contributor 

to labor relations conflicts and work stoppages in the past decade has been health care. No 

issue stands to engender bargaining conflicts more than health care benefits, their distribution 

and their associated increased costs. Contractual and plan changes also will be required of the 

parties as a direct result of the Patient Protection and Affordable Care Act of 2010 also known 

as the Affordable Care Act. During FY 2010, FMCS briefed field mediators on the provisions 

of the new law and began planning a series of labor-management seminars designed to 

highlight constructive joint solutions. While there is no doubt that labor and management will 

continue to have competing views about cost sharing and cost savings, the FMCS is 

cautiously optimistic that it can help the parties find acceptable compromises that will benefit 

both sides. 

The subjects of pension benefits and retirement security add yet another dimension to the 

spectrum of contentious fringe benefit issues likely to be highly visible in the next several 

rounds of bargaining. FMCS anticipates that during FY 2011 and into the foreseeable future, 

management and labor will continue to battle over the merits and wisdom of defined benefit 

versus defined contribution pension plans. 

The FMCS also recognizes that the need for job creation and sustainable energy initiatives 

will generate an increased emphasis and, indeed, urgency to the creation of “green jobs.” 

This will add yet another potential source of tension to many collective bargaining 

relationships as employers seek to terminate old product lines, introduce new technology, and 

demand different skill sets of workers. 

Report for 

Fiscal Year 2010 
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When taken together, these and other factors influencing labor-management relations have 

created a tense and volatile atmosphere at the nation’s bargaining tables unlike anything 

experienced by the FMCS in recent years. Just one example in FY 2010 involved a potential 

open-ended walk-out by more than 12,000 nurses from 14 hospitals in the Minneapolis/St. Paul 

metropolitan area. The dispute was highly contentious and the issues complex and technical. 

After a one-day strike, the parties became even more deeply entrenched. A settlement ultimately 

was reached with round-the-clock assistance by several FMCS mediators. Perhaps more 

importantly, after working with our skilled professionals, the parties committed publicly to 

reinstate and reenergize collaborative committees to address the key issue of nurse-to-patient 

staffing ratios. 

In the face of such challenges, the FMCS constantly strives to deliver services that best meet the 

interests of the parties and the public. First and foremost, and consistent with its core mission, 

the FMCS continues to place its major emphasis on assisting the parties in the bargaining process 

itself. In addition, FMCS underscores the need for labor-management relationship building and 

cooperation. Experience has shown that what labor and management need in difficult times is a 

strong relationship, built on mutual respect and trust, in which issues can be discussed and joint 

solutions reached. With outreach and training programs, the FMCS helps parties achieve 

stronger relationships. Every day, FMCS mediators, in a variety of ways, offer parties broadbased assistance, with a view toward encouraging relationship improvement far in advance of the 

trauma of contract expiration and deadlines for negotiations. 

Congress recognized this precise point years ago when it passed the Labor Management 

Cooperation Act of 1978. The Act authorizes and directs the FMCS 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." Congress funds this 

initiative through its annual appropriation to the FMCS. The grants funded by the program are 

distributed to encourage labor-management committees to develop innovative, joint approaches 

to workplace problems. 

In FY 2010, the FMCS awarded 10 new competitive grants totaling $750,000. These grants are 

supporting labor-management committees tackling a wide variety of important issues related to 

health care, job safety, work-life balance, and the flexibility needed to pursue new business 

opportunities, such as green jobs. 

In addition to training programs and grants for labor and management, FMCS mediators and 

managers participated in many joint labor-management conferences and seminars sponsored by 
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universities, bar associations, and professional groups—all with the goal of advising the labor 

relations community of the wide variety of constructive services the FMCS can provide to 

improve relationships between employers and unions to help them resolve disputes. 

The FMCS is also responsible for helping to ensure stable labor-management relations in the 

federal government. In December 2009, the President issued Executive Order 13522. The stated 

purpose of this Executive Order is to “promote satisfactory labor relations and improve the 

productivity and effectiveness of the Federal Government.” To that end, all federal agencies are 

required to establish and to implement “labor-management forums [that] allow managers and 

employees to collaborate in continuing to deliver the highest quality services to the American 

people.” 

FMCS mediators have been deeply involved in the important task of training federal union and 

management representatives in how to establish and implement these joint forums and to use 

them as tools to advance cooperation and collaboration within their respective federal agencies. 

In FY 2010, and within months of the issuance of the Executive Order, the FMCS, together with 

its sister agency, the Federal Labor Relations Authority (FLRA), responded to more than 100 

requests for assistance. Together, the FMCS and FLRA created and delivered two days of 

intensive training to federal agency labor-managements pairs at locations throughout the country. 

These training sessions covered both statutory rights and responsibilities and described the best 

tools and cooperative techniques for creating and implementing productive labor-management 

forums. 

In sum, the FMCS recognizes, as did Congress more than 60 years ago, that constructive labormanagement relationships and collective bargaining provide the parties with the most effective 

tools for achieving productivity, innovation and competitiveness—the central ingredients for a 

growing economy. 

As Director, I believe that the best approach to achieve these goals is a pro-active one. This past 

year, in speeches by our senior management at conferences and seminars and through group and 

individual outreach efforts by our mediators, we have worked to convey a simple truth to labor 

and management representatives, that in today’s competitive economy, they are partners not 

adversaries. Working together, they have the greatest chance for economic survival and success. 

Sincerely, 

George H. Cohen 

Director 
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 FY 2010 Agency Services 

Agency Mission 

For more than 60 years, the Federal Mediation and Conciliation Service (FMCS) has delivered 

neutral and confidential conflict resolution assistance to the nation’s unionized workplaces. The 

core mission of FMCS is to help employers and unions avoid costly work stoppages and 

minimize their potentially devastating effects on regional or national commerce. The FMCS was 

created by Congress as an independent agency in the Labor-Management Relations Act of 1947. 

Our highly trained mediators provide conflict resolution services to the nation’s employers and 

their unionized employees. Our goal is to prevent or minimize interruptions to the free flow of 

commerce that grow out of labor disputes and to improve labor-management relations. The core 

activity of the FMCS is collective bargaining mediation; a voluntary process in which mediators 

serve as third-party neutrals to facilitate the settlement of issues in the negotiation of collective 

bargaining agreements. 

A. Collective Bargaining Mediation 

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

stoppages to the U.S. economy. The FMCS’s core work is to mediate collective bargaining 

negotiations for initial contract negotiations—which take place between an employer and a 

newly certified or recognized union representing its employees—and for negotiations for 

successor collective bargaining agreements. FMCS provides mediation services to the private 

sector, and also to the public sector, including federal agencies, and state and local governments. 

During mediation, the mediator’s task is to identify alternative solutions and compromises, 

encourage settlement where appropriate, control the critical timing of offers, and persuade the 

parties to honestly discuss their differences. In FY 2010, FMCS mediators were actively 

involved in more than 4,900 collective bargaining contract negotiations in every major industry 

throughout the United States. 

B. Grievance Mediation 

Grievance mediation involves the use of a neutral party to mediate disputes that may arise over 

the terms and conditions of a collective bargaining agreement. FMCS mediators provide this 

service to the private and public sectors with the goal of preventing unresolved contract 

interpretation issues from spilling over into future contract negotiations. Lengthening contract 

terms increase the importance of resolving contentious issues arising during the term of a 

contract. In FY 2010, FMCS mediated 2,084 grievance mediation cases and helped the parties 

reach agreement in 1,532 of these. 
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C. Relationship-Development and Training 

Preventing conflict that may arise during the term of a collective bargaining agreement is another 

important goal of the FMCS. The FMCS’s relationship-building training programs are designed 

to improve labor-management relationships by helping labor and management to develop 

collaborative problem-solving approaches. Effective use of these programs better enables the 

parties to jointly respond to rapidly changing business and economic conditions during the term 

of the contract and also make future mediation efforts more effective. 

D. Employment Mediation 

Outside the collective bargaining arena, FMCS provides employment mediation services to the 

federal sector and to state and local governments on a cost-reimbursable basis. The 

Administrative Dispute Resolution Act of 1990, the Negotiated Rulemaking Act of 1990, and the 

Administrative Dispute Resolution Act of 1996 expanded FMCS’ role as a provider of these 

services. The legislative intent behind these acts was to expand the use of alternative dispute 

resolution throughout the Federal government, reduce litigation costs, and promote better 

government decision-making. The FMCS also provides employment mediation to the private 

sector to resolve workplace disputes falling outside of the traditional collective bargaining 

context, i.e., equal employment opportunity disputes. In FY 2010, FMCS mediated 1,392 

employment cases. 

E. International Training and Exchange 

Beyond the nation’s borders, FMCS plays an important role in promoting collective bargaining 

and conflict resolution around the world. FMCS’ international work is a small, but integral, part 

of its services. Emerging market economies often struggle to compete effectively in a globally 

integrated marketplace. FMCS helps establish the labor relations institutions that are essential to 

the smooth functioning of free market economies. These programs are also a knowledge-sharing 

experience: FMCS mediators gain familiarity with complex issues affecting the global economy 

and, as a result, are more effective in resolving labor-management disputes with international 

implications. 

FMCS’ international efforts help to level the economic playing field for U.S. companies and 

workers by strengthening the rule of law and workers' rights in developing countries. In addition 

to supporting U.S. companies and workers in the global market by advocating core labor 

standards for all nations, the program helps create the stable and productive work forces that are 

needed to attract foreign investment and improve living conditions. In addition to industrial 

relations, FMCS mediators assist with rule of law initiatives, thereby helping to support 

economic growth and investment. These initiatives include mediation training and working with 

NGOs and other civil society organizations to develop mediation and other FMCS ADR 

programs. FMCS’ international program operations are reimbursed and are funded in part by a 

number of foreign and U.S. agencies, including the U.S. Department of Labor, the U.S. 

Department of State, the U.S. Agency for International Development, and the International Labor 

Organization. 
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F. Arbitration Services 

National labor policy favors arbitration for settling contractual disputes. FMCS’ Office of 

Arbitration Services maintains a roster of approximately 1,400 independent arbitrators who are 

qualified to hear and decide disputes over the interpretation or application of collective 

bargaining agreements. Upon request from the parties, FMCS furnishes a list of names from 

which they may choose an arbitrator to hear their case and render a decision. During FY 2010, 

the Office of Arbitration Services processed nearly 16,500 requests for arbitration panels 

nationwide. Arbitrators on the FMCS roster heard and decided more than 2,100 labor arbitration 

cases. 

G. FMCS Institute for Conflict Management 

The FMCS Institute for Conflict Management provides training and education to labor and 

management practitioners from multiple organizations in an off-site classroom format. The 

Institute offers training in practical conflict resolution skills, collective bargaining, arbitrator and 

arbitration skills-building, facilitation process skills, multi-party facilitation, cultural diversity, 

equal employment opportunity mediation skills, and workplace violence prevention. The 

Institute runs as a reimbursable program and is funded by fees received from training 

participants. 
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Mediation Services Program Data

PROGRAM SERVICES FY 2007 FY 2008 FY 2009 FY 2010

1. COLLECTIVE BARGAINING MEDIATION.................... 

 Assigned Cases114,663 14,308 13,887 14,127 

 -Private Sector 13,245 12,914 12,425 12,888 

 -Public Sector (state and municipal) 1,107 1,083 1,138 906 

 -Federal Sector 311 311 324 333 

 Mediated Cases2

5,329 4,836 4,767 4,919 

 -Private Sector 3,907 3,437 3,320 3,632 

 -Public Sector (state and municipal) 1,145 1,145 1,155 991 

 -Federal Sector 277 254 292 296 

 Closed Cases 14,478 13,480 13,308 12,992 

 Closed Mediated Cases 4,426 3,914 3,958 4,005 

 Activity Rate331% 29% 30% 31% 

 Settled and Closed Mediated Cases 3,818 3,396 3,395 3,428 

 Percentage of mediated cases settled through FMCS4

 86% 87% 86% 86% 

 Activity rate in significant cases5 51% 38% 37% 45% 

2. GRIEVANCE MEDIATION................................................. 

 Assigned Cases 1,768 1,749 2,027 2,124 

 Mediated Cases 1,753 1,728 2,004 2,084 

 -Private Sector 1,282 1,296 1,570 1,708 

 -Public Sector (state and municipal) 316 314 313 239 

 -Federal Sector 155 118 121 137 

 Settled GM Cases 1,254 1,299 1,479 1,532 

 Percentage of cases settled through FMCS6 74% 75% 74% 74% 

3. RELATIONSHIP-DEVELOPMENT AND 

TRAINING......................................................................................

 

 Number of training programs provided 2,548 2,356 2,327 2,200 

 -Private Sector 1,591 1,390 1,400 1,471 

 -Public Sector (state and municipal) 730 712 682 433 

 -Federal Sector 227 254 245 296 

4. EMPLOYMENT MEDIATION................................ 

 Mediated Cases 1,060 1,220 1,362 1,392 

 -Federal Sector 1,038 1,205 1,336 1,387 

 -Public Sector (state and municipal) 5 11 9 2 

 -Private 17 4 17 3 

 Settled EM Cases 532 576 638 675 

 Percent of EM cases settled through FMCS7 50% 47% 47% 48% 

5. OUTREACH................................................................ 

 Outreach cases83,847 3,347 3,622 3,240 

 

1

 Section 8(d) of the NLRA, as amended, 29 U.S.C. §158(d) requires that any employer or labor organization provide notice to FMCS 30 days prior to 

contract expiration. Not all cases providing notices are assigned. Actual FY 2010 FMCS case intake exceeded 23,400.

2

 Mediated cases (formerly called “active” cases) represent the number of cases in the FY where mediators have become active in the negotiations.

3

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

4

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

5

 Significant cases are generally defined as situations where the bargaining unit exceeds 1,000.

6

 Defined as the number of grievance mediation cases settled and closed within the fiscal year divided by the number of closed GM assignments.

7

 Defined as the number of mediated employment cases settled divided by the number of mediated cases closed

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 FMCS requires all mediators to engage in outreach efforts. These kinds of activities include non-bargaining meetings with labor and 

management representatives, attendance at conferences, meetings with local and state officials to offer FMCS services, and presentations 

designed to increase public knowledge.
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Work Stoppage Information 

2005 2006 2007 2008 2009 2010 

Work stoppages carried from preceding FY 25 52 31 19 29 13 

Work stoppages beginning within FY 290 247 163 193 103 159 

Work stoppages closed within FY 263 268 175 183 119 153 

Work stoppages open at end of FY 52 31 19 29 13 19 

Average duration of work stoppages in closed cases 

(number of days) 

41.1 70.9 63.1 51.8 104.2 47.3 

Estimated number of worker-hours lost due to work 

stoppages (1,000s) 

18,064 25,175 29,734 20,147 19,609 8,877 

Work Stoppage Cost Information 

Direct 

Costs 

Indirect 

Costs 

Total 

Costs 

Year ($1,000s) ($1,000s) ($1,000s) 

1999 883,010 896,481 1,779,490 

2000 3,350,203 3,672,152 7,022,355 

2001 495,484 476,000 971,484 

2002 363,522 461,289 824,811 

2003 372,678 329,595 702,273 

2004 1,102,475 267,260 1,369,735 

2005 488,075 450,737 938,812 

2006 725,180 686,468 1,411,648 

2007 801,314 931,108 1,732,422 

2008 533,971 567,397 1,101,368 

2009 623,264 736,032 1,359,296 

2010 250,162 238,538 488,700 

 

Savings to Parties Attributable to Mediation

Reduced 

Incidence

Reduced 

Duration

Total 

Savings

Year ($1,000s) ($1,000s) ($1,000s)

1999 756,974 211,149 968,122 

2000 1,992,529 303,092 2,295,621 

2001 667,206 60,372 727,578 

2002 840,936 272,595 1,113,531 

2003 717,239 224,287 941,525 

2004 2,259,575 173,177 2,432,752 

2005 1,269,679 798,666 2,068,345 

2006 1,320,946 374,872 1,695,818 

2007 888,376 383,386 1,271,762 

2008 1,155,903 (501,807) 654,096 

2009 2,613,336 1,142,193 3,755,529 

2010 1,389,809 (39,122) 1,350,687 
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Arbitration Services Program Data

Activity 2006 2007 2008 2009 2010 

 

Panels Issued9 16,854 16,264 15,717 16,692 16,486 

Arbitrators Appointed 6,860 6,485 6,568 6,496 6,870

 

Activity Charged For 

Travel Days .46 .45 .45 .57 .48 

Hearing Days 1.11 1.10 1.07 1.10 1.14 

Study Days 2.40 2.34 2.43 2.40 2.37 

Total 3.97 3.89 3.95 4.07 3.99 

 

Average Charges 

Per Diem Rate $860 $883 $913 $962 $981 

Amount of Fee $3,605 $3,571 $3,780 $4,049 $4,039 

Amount of Expenses $335 $359 $391 $421 $380 

Total Charged $3,940 $3,929 $4,171 $4,470 $4,419 

 

9 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.