1

2006 
1

 Message from the Director 

This past August, FMCS’ 13th National Labor-Management Conference brought more than 1,500 

people representing labor and management interests together in Chicago. In addition to providing 

60-plus workshops over three days, FMCS gave attendees the opportunity to hear the thoughts of 

some of today’s most important players in labor-management relations, including Secretary of 

Labor Elaine Chao, AFL-CIO Secretary-Treasurer Richard Trumka, UNITE/HERE Hospitality 

Industry President John Wilhelm, NLRB General Counsel Ronald Meisburg, and The Permanente 

Company President and CEO Francis Crosson. The success of our conference illustrates 

precisely what FMCS does best: providing opportunities for labor and management to come 

together and discuss their common issues. 

With the rapid rise of global free trade and the impending retirement of the baby boomer 

generation, resolving issues such as health care and pension benefits can strain existing employer 

and union relationships. For U.S. companies, succeeding in the global economy requires, among 

other things, a flexible and cost-effective labor force. Yet, higher benefit costs place significant 

economic burdens on employers and employees alike. Helping employers and unions avoid 

economically disruptive work stoppages arising from these and other issues constitutes the core 

work and focus of FMCS. 

The financial consequence of strikes and lock-outs can be steep. Using a model developed for the 

Agency in 2005 by the Employment Policy Foundation, FMCS estimates that work stoppages 

over the past two years caused employees to lose an estimated 43 million working hours and cost 

$950 million in lost wages. These stoppages also reduced company profits by $263 million. 

Disruption to ancillary businesses over this period is estimated to have cost an additional $1.1

billion. 

However, these costs would be even greater without the positive effects of FMCS’ mediation 

services. In FY 2006 alone, through early intervention in collective bargaining disputes, FMCS is 

estimated to have prevented 251 work stoppages and reduced work stoppage duration in 196 

cases, preventing the loss of at least $1.7 billion in employees’ wages and company profits for 

U.S. businesses. 

FMCS Director 

Arthur F. Rosenfeld

Report for 

Fiscal Year 2006 
2

The agency believes that early intervention is critical to reducing the financial consequences of 

work stoppages. In FY 2006, FMCS involvement at any time prior to a contract expiration 

reduced work stoppage durations by an average of 25 percent. 

I am very proud of the services this Agency’s mediators provide and of their professionalism and 

dedication to our mission. Nationwide in FY 2006, our mediators were involved in nearly 5,500 

collective bargaining disputes. In 86 percent of those cases, FMCS assisted the parties in 

achieving collective bargaining settlements. In addition, we continue to train the labormanagement community on methods designed to improve relations. FMCS provided relationship 

development and training in 2,445 cases during this fiscal year. Our employment mediation 

services to federal, state and local governments continue to be in wide demand as more units of 

government turn to FMCS as an alternative to courtroom litigation. During FY 2006, FMCS 

mediated 1,022 employment-related disputes, and mediated 1,625 grievance cases. 

In addition to our domestic work, FMCS provides overseas training on a reimbursable basis at the 

request of foreign governments and non-governmental organizations in support of international 

core labor standards and advancing free-market institutions. To cite an important example of this 

work, FMCS is taking part in an ongoing initiative by the U.S. government to engage the 

People’s Republic of China on labor and rule of law issues. In FY 2006, a team of four FMCS 

mediators worked with the U.S. Department of Labor and the Chinese Ministry of Labor and 

Social Security to help establish labor relations committees in China and to train Chinese 

government arbitrators in mediation. This project, involving three trips to Qingdao, China as well 

as work in Beijing, has contributed to the establishment of fifteen labor relations committees. A 

significant outcome of this initiative has been a continuing dialogue with Chinese government 

officials and leading academics on the U.S. labor relations system and the importance of 

collective bargaining and the recognition of workers’ rights in a free-market economy. With the 

recent proposed reform of Chinese labor law regarding the resolution of workplace disputes, 

FMCS is well-positioned to continue its engagement with the government of China on labor 

issues of concern to U.S. workers and the companies that employ them. 

As global competition and domestic economic and demographic forces continue to transform 

American workplaces, the Federal Mediation and Conciliation Service provides state-of-the-art 

assistance to employers and employees as they confront the challenges of modern labormanagement relations. 

 Arthur F. Rosenfeld 

 Director 
3

 FY 2006 Agency Services 

Agency Mission 

For fifty-nine 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 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 Service is collective bargaining 

mediation. It is a voluntary process in which mediators serve as third-party neutrals to 

facilitate the settlement of issues in the negotiation of collective bargaining agreements. 

1. Collective Bargaining Mediation: Initial and Successor Contract 

Negotiations 

The Agency provides collective bargaining mediation for initial contract negotiations, 

which take place between an employer and a newly certified or recognized union 

representing its employees, and for negotiations for successor collective bargaining 

agreements. Mediation services are provided not only to the private sector, but also to the 

public sector, including federal agencies, and state and local governments. Mediators 

have no authority to impose settlements; their goal is to assist the parties in working 

through contentious issues in order to reach a mutually acceptable agreement. Through 

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

stoppages on the U.S. economy. 

In FY 2006, FMCS mediators were actively involved in 5,484 collective bargaining 

contract negotiations in every major industry throughout the United States. 

2. Relationship Development and Training Programs 

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

conflict is also an important goal. The agency’s relationship-building training programs 

are designed to improve labor-management relationships and to develop approaches 

toward collective bargaining that prevent friction or disputes from arising. These kinds of 

training programs improve the quality of the parties’ relationships and make mediation 

more effective. 

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

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

leaders in the collective bargaining community. 
4

3. Grievance Mediation 

Grievance mediation involves the use of a neutral party to mediate grievances that may 

arise during the life of a collective bargaining contract. This service is provided to the 

private and public sectors. Continuing a recent trend toward longer term contracts, 24 

percent of the contracts negotiated in FY 2006 were of more than 3 years duration. These 

longer contract terms increase the importance of resolving contentious issues arising 

during the term of a contract. Left unresolved, these grievances have the potential to 

become major sources of contention between the parties in subsequent negotiations. In 

FY 2006, FMCS mediated 1,625 grievance mediation cases and helped the parties reach 

agreement in over 1,200 of these. 

4. Arbitration Services 

National labor policy favors arbitration for settling contractual disputes that may arise 

over the interpretation or implementation of a contract provision. FMCS’ Office of 

Arbitration Services maintains a roster of approximately 1,400 private sector 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 2006, the Office of Arbitration Services processed nearly 17,000 requests for 

arbitration panels from labor and management customers nationwide. Arbitrators on the 

FMCS roster heard and decided 2,473 labor arbitration cases. 

5. FMCS Institute 

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. 
5

6. 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 Agency 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 2006, FMCS mediated 1,022 employment cases. 

7. 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 our services. Emerging democracies often struggle to compete 

effectively in a globally integrated marketplace. Part of their struggle includes the 

implementation of an effective labor relations system. Other nations and foreign 

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

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

International training programs are also a knowledge-sharing experience: FMCS 

mediators 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 are designed 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. Equally important, FMCS helps establish the labor relations institutions that 

are essential to the smooth functioning of free market economies. 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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Mediation Services Program Data

PROGRAM SERVICES FY 2003 FY 2004 FY 2005 FY 2006

1. COLLECTIVE BARGAINING MEDIATION 

Assigned Cases1 19,516 18,4932 17,102 15,072 

Private Sector 17,568 16,738 15,489 13,539 

Public Sector (state and municipal government units) 1,329 1,295 1,160 1,219 

Federal Sector 619 460 346 314 

Mediated Cases3 6,640 4,748 5,215 5,484 

Private Sector 4,912 3,274 3,847 3,874 

Public Sector (state and municipal government units) 1,218 1,077 1,086 1,319 

Federal Sector 510 397 256 291 

Activity Rate4 34% 26% 30% 35% 

Number of Mediated Cases Settled 4,988 3,768 3,557 3,864 

Percentage of Mediated Cases 

Settled through FMCS

74% 79% 87% 86% 

Activity Rate in Significant Cases5 50% 51% 47% 45% 

2. GRIEVANCE MEDIATION 

Assigned Cases 1,419 1,639 1,705 1,632 

Mediated Cases 1,407 1,544 1,675 1,625 

Private Sector NA 1,168 1,334 1,219 

Public Sector (state and municipal government units) NA 205 270 270 

Federal Sector NA 171 141 136 

Number of GM cases settled NA 1,264 1,212 1,219 

Percentage of Cases Settled 

Through FMCS

NA 82% 72% 75% 

3. RELATIONSHIP-DEVELOPMENT AND TRAINING 

Number of Training Classes Provided 2,594 2,281 2,257 2,445 

Private Sector 1,693 1,565 1,315 1,552 

Public Sector (state and municipal government units) 901 599 749 730 

Federal Sector 213 117 117 163 

4. EMPLOYMENT MEDIATION 

Number of Employment Mediation 

Cases6

1,310 1,596 1,446 1,022 

Federal Sector 525 1,417 1,202 993 

Public Sector (state and municipal government units) 8 5 47 13 

Private 628 174 79 16 

Number of EM cases settled7 773 718 484 523 

Percent of EM Cases Settled 59% 45% 48% 51% 

5. OUTREACH 

Number of Outreach cases8 5,392 4,741 3,513 3,859 

 1

 Section 8(d) of the Act requires that any employer or labor organization provide notice to this Agency 60 days prior to contract 

expiration. Not all cases providing notices are assigned. In FY 2006, the FMCS intake of cases exceeded 23,000. 2

 In FY 2004, the Agency determined that it was no longer appropriate to group collective bargaining mediation cases with grievance 

mediation cases. 3

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

negotiations. 4

 Defined as the number of closed cases where there was at least one meeting, divided by the number of total closed assignments. 5

 Significant cases are generally defined as situations where the bargaining unit exceeds 1,000 members. 6

 This number includes EM cases, plus dispute design cases, regulatory cases, and cases falling into the category of ‘other.’ These 

case types are included in the EM category because they were included in prior fiscal years. All services under these case types have 

been provided on a reimbursable basis. 7

 Estimated for FY 2003 and FY 2004. 

8

 FMCS requires all mediators to engage in outreach efforts. These 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. 
7

Work Stoppage Information 

2002 2003 2004 2005 2006 

Work stoppages carried from preceding FY 60 41 29 25 52 

Work stoppages beginning within FY 308 277 269 301 247 

Work stoppages closed within FY 327 289 273 274 269 

Work stoppages open at end of FY 41 29 25 52 30 

Average duration of work stoppages in closed cases 

(number of days) 53.7 60.5 76.7 41.1 70.9 

Estimated number of worker-hours lost due to work 

stoppages (1,000s) 17,686 17,078 71,501 18,064 25,175 

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 

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 
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Arbitration Services Program Data

Activity 2002 2003 2004 2005 2006 

 

Panel Requests 17,282 17,332 16,382 15,370 15,572 

Panels Issued9 18,885 19,023 18,033 16,787 16,854 

Arbitrators Appointed 8,335 8,595 7,875 7,592 6,860 

 

Activity Charged For 

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

Hearing Days 1.09 1.15 1.09 1.15 1.11 

Study Days 2.44 2.35 2.37 2.40 2.40 

Total 3.98 3.98 3.91 4.01 3.97 

 

Charges 

Per Diem Rate $721 $764 $802 $836 $860 

Amount of Fee $2,884 $3,048 $3,197 $3,396 $3,605 

Amount of Expenses $318 $364 $344 $336 $335 

Total Charged $3,202 $3,412 $3,542 $3,732 $3,940 

 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.
9

2002 2003 2004 2005 2006 

Total Number of Issues 1,989 2,314 2,581 2,629 2,473 

 

General Issues 463 506 417 308 320 

 Overtime Other Than Pay10 

 Distribution of Overtime 26 35 41 2 6 

 Compulsory Overtime 12 9 3 2 1 

 Other Overtime 10 12 1 4 4 

Seniority 

 Promotion & Upgrading 52 63 42 26 40 

 Layoff Bumping & Recall 48 71 69 57 39 

 Transfer 21 14 9 0 0 

 Other Seniority 25 35 15 8 24 

 Union Officers11 14 13 21 0 1 

 Strike & Lockout 2 1 2 1 0 

 Working Conditions12 29 19 20 12 23 

 Discrimination 24 17 18 18 18 

 Management Rights 63 71 61 72 85 

 Scheduling of Work 67 47 61 62 50 

 Work Assignments 70 99 54 44 29 

 

Economic Wage Rates & Pay Issues 229 233 209 167 178 

 Wage Issues 36 42 95 134 156 

 Rate of Pay 60 60 33 7 1 

 Severance Pay 8 5 1 2 1 

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

 Holidays & Holiday Pay 26 21 14 8 7 

 Vacations & Vacation Pay 39 27 26 0 4 

 Incentive Rates & Standards 7 15 9 3 1 

 Overtime Pay 46 53 25 13 8 

 

Fringe Benefits Issues 99 112 104 100 127 

 Health & Welfare 58 61 46 47 48 

 Pensions 8 11 8 7 19 

 Other Fringe Issues 33 40 50 46 60 

 

Discharge & Disciplinary Issues 947 1,091 996 937 913 

Technical Issues 86 97 69 47 59 

 Job Posting & Bidding 38 43 39 43 43 

 Job Evaluation 11 21 14 1 14 

 Job Classification 37 33 16 3 2 

 10 Overtime pay issues included under this category are economic, wage rates and pay issues 11 Included in this classification are issues concerning super seniority and union business. 12 This classification also includes issues concerning safety.
10

2002 2003 2004 2005 2006 

Scope of Agreement 65 53 58 50 28 

 Subcontracting 41 36 44 42 24 

 Jurisdictional Disputes 14 5 7 7 4 

 Foreman, Supervision, etc. 8 9 7 1 0 

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

 

Arbitrability Issues 215 361 289 219 191 

 Arbitrability of Grievances 100 139 96 38 26 

 Procedural 60 102 62 68 96 

 Substantive 23 25 18 28 37 

 Procedural & Substantive 17 12 16 10 17 

 Other Arbitrability Questions 0 0 0 0 0 

 Not Elsewhere Classified 115 83 97 75 15