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Federal Mediation & Conciliation Service. Impact on Labor-Management Relations 2006 / 2007. F.M.C.S. Creation. Independent agency under Taft-Hartley amendments in 1947. Resolve collective bargaining disputes which threaten the free flow of commerce.

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federal mediation conciliation service

Federal Mediation & Conciliation Service

Impact on

Labor-Management Relations

2006 / 2007

Pittsburgh Field Office

f m c s creation
F.M.C.S. Creation
  • Independent agency under Taft-Hartley amendments in 1947.
  • Resolve collective bargaining disputes which threaten the free flow of commerce.
  • Neither a regulatory nor an enforcement agency, but a neutral designed to assist Labor & Management.

Pittsburgh Field Office

f m c s mission
F.M.C.S. Mission
  • Promote sound & stable L/M relations.
  • Prevent/minimize work stoppages through mediation assistance to parties.
  • Advocate collective bargaining, mediation & voluntary arbitration.
  • Develop the art, science & practice of conflict resolution.
  • Foster constructive joint L/M processes.

Pittsburgh Field Office

f m c s services
Collective Bargaining Mediation

Private, Public, & Federal Sectors

Relationship Development & Training

Customized training

Education, Outreach & Advocacy

Of collective bargaining processes

Alternative Dispute Resolution

In-lieu of litigation

Arbitration Services

International Program

F.M.C.S. Services

Pittsburgh Field Office

fmcs impact on u s economy
FMCS Impact on U.S. Economy
  • FMCS mediation in CBM disputes saved U.S. workers & businesses $9 billion from 1999-2004 by averting work stoppages
  • Reduced number of impacted workers by 43.2% (~4.3 million vs. 2.4 million)
  • Prevented 1,265 work stoppages between 1999-2004.

(Source: EPF 2005 Study)

Pittsburgh Field Office

collective bargaining mediation
Collective Bargaining Mediation
  • 2006 U.S. Statistics
  • 23,002 Intake cases
    • 4,486 closed (active)
    • 86% closed/agrmt.
  • 1,632 grievance mediation cases
  • 266 work stoppages (all size B.U.’s)

Pittsburgh Field Office

work stoppage trends
Work Stoppage Trends

Pittsburgh Field Office

Note: Preliminary data from FMCS-commissioned study

hot topics at the table
Job Security


Off-shore job losses


Staffing issues

Healthcare industry

“Foreign” nurse recruiting

Construction building trades

Mandatory O/T

State legislation

Pension Benefits

Defined benefits vs. defined contributions

Two-tier systems

“Freezing Plans” (IBM, HP, Verizon, Alcoa, Motorola)

Health Insurance

Active employees & retirees

Plan costs & design

Co-pays & cost sharing

“Fair Share Health Care” legislation introduced in 31 states

Hot Topics at the Table

Pittsburgh Field Office

why job security


Pittsburgh Field Office

job security concerns
  • Continuing decline of manufacturing sector jobs (GM, Ford)
  • Bankruptcy escalation
  • Off-shore job losses mounting
  • Lower wages overseas attractive to bottom line

Pittsburgh Field Office

job security issues at the bargaining table
Job Security Issues at the Bargaining Table

Competition and cost-cutting are driving the following issues:

  • Technology Adoption (Jobs lost to automation)
  • Outsourcing (Jobs contracted out)
  • Globalization (Jobs move overseas)

Pittsburgh Field Office


Nature of the work being done

How the work gets done


Who assesses the work

For whom the work gets done

Pittsburgh Field Office



  • Goods can be produced anywhere in the world… sometimes for less money.
  • To compete, employers need to find ways to control their costs.

Pittsburgh Field Office

why staffing in healthcare industry


Pittsburgh Field Office

Source: Employment Policy Foundation 2005

some underlying causes of nursing shortage
Hospital Acuity

“Specialty” demand continues to rise

Insufficient number of faculty in nursing programs to accommodate enrollment demands

Low retention rates for younger workers

Aging workforce

Within 10 years, 40% of RN’s will be 50 years old or older

½ of working RN’s will reach retirement age in next 15 years


Pittsburgh Field Office

why staffing in construction building trades


Pittsburgh Field Office

Source: Employment Policy Foundation 2005

a mounting labor shortage
A Mounting Labor Shortage
  • The NAHB reported in the Builders’ Economic Council Survey in May 2006 that, “every sector of the construction industry is experiencing some labor shortage. The numbers are highest in the need for finished and rough carpenters.”

Pittsburgh Field Office

a mounting labor shortage20
A Mounting Labor Shortage
  • According to the Home Builders Institute, the industry employed 6.7 million workers in 2001 and an additional 1.5 million are needed by 2010 just to sustain productivity.
  • According to the National Center for Construction Education and Research (NCCER), the average age of craft workers is 47.

Pittsburgh Field Office

why pension benefits


Pittsburgh Field Office

pension quick facts
  • 90% of CBA’s provide some form of pension and retirement benefits
  • 62% of unionized mfg. & 67% of unionized non-mfg. employers offer traditional defined benefit plan
  • 62% of unionized employers offer tax-deferred retirement savings plan (e.g., 401K)
  • 12% of unionized employers offer a cash balance plan
  • 38% of all union employers offer defined contribution plans
  • 32% of employers will consider pension increases in 2006

Pittsburgh Field Office

Source: BNA 2/2006

pension quick facts23
  • Pension plans of companies in the S&P 500 were 92% funded; and in State Retirement plans 81% funded as of 12/31/04. *
  • Some States with pension fund deficits have attempted to switch from defined benefit plans to defined contribution plans with mixed results:
    • Alaska
    • California
    • West Virginia

Pittsburgh Field Office

Source: * Wilshire Associates

the long term threats to pensions


Funding Rules

The Long Term Threats to Pensions

ERISA doesn’t guarantee safe funding levels by plan sponsors. E.G: UAL, in compliance with ERISA, but under-funded by $10 billion

PBGC carried a $23.5 billion deficit at the end of 2005


PBGC Deficit

Shift to PBGC

Level of under-funding in insured single employer plans is about $450 billion

Financially weak plan sponsors shift unfunded pension costs to PBGC

Pittsburgh Field Office

Source: Bradley Belt, executive director the Pension Benefit Guarantee Corporation, remarks to Federal Reserve Bank of Chicago's Bank Structure and Competition Conference, May 10. 2005

pension plan debate
  • Fiduciary litigation
  • Plan investment returns below expectations
  • Bankruptcies (Steel, airlines, glass)
  • PBGC liquidity ($23.5 billion deficit)
  • Pension Plan “freezes” and “terminations”

Pittsburgh Field Office

why health insurance


Pittsburgh Field Office


Health Care Costs and Labor StrifeIn 2005, health care costs were a strike issue in 66% of work stoppages

Pittsburgh Field Office

the classic debate at the table
The Classic Debate at the Table
  • Who’s covered?
  • What’s it going to look like?
  • Who’s going to pay for it?
  • How much are you going to pay?

Pittsburgh Field Office


The current system involves health expenditures that constitute over 15 percent of Gross Domestic Product (GDP)

Projected National Health Expenditures and Percent of GDP

* Estimated

Source: Centers for Medicaid and Medicare Services, 2003

Pittsburgh Field Office

rising health care costs a national pain
Rising Health Care Costs: A National Pain
  • Cumulative weight of premium increases since 2000 = 87%
    • Cumulative inflation rate since 2000 = 18%
    • Cumulative wage growth rate since 2000 = 20%
  • In 2000 - Total Annual Premium Family Coverage = $6,438/yr.
  • In 2006 - Total Annual Premium Family Coverage = $11,480/yr.

Pittsburgh Field Office

Source: Kaiser Family Foundation survey 2006


Rising Health Insurance Premium Increases

Continue to Outpace Earnings and Inflation

Pittsburgh Field Office

labor perspective union vs nonunion
Labor Perspective –Union vs. Nonunion

Union employees contribute less, on average, to health insurance premiums than nonunion employees

Average Monthly Employee Contribution

Single Coverage

Family Coverage

30% lower

21% lower

Average percent of premium contribution required:

19% 10% 32% 16%

Pittsburgh Field Office

Source: BLS National Compensation Survey, 2005

relationship development training
Relationship Development & Training
  • 2006 U.S. Statistics
  • Active in 2,445 joint training/process cases

Pittsburgh Field Office

alternative dispute resolution
Alternative DisputeResolution
  • 2006 U.S. Statistics
  • 1,269 assigned cases
  • Federal agency ADR contracts, public sector and private sector employment mediations

Pittsburgh Field Office

a d r growth u s
A.D.R. Growth(U.S.)

Pittsburgh Field Office

common reasons for not reaching agreement
Ineffective communications

Inaccurate info./data

Personalities / emotion

Morals differ

Internal/external political pressure

Un-realistic expectations (economic, status, etc.)

Perception of “Fair”


Common reasons for not reaching agreement

Pittsburgh Field Office

why use mediation


Pittsburgh Field Office

why mediation can be an effective tool for conflict resolution
Why mediation can be an effective tool for conflict resolution
  • Parties retain control of resolution
  • Voluntary (in most cases)
  • Informal vs. formal process
  • Time efficient
  • Cost effective

Pittsburgh Field Office

estimated direct financial impact of work stoppages by year
Estimated Direct Financial Impact of Work Stoppages by Year

Pittsburgh Field Office

Source: Employment Policy Foundation 2005

early fmcs intervention is key to reducing work stoppage duration
Early FMCS Intervention is Key to ReducingWork Stoppage Duration

Pittsburgh Field Office

Source: Employment Policy Foundation 2005

when mediation may not be appropriate
When mediation may not be appropriate
  • Pre-determined, inflexible positions
  • When a “directed” decision is sought
  • “Principals”

Pittsburgh Field Office

federal mediation conciliation service42

Federal Mediation & Conciliation Service

Robert S. Ditillo


One Oxford Centre, Suite 2570

301 Grant Street

Pittsburgh, PA 15219


Pittsburgh Field Office