Social dialogue & conflict resolution mechanisms

Social dialogue and conflict resolution mechanisms in the acceding countries: Cyprus, the Czech Republic, Latvia, Lithuania and Slovakia

Prague, 14-16 January 2004

Speech abstract - Peter J. Hurtgen
Director, U.S. Federal Mediation & Conciliation Service

A roadmap to labor peace in the USA: the mission and functioning of the Federal Mediation & Conciliation Service

Introduction: FMCS’ mandate, structure and operations reflect an underlying principle in U.S. labor relations of self-determination by the parties.

When Congress created FMCS in the years following the Second World War, during a period of great labor strife in the country, it gave the agency a convening and not an adjudicatory or enforcement function. This narrow mandate reflects a general principle of self-determination by the parties that underpins U.S. Labor Relations. That principle, in turn, reflects an underlying American belief in the value of free labor markets and free markets in general. Much has been discussed about this philosophical difference between the E.U. and the U.S. and its economic and social impacts. This presentation will not assess whether the U.S. model is better or worse. An underlying theme, however, will be that the latitude that the parties have to negotiate the terms of their employment relationship in the U.S. system has provided a fertile environment for the development of joint, interest-based problem solving and other innovative methods of dispute resolution. While parties in the E.U. and other regions also have latitude to fashion the terms of their own agreements, the phenomenon is more pronounced in the U.S.

I. Interest-based dispute resolution: a process that reflects the parties’ relative freedom to come to their own terms of agreement

At the FMCS, a case is generated when, pursuant to their obligations under the law, the parties give each other 60 days notice of intention to negotiate a new contract as well as 30 days notice to FMCS. Once FMCS receives notice of pending negotiations, it assigns the matter to a mediator in the area where they will take place. However, the parties utilize FMCS’ services on a strictly voluntary basis.

The fact that mediation is voluntary in the U.S. reflects the fact that the relative bargaining power and negotiating ability of the respective parties determine the outcome of negotiations. The party who has more of both winds up getting more of its interests satisfied in the negotiations. In other words, collective bargaining in the U.S. is not a legal determination of the parties’ respective substantive obligations, rather it is a power-based dynamic designed to distribute resources and contractual benefits. Legal rights, such as those found in statutes concerning wages and hours, occupational health and safety, pension security, and discrimination in the workplace, only form outer limits or, in the case of Taft-Hartley (Collective Bargaining) Act, “rules of engagement” within which parties have much latitude to make their own agreements and conduct their own labor relations. The only remedies in collective cases for parties who are unable to agree on the substantive terms of a collective contract are economic weapons (i.e., strikes, lock-outs, and tactics in between). In individual cases, except for protections afforded by the laws alluded to above, and other state and federal laws protecting workers (e.g., whistle blowers), workers without collective contracts are employees at will, which means they can be fired at any time and for any reason.

All of the above means that, as a general rule, in the U.S. the parties have much more room within which to thrash out an agreement than is common in many other countries. Hence the development of joint, Interest Based Problem Solving and other innovative methods of dispute resolution. In addition, since most negotiations take place at the company level, and not on a nation-wide or even a sectoral basis, the parties have even more latitude to particularize the terms of their agreement to their own particular situations.

The interest-based problem solving model

The purpose of Interest Based Dispute Resolution is to help the parties to work together to generate more ideas to satisfy not only their own respective interests, but also their mutual interests. By having discussions at the level of interests, the parties can generate many more options to satisfy those interests than they would be able to if their discussions were limited to the exchange of fixed positions. The Interest Based Problem Solving model has specific techniques and principles, which we hope to discuss in more depth later in the Workshop.

How the principle of self-determination affects FMCS on an institutional level

The parties’ great latitude to reach their own agreements at the company level affects FMCS on an institutional level in several ways. For one thing, as was mentioned above, with very few exceptions the mediation process is completely voluntary. In fact, 73% of parties reject FMCS’ assistance in their negotiations. This makes it all the more critical that mediators retain their acceptability with the parties. Personal relationships between the mediators and the parties matter more. FMCS must have in place a stringent mediator code of ethics in order to ensure the public that the process is fair. Mediators must take care to maintain a strict appearance of neutrality and avoid stances on public issues that may alienate some of their constituents. The FMCS Director is appointed by and answers only to the President of the United States. In order to avoid the perception that it is partial to any sector, FMCS is independent of the Labor Department or any other branch of US Government.

Finally, parties’ great latitude to influence their own negotiating outcomes in the U.S. has greatly influenced the services that FMCS mediators deliver. In the last three decades, FMCS mediators have steadily increased the frequency of their interventions focused on conflict prevention as opposed to conflict resolution. Whereas thirty years ago an FMCS mediator’s workload consisted 90% of dispute cases and only 10% preventive cases, nowadays the average mediator’s caseload consists of only 65% dispute cases and 35% preventive cases. There are specific conflict prevention programs that FMCS mediators deliver, and we hope to be able to share some with you during this Workshop.

II. Rights dispute resolution: a last resort

As was mentioned above, the substance of collective negotiations is generally not rights based in the U.S., except for the procedure of collective negotiations (e.g. the duty to bargain in good faith), as well as broad areas in which the state has a public policy interest in legislating (e.g., wages and hours, health and safety, pensions, discrimination). In general, rights based processes are rarely used in the first instance, and are instead a last resort when more interest based processes fail.

It is worth mentioning a few areas in which rights based processes of dispute resolution are used in U.S. Labor Relations. Collective bargaining agreements universally contain a grievance procedure, which specifies the process for handling cases in which parties lodge complaints against one another for alleged violations of the collective bargaining agreement. If the grievance procedure and the mediation component of that procedure (if there is one) fail to resolve the matter, then it is common to utilize arbitration, a rights based process, to decide it. The FMCS retains a panel of over 1300 independent arbitrators, who are not federal employees, for the purpose of assisting parties in that situation.

Some grievances, if they are found to violate the Taft-Hartley Act, may give rise to a complaint for an Unfair Labor Practice before the National Labor Relations Board. This is also a rights-based procedure to determine whether the Act has been violated. This process, however, is perceived by many unions to be ineffectual because it is slow and often not as effective as other power-based methods of asserting their interests.

III. Individual dispute resolution: absent mediation, plagued by expense and delay

In individual cases, the employment at will doctrine limits workers’ ability to challenge adverse employment actions. Cases brought under the most important exception to the doctrine, those alleging workplace discrimination, take place before the Equal Employment Opportunity Commission (EEOC). The EEOC has a tremendous backlog of cases, and an individual’s complaint takes several years to come to a resolution in that forum. To make matters worse, once there is a “resolution” in that forum, only then is a complainant given a “right to sue” letter that permits him or her file a complaint in federal court. Like the EEOC, the federal courts are notorious for protracted and expensive litigation, due to, among other factors, very broad discovery rules and allowance of numerous dilatory motions (requests for a specific order) to the court. In the case of most of the other individual rights cases, with the exception of grievances alleging a violation of the collective bargaining agreement, there is also a right of appeal to a federal court, which are similarly unappealing due to delay and expense.

Therefore, there is a great incentive for parties to try to redress their complaints through the mediation process (if one is available), which relies more on interest based techniques of conflict resolution. For this reason, in recent years the FMCS has expanded its scope in order to perform many Equal Employment Opportunity and other individual rights mediations, such as supervisory disciplinary cases for the U.S. Postal Service and Wage & Hour cases brought by the U.S. Department of Labor, because collective bargaining cases are declining in number. There are two principal reasons for this phenomenon. First, collective contracts are longer than they used to be. They formerly were 1-2 years in duration, and now are often 3-5 years long. Second, the unionization rate has been gradually declining in the U.S. since the 1960s, and is now down to below 13% of the U.S. labor force.

In the coming years, FMCS plans to continue to adapt to the changing workplace environment and the types of conflicts that it engenders. A major component of this effort is the Dynamic Adaptive Dispute System initiative (“Dyads”). Through the Dyads initiative, FMCS plans to serve in a facilitative role to help the key stakeholders in an organization develop a process for managing and resolving conflict that is appropriate for their own unique circumstances and organizational culture. This initiative is still in the development stage at the present time.

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