Friends of FMCS History Foundation

The history of dispute resolution, mediation and arbitration

The Wall Street Journal Article

On May 31, 2001, during the waning months of the Richard Barnes Directorship (Director Peter Hurtgen was confirmed in 2002 after the lengthy transition due to the legal challenge of the 2000 election) an article was published by the Wall Street Journal which focused on the ever-growing non-labor mediation work of FMCS.  Many were pleased with the article but some, including the Director, were concerned that the article “was fraught with misquotes, omissions, and inaccuracies which trivializes the work of this Agency.” “I said to Ms. Chen in my interview that FMCS is a model government agency; it is non-regulatory, non-enforcement, and performance dependent. If we do not add value to the collective bargaining or ADR process, we would not exist, said Barnes”.  Why that reaction?  Many mediators at the agency at that time were still adapting reluctantly to the new non-labor mediation work and did not want the ADR work to be spotlighted in a positive way.

Here is the Article Reprinted

Government Labor Mediation Agency Expands Its Repertoire at $85 an Hour

By Kathy Chen Staff Reporter of The Wall Street Journal

May 31, 2001 11:59 pm ET

WASHINGTON — In 1947, the year the Federal Mediation and Conciliation Service was formed to ease labor-management conflicts, there were 270 strikes, each one idling more than 1,000 workers. Last year, there were 39.

So what’s an obscure government agency charged with preventing labor walkouts to do? Diversify, of course. This one is becoming referee to the world — at $85 an hour.

When Hasidic Jews in Postville, Iowa, bickered with officials of the predominantly Christian town over wastewater treatment, both sides turned to the FMCS. Two mediators isolated negotiators in separate hotel rooms for four days, shuttling back and forth until the parties hammered out a draft agreement that called for splitting the cost of building a water-treatment plant for a kosher meat-processing factory.

When rival gangs in a Florida high school couldn’t get along, FMCS mediators taught them how to use a computer chat-room program so they could resolve differences in private, secure discussions with less risk of fist fights. In Indonesia, when hostile ethnic groups prepared to trade Molotov cocktails, a U.S. mediator helped defuse tensions by suggesting that the local power plant postpone a planned power outage.

And when a unit of Bechtel Corp. wanted to avoid a repeat of racial violence that had plagued a previous job, it brought FMCS mediators to a construction site on St. Croix to teach managers there to be more sensitive to the locals.

“We’re constantly looking for new places to transfer our skills, or there’s no reason for us to exist,” says C. Richard Barnes, the agency’s director. The mediators also help unions and companies get along in between contract talks. And strikes, although there are fewer of them, still occupy a great deal of the mediators’ time: Recent walkouts have been more adversarial, have dragged on over longer periods and have affected major segments of the economy more than they once did.

Congress created the FMCS shortly after World War II, as emboldened G.I.s returned to the work force and strikes surged. Forty years later, in the 1980s, the agency was well-positioned for the rise of a new field, “alternative dispute resolution,” which grew as potential litigants looked to solve conflicts outside congested courts. In 1990, Congress authorized the FMCS to mediate nonlabor cases for government agencies. Since then, it has expanded into overseas disputes and the private sector in the U.S. The FMCS employs 218 mediators today, down from a high of 315 in the late 1970s.

The FMCS’s nonlabor work makes up about a quarter of its workload, generating $1.4 million in fees last year. Its hourly rate of $85 is a bargain compared with hourly fees of $200 to $300 that are common among for-profit providers. Some private mediators fret about unfair competition. “Any time an organization can significantly underbid the private sector based on government subsidies, that’s a troubling issue,” says Daniel Bowling, chief executive of the Association for Conflict Resolution, a Washington trade group. The FMCS says it doesn’t charge more because it is a government agency and only wants to cover costs.

Other providers say there’s plenty of conflict to go around. “We certainly think the more the merrier,” says retired Judge Curtis von Kann, a mediator with Washington-based Judicial Arbitration Mediation Service, known as JAMS, the largest private provider of alternative dispute resolution. “There’s a tremendous demand for these services, and it’s very healthy to have different providers, including the government,” he says.

The FMCS says it helps parties reach a resolution in 78% of nonlabor cases, slightly less than the 90% success rate it claims for labor cases. Unions and management are usually in a long-term relationship, with equal stakes to lose; the parties in other sorts of cases “don’t have as much impetus to save the relationship,” says Mr. Barnes.

Early in his FMCS career, John Wagner mediated in labor talks such as those between the machinists’ union and smokestack manufacturers over wages and health benefits. In the early 1980s, he volunteered for nonlabor disputes. His more recent workload has included brokering peace between two bickering officials at the Federal Bureau of Prisons (he suggested they go out to lunch) to trying to persuade medical schools to accept a 13-year-old applicant.

No one questions a labor mediator’s legitimacy. But in other types of disputes, Mr. Wagner sometimes has to defend his presence. When Sen. Paul Wellstone, a Minnesota Democrat, called FMCS mediators to reconcile motorboat and snowmobile users and environmentalists fighting over two patches of Minnesota wilderness, the agency was accused of aiding the senator’s re-election campaign. Mr. Wagner says he had to craft a plan for news conferences and op-ed pieces “to educate people” that mediators are “facilitators of dialogue,” not “decision-makers.”

In that conflict, FMCS mediators helped resolve a dozen smaller issues in 1997. Then Congress settled the central question — in favor of the vehicle users. That led some people involved to question the value of FMCS’s intervention. “Should an organization that’s good at what it does — labor mediation — apply itself to a national-resources dispute?” asks Richard Duncan, a lawyer who represented environmental groups. The FMCS “wasted incredible time and money and effort.”

Mr. Wagner says he’s confident the process worked. “We Americans have a tendency to look at things in black and white, win or lose,” he says. “Mediators don’t take this position. If you begin on the road to resolution, the journey is important.”

Recently, he was called to referee among American Indian tribes fighting over $275 million in annual federal funds for reservation roads. He had to grapple with obscure facts and formulas — such as how much it costs to carve roads into the ice of the Alaska tundra. (The answer: about $100,000 a mile.) Just setting ground rules for the talks took four months.

Mediating among 13 federal government representatives and 29 tribal negotiators, he says he’d just let them shout it out — for a while. “Usually, people start to shout when they get very frustrated,” Mr. Wagner says. “You judge how long it goes, then you shock them into reality by telling them to wrap it up in 30 words or less.”

The techniques don’t always work. Mr. Wagner remembers a few years back trying to mediate in his own home, in a discussion about his two teen sons’ curfews. He talked about accommodating his interest (safety) and theirs (late-night access to the family car). “‘Dad,'” Mr. Wagner recalls one of them saying. “‘Don’t use this.'”

FMCS continues to grow and promote this non-labor mediation work.

Updated: February 6, 2022 — 7:06 pm
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