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Mediation Plans



has as a major responsibility "to inquire faithfully, honestly, and im-
partially into labor-management problems of all types, and secure facts
which will lay the foundations for future progress in the whole field
of labor relations." Report of Board of Trustees, March 9, 1946,
page 1031.

Phillips Bradley Milton Derber

Director Research Co-ordinator

Ralph Norton

Research bv Lucille Brown


Volume 45; Number 16; October 29, 1947. Published every live days by the University of
Illinois. Entered as second-class matter at the post office at Urbana, Illinois, under the Act
of August 24, 1912. Office of Publication, 358 Administration Building, Urbana, Illinois.
Acceptance for maihng at the special rate of postage provided for in Section 110.^, Act of
October 3, l')17, authorized July 31, 1918.


Recent interest in mediation of labor disputes has Ijeen shown at
all levels of government — federal, state, and municipal. This inter-
est was given additional impetus when the War Labor Board was
dissolved at the close of the war and at the same time the number
and severity of labor disputes was increasing.

In addition to its regular functions, the U. S. Conciliation Serv-
ice had shown signs of interest in local and area plans for settling
labor disputes. A report issued by the American Municipal Associa-
' tion in Alay, 1947, describes one of these local plans as follows:

Possibility of future widespread establishment under Federal auspices
of industrial relations groups similar to the labor-management committees
provided for by the 'Toledo Plan' is indicated by the creation in late Decem-
ber, 1946, of a 'Labor-Management Assembly' in Philadelphia under the
sponsorship of the U. S. Department of Labor. Composed of 22 representa-
tives of labor, management, and the public, this 'assembly' was set up
under the supervision of the director of the U. S. Conciliation Service, an
arm of the Labor Department, and assigned the following functions:

(1) To review the work of the U. S. Conciliation Service's Philadelphia
branch office, checking especially the effectiveness of its mediation efforts
and the impartiality of its conciliations;

(2) To assist in the mediation of disputes which threaten to disrupt the
industry or the economy of the area ; and

(3) To refer such disputes to a 'peace panel,' a subcommittee of the
"assembly," having an equal number of labor and management representa-
tives, with the panel attempting to settle the differences but without making
any findings or public recommendations.

The extension of conciliation services along regional lines is
now- in the hands of the newly created Federal Mediation and Con-
ciliation Service. This agency was set up by the Labor Management
Relations Act, 1947, to replace the U. S. Conciliation Service and
is independent of the Department of Labor.

Among the states. New York, Massachusetts, New Jersey,
Michigan, and Illinois, have functioning mediation and conciliation

Interest in municipal mediation has been translated into action
and working plans in only a few cases, including Toledo, Louisville,
Boston, and New York, among others. The usual practice in cities
where such plans do not exist is for the Mayor to take action only
when the "labor sittiation" so obviously threatens the public interest


as to create serious difficulty in the community. This has been
described as crisis action and does nothing in the way of removing
the causes of labor disputes.

This Bulletin is limited to the consideration of two questions:
First, what general and specific operational problems are encoun-
tered by any municipal mediation agency ? Second, under what con-
ditions should this type of mediation facility be extended to other
cities, and with what modifications ? Since analysis must wait upon
description, some idea of the workings of these plans will be given
before proceeding to analyze their difficulties.

Toledo Agencies Past and Present

Any discussion of municipal labor plans must begin with Toledo,
the trail blazer in municipal mediation.

A series of disastrous strikes, threatening to disrupt the indus-
trial life of the community, resulted in the original Toledo Industrial
Peace Board. The Board was inaugurated in 1935 with the aid of
Edward F. McGrady, then Assistant U. S. Secretary of Labor. The
Board as it was finally constituted was made up of 18 members —
five management, five labor, and eight public representatives. The
key to the successful operation of the Board was its director,
Edmund Ruffin, a former newspaper reporter, who maintained
direct and vital contact with the parties involved in any controversy.
He called upon Board members only in those cases proving impos-
sible of direct and immediate settlement by him and was largely
responsible for the success of the Board. There was no established
procedure and no compulsion to use the Board or to abide by its
suggestions. The only pressure was that exercised by the local news-
papers, which consistently emphasized the public interest in the
peaceful settlement of disputes.

Board Policies. The policies of the Board drawn up by
McGrady to insure its successful operation were quoted in the
Toledo City Journal of January 22, 1938 as follows:

1. The Board will never at any time have authority to order anyone to
do anything.

2. Co-operation between labor, management and the Board will be
entirely voluntary.


3. Members of the Board will represent the conimunity at larj^e rather
than an}' faction or group.

4. The Board shall merely mediate, which is to say make recommenda-
tions or suggestions, which ma\- be mutually approved or rejected.

5. The Board shall never arbitrate, which is to say it shall not, even by
mutual request, make "binding" or "final" decisions which both sides must
accei)t. These might lead to loss of confidence in the Board no matter how
fair the decisions.

6. The Board will never take a vote on the rightness or wrongness of
the issues in a dispute. No judge or jury attitude will ever be displayed.

7. The Board will operate with an irreducible minimum of publicity.

8. The Board will not interfere with or assist in union organization

9. The Board will take no positions on such questions as "open shop"
or "closed shop."

.\lth(jugh operating on a small scale, the Board handled success-
fully over 100 major and minor disputes. The substantial reduction
in the amount (^f labor conflict in Toledo won national fame and
gradttally other cities facing the same problems took notice of it,
sent observers, and adopted similar plans.

During the war the functions of the Toledo Industrial Peace
lUjard were gradually assumed by the National War Labor Board
and other wartime government agencies. As a result, the Board was
disbanded in 1943.

In 1945 as the war's end seemed imminent, it was decided to
appoint a committee to study labor-management relations in Toledo;
If conditions warranted, machiner}- was to l)e set up to prevent and
settle fitture labor conflict.

Postwar Committee. After many meetings and discitssions,
the committee drew up an Industrial Relations Charter enumerating
the principles upon which operation of any mediation group would
be based. The principles entimerated in the charter included the

1. That management and labor each recognize and respect the preroga-
tives and responsibilities of the other.

2. That there be made available for voluntary utilizati(Mi, mediation,
fact-finding and arbitration facilities.

v3. That an educational program to promote better understanding be-
tween management and labor be imdertaken.


This Charter contained also the structural framework of a proposed
Labor-Management-Citizens Committee and was adopted by the
planning committee in November of 1945. In February, 1946, a city
ordinance was passed establishing a permanent LMC Committee
and incorporating the Charter into law. By June of that year a per-
manent office was opened and a full-time Executive Secretary ap-
pointed. The members of the original investigating committee were
appointed to the permanent LMC Committee.

The LMC is made up of 18 members receiving no salary for
their work — six each from labor, management and the public —
appointed by the Mayor for one year. The purpose of this Commit-
tee, as stated in its enabling ordinance, is that it should act as
". . . the directing body for the purpose of implementing and
effectuating the purposes and principle of the Charter . . ."

Dispute Procedure. When a dispute arises or threatens and
the services of the LMC are desired, the case is first referred to
the office of the Executive Secretary. The Secretary may attempt
to settle the matter personally, but if the dispute is too serious or
too complex to be settled at this level and mediation by the panel
is desired, preliminary interviews are held with the parties con-
cerned. The Secretary then draws up a statement of the issues in-
volved in the dispute, including the position taken by each party,
and submits it to a tri-partite panel selected by the Chairman to
mediate the case.

If the panel is unsuccessful in settling the dispute, it may refer
the dispute to the full committee. The LMC may, at its discretion,
choose to sit in on the case, but ordinarily will do so only in disputes
proving considerably detrimental to the public welfare or hopeless
of settlement elsewhere.

In addition to its mediation work, the LMC has done some arbi-
tration. As of April, 1947, four cases had been handled. This
activity is in distinct opposition to the policies of the former Toledo
Peace Board and to those principles generally accepted by authori-
ties on mediation. To cope with the problem of arbitration, it was
decided in February, 1947, to draw up a list of arbitrators for those
desiring this service. In addition to this, having found that the full
18-man committee could not effectively handle arbitration cases, the
Committee provided that arbitration proceedings be handled by


panels or bv single arbitrators. As a result, either the piibhc mem-
bers of the LMC serve as arbitrators or the Committee arranges for
other competent men to serve, as individuals or as panels of three.

First Year Record. By the end of its first year of full opera-
tion, July 1, 1947. the Committee had handled 78 local labor dis-
putes. Twenty-two of these were strikes, of which the Committee
settled 14 and gave minor assistance in eight. The Committee helped
avert work stoppages in 39 other disputes which had reached the
strike stage.

In the first half of 1947, man-days lost from local strikes ap-
proximated 13,500, as opposed to 56,060 man-days lost in the first
six months of 1946. The decline was approximately the same as
for the country as a whole.

During the period from October, 1946 to March, 1947. there
were no strikes. This halcyon period was brought to an end in the
latter month with the eruption of three strikes, only one of which,
as a local dispute, could be handled by the LMC. It was settled in
four and one-half days.

Boston's Industrial Relations Council

In 1941. a number of important business and labor leaders set
up the Industrial Relations Council of Metropolitan Boston.* Their
purpose, as stated in a pamphlet, "The Boston Story," issued by the
Council on October 1, 1946, was to promote "better understanding
and the solution of labor problems through continuous and closer
personal contact and accjuaintance among the representatives of
these two groups." The Council is basically bi-partisan in character.
Each of its major committees — Executive, Conciliation, and Advis-
ory — includes an equal number of union and company representa-
tives. The Executive Committee includes, in addition, one public

When disputes arise, participants may apply to the Council for
help in settlement. Three Chairmen of the Conciliation Committee

* Another agency was created on March 5. 1947. This was intended to handle
the grievances of employees of the city of Boston. This committee recently
had its membership increased from six to nine, and now includes three officers
from Boston's municipal staff, and three men each from the AFL and the CIO.
Grievances are handled in all cases by the three city officers and by either the
AFL or the CIO group, depending upon the luiion affiliation of the aggrieved


(one for industry and two for lal)or, from tlie AFL and the CIO
respectively ) select a panel from among the members of the Execu-
tive Board or affiliated members of the Council. It is this panel
which does the actual mediation. To minimize industrial disputes,
the Council has now incorporated a contract-reminder service simi-
lar to that of New York City. Union and management Council
members are encouraged to notify the l^^xecutive Director of their
contract expiration dates.

Other Services. In addition to the usual mediation facilities,
the l)Oston Council has suggested that its members make use of
several other services. Where the mediator supplied by the Council
has little success in settling the dispute, the Council will submit a
new list to the parties so that they may choose a new conciliator.
Furthermore, the Council is willing to draw up a list from which
members may choose a General Chairman to supervise the negotia-
tion of a new contract. This Chairman acts as a moderator, merely
drawing up the basic rules of procedure, preparing the agenda, and
guiding the discussion along logical channels. If negotiations bog
down and the parties wish the Chairman to act as conciliator, he
may do so. If the dispute is not settled In- conciliatory methods,
arbitration is suggested.

"The Boston Story" explains. "The conciliators and . . . the
arbitrators supplied by the Industrial Relations Council are business
and imion ofificials who. individually, possess broad executive expe-
rience and who are prett}' thoroughly ac(|uainted with labor prob-
lems within the metropolitan area; men who jealouslx' guard
reputations for fairness."

In addition to the settling of disputes, the Council attempts to
create and develop an atmosphere of understanding and co-opera-
tion between management and labor through informal meetings
and discussions.

Boston-Toledo Comparison. The Industrial Relations Coun-
cil of Boston differs from Toledo's LMC in two major respects.
First, it is in no way connected with the local government but was
originated and sponsored by independent local groups. Second, it is
primarily bi-partite in contrast with the tri-partite set-up of the
Toledo Committee. The plans are alike in that both offer arbitra-
tion as well as mediation services.


New York City Plan

The plan for municipal industrial peace found in Xew ^'ork
differs quite sharply from those previously described.

On October 1. 1946, Mayor William O'Dwyer of Xew \'ork
established the City Labor Relations Division, consisting of a di-
rector, a deputy-director, and a counsel, plus a mediator, a secre-
tar}- and three stenographers. According to the American Municipal
-Association report, previously- mentioned:

While the Toledo and Louisville committees have indicated willingness
to intervene in virtually all labor disputes that are strictl}- local in charac-
ter, the Xew York plan contemplates such intervention only in disputes that
vitally affect the public health, safety and welfare.

The Division, from a list of contract expiration dates, communi-
cates with management and labor representatives a full month
before contracts are to expire and urges that the parties begin
negotiations immediately. If there is no progress within two weeks,
the Division notifies the State Mediation Board or the regional
offices of the U. S. Conciliation Service.

Point of Intervention. The Division itself does not intervene
until it becomes obvious that there will be a breakdown of negotia-
tions and possibly or probabl)' a strike. \\ hen it does finally inter-
vene, the American Municipal Association reports, "... a highly
elastic approach is followed. In some cases one of the three leading
members of the Division of Labor Relations, co-operating with a
state mediator or a federal conciliator, assists in bringing about a
settlement. In other disputes, a tri-partite committee of outstanding
citizens, especially fitted to handle the specific case, is appointed by
the Mayor, with each such committee being dissolved after a settle-
ment has been reached." There is no permanent panel. Mediators
are chosen as the need arises. If there is no hope of reaching agree-
ment or of submitting the issues to arbitration, the Division may
then ask a committee to make a report to the Mayor, who may, if
he deems it advisable, make it public.

Division's Record. From the time of the l)i\ision's incep-
tion in October, 1946, to June 30, 1947, a total of 39 disputes had
been handled. Twenty-three of these disputes were settled without
resort to strike action while in 16 disputes, strikes were already in
progress at the time the Division intervened.


Because many of the disputes handled have involved municipal
employees, in March, 1947, the Division drew up a comprehensive
plan of procedures for the settling of grievances and requests for
changes in wages, hours and working conditions in the City

Experience in Other Cities

Plans similar to those in operation in Toledo and Boston have
been considered or adopted elsewhere in the United States. For
example, the committee in Louisville, Kentucky, organized in July,
1946, is modeled almost completely after the Toledo committee.
However, as was pointed out by the American Municipal Associa-
tion report, there is an important difference with respect to the
arbitration policies followed by the two committees. "The Louis-
ville Committee, . . . undertakes to arbitrate only in the case of
jurisdictional disputes and those involving governmental [munici-
pal] agencies."

Mediation plans have been proposed but not adopted in Chicago
and in St. Louis. More recently, Detroit (May, 1947) and Seattle
(June, 1947) gave the Toledo plan extended consideration. Kansas
City, Missouri; Los Angeles, California; Milwaukee, Wisconsin;
New Orleans, Louisiana; and Rockford, Illinois are also consider-
ing plans based on that of Toledo.

The Labor Relations Board in Newark, New Jersey, modeled
after the original Toledo Peace Board, was organized in April,
1937, but was disbanded soon after the establishment of the New
Jersey State Board of Mediation on April 23, 1941. In addition,
mediation facilities have existed at various times in Centralia,
Washington; Sheboygan, Wisconsin, and Adrian, Michigan.

Problems of Organization and Operation

Despite the differences in organization patterns, most of these
agencies face essentially the same problems.

With regard to form, it is not necessary that the agency follow
any one plan. Assuming that an agency similar to that in Toledo or
Boston is under consideration, some thought must be given to the
desirability of a tri-partite as opposed to a bi-partite agency.


Personnel of Board. The inclusion of public members may
serve to give greater prestige to the board and may serve to bring
greater weight to bear upon the other two parties to reach amicable
agreement. Further, it may be felt that management and labor alone
on any panel will do little more than argue the merits of a case in a
partisan manner, so that the public members will help to provide
the needed measure of impartiality. In opposition it may be argued
that sound labor-management relations can best be developed where
public members are not involved in the mediation proceedings. The
decision must rest upon the particular needs of the community.

Another major problem in the realm of personnel is that involv-
ing the caliber of the men chosen to sit on the panel. It is essential
that these men be leaders in the community and in their respective
fields if the agency is to command respect. Yet these men have many
other responsibilities which keep them from devoting the necessary
amount of time to this kind of work. The effect of this lack of time
becomes increasingly apparent as the case load of the agency
mounts. The result may well be that other groups of men, not as
influential or well known, are needed to cope with the amount of
work before the agency. The fact that the community leaders are
less active in the committee may decrease the effectiveness of the

Arbitration Policy. Confronting even the best-intentioned
and the most intelligent members is the question : Shall the agency
combine mediation with arbitration? The position taken by most
students of labor relations may best be summarized by the follow-
ing quotation from Kaltenborn's book, GoTcrnnicnt Adjitstuicnt of
Labor Disputes:

Mediators should not serve either as arbitrators or as members of an
'emergency board.' This is of paramount importance. A mediator must not
be forced to take a positive stand on the basic issues of industrial disputes
and thereby run the risk of injuring his effectiveness as a mediator by
alienating one of the parties. Where mediation and arbitration are com-
bined within the same agency, the functions should be performed by differ-
ent personnel. Even more desirable is an arrangement similar to that exist-
ing in New York [state] where arbitration cases are not handled by the
mediation board or its staff but the parties are encouraged to select arbi-
trators from a large list of possible arbitrators chosen by the board.

The New York State Board of Mediation, at one time combined
mediation with arbitration facilities. However, it soon found that

^j; OF lu: tiK


its effectiveness as a mediation agency was being hampered by its
activities in the sphere of arbitration. Consequently it changed its
polic\" to the one mentioned above. An awareness of the difficulties
arising from this ccjmbination has been evidenced by the Toledo
Committee in its recently changed attitude toward arbitration. The
policy suggested by Mr. McCirady for the original Toledo Board
seems to insure the most effective operation of such a board.

Geographical Considerations. Even where all the problems
arising from organization and functioning are successfully settled,
the effectiveness of any mimicipal mediation plan is severely limited
by geographical considerations. At best such an agency can deal
only with those disputes which are local in origin and in extent. Just
as state mediation agencies must limit themselves to disputes origi-
nating within the state, so mimicipal agencies are similarly limited.
This was demonstrated in March, 1947. when the Toledo Commit-
tee could intervene in only one of three current strikes. This is not
to argue against municipal plans but rather to point up their
limited scope.

Other problems arising to distress any such committee are not
inherent in mediation plans as such. The agency, for example, ma}"
use its prestige to push extraneous plans calculated to benefit indi-
viduals or the public. Differences of opinion on these outside mat-
ters mav be so severe as to hamper seriously the real work of the
agencv. Individuals may be tempted to use membership on the com-
mittee as a stepping stone to other positions. These problems are
the sort that are faced by any agency in the pul)lic eye and can be
dealt with onlv bv the determined and sincere efforts of the com-
mittee members to realize the aims of the agency in the manner
stipulated by its charter.

Problems of Jurisdiction

llie idea of the "Toledo Plan" seems to have a great popular
appeal for other cities. Articles have appeared in leading magazines
and newspapers urging the wholesale adoption of this plan on a
nation-wide scale. It may be well to examine the validity of urging
such wholesale adoption.


Kaltenborn states that the desirabiUty of municipal adjustment
agencies "appears to depend upon (1) fre(|uency of labor disi)iUes


Online LibraryUniversity of Illinois (Urbana-Champaign campus).Municipal mediation plans (Volume BEBR Faculty Working Paper v. 1, no. 5) → online text (page 1 of 2)