PREVENTIVE MEDIATION
A Technique to Improve
Industrial Relations
E D I A T I O N can be most effective
M when utilized before deadlocks de-
velop in management-union relations. The
traditional approach to the use of impartial
third-party intervention has been to call in
a mediator or arbitrator after company and
union representatives have reached a point
where they are unable themselves to resolve
matters in dispute. The parties then hope and
expect that the mediator will break the
deadlock by persuading the other side to
see the light, or that the arbitrator will
settle the matter once and for all by hand-
ing down a ruling in favor of one side or
the other.
However, at this stage, it is often too
late for the mediator, or arbitrator, to ac-
complish constructive results. For the par-
ties have already announced their position
publicly and, as a matter of principle, retreat
is not only difficult but is looked upon in the
arena of collective bargaining as' a sure sign
of weakness.
Having participated in industrial relations
for many years as mediator, arbitrator and
consultant, the writer has found that an
hour of "preventive mediation''applied early
in a situation is worth many days of remedial
measures taken after the battle lines have
been drawn. In all areas of the collective
bargaining relationship, mediation techniques
can effectively prevent conflicts and deadlocks
that are often considered an inevitable part
of industrial relations. Consequently, there
is a vital need for greater recognition by
management of the useful role which perma-
nent impartial mediation machinery can play
in promoting and maintaining stable labor
relations between company and union,
866
One demonstration of the practicality of
such a permanent impartial mediation setup
occurred in August, 1949, when the writer
was called in by Interstate Engineering
Corporation of Los Angeles, California, to
advise the company on improving its labor
relations with the Machinists Union (IAM
Lodge No, 720), Petty grievances that
could have been settled at some stage of the
grievance procedure were regularly being
taken to arbitration. And despite the fact
that there seemed to be considerable merit
to management's position, the company was
consistently losing the arbitration cases.
The executives were aware that something
was wrong, but were unable to locate the
basis for the trouble. Analysis of the situa-
tion revealed that one of the major sources
of the difficulty was a lack of effective com-
munication between management and union
representatives. They couldn't get through
to each other. Consequently, relations were
strained and hostile.
To provide the necessary channel of com-
munication, the writer suggested that it
might be worth while to experiment with
an entirely difTerent approach to the com-
pany-union relations. Instead of serving the
company as its spokesman, as the officers
of the company had originally proposed, the
writer asked to be retained as an impartial
adviser. It was pointed out that in the im-
partial role jan adviser could render a far
greater service to management than an ad-
vocate or partisan, since he could, because
of the nature of his position, maintain the
confidence and cooperation of the union.
Although understandably skeptical, the com-
pany officials decided to undertake the ex-
August, 1950 • Labor Law Journal

By PAUL PRASOW—AssistanI
Professor of Industrial Relations,
University of Southern California
Reprinted from the April, 1950
Issue of American Business
periment for a six-month trial period, with
the "impartial adviser" meeting with manage-
ment and union representatives a few times
each week, and being available for emer-
gency situations.
Before acceptance of the assignment, two
points were made clear to management and
imion representatives:
First, that the adviser would not compro-
mise his impartial status on any issue, de-
spite the fact that he was being retained by
management. If the merits seemed to be
in the company's favor on a specific issue,
management and union ofificials would be
so apprised by the impartial adviser; if
the company officials seemed to be wrong
on a particular matter, they would be so
informed frankly and with reasons. Ex-
actly the same approach would be taken
with the union representatives.
Second, that the adviser considered his
function to be that of bringing a fresh view-
point to situations which might arise, so
that the parties might be assisted in working
out their problems in a mutually satisfactory
manner. The company representatives were
always free to reject the recommendations
of the impartial adviser, but if management
preferred to go ahead with arbitration or
other means, the adviser would refrain from
taking an adversary position. The presen-
tation of the company's case would then be
handled by a management spokesman.
Success of Experiment
With these considerations understood, the
experiment got under way. Within a few
months, some very tangible results were
Prev;-tive Mediation
evident: (1) the number of grievances had
declined appreciably; (2) those grievances
that were filed were settled amicably and
satisfactorily at an early stage of discussion;
(3) not a single matter had to be arbitrated,
since the issues that arose never developed
to a point where it was necessary to resolve
them by arbitration; (4) relations between
management and union representatives be-
came noticeably less strained and more co-
operative.
These results were achieved through gradu-
ally improved communication between the
parties. Regular weekly meetings between
officers of the company and the union were
inaugurated and presided over by the impar-
tial adviser. At these meetings many topics
other than specific grievances were brought
up for discussion. Problems of production,
costs, competitive bidding and the com-
pany's future plans were freely and frankly-
aired when they affected such day-to-day
personnel matters as transfers, layoffs, re-
hires, promotions, discharges, seniority, etc.
Slowly and arduously, the pent-up feelings
of distrust, hostility and suspicion which
previously had permeated the relationship
were being dissipated by the frank discus-
sions and the more frequent contacts. An
easier relationship and greater confidence
gradually began to prevail between the parties.
The unusual element in the entire situa-
tion was that the "impartial a'dviser" re-
tained by the company was accepted by the
union quite naturally and without question
as an impartial mediator. Separately and
jointly both parties were coming to rely
upon his advice and were accepting his
assistance whenever a difficult problem arose
which could benefit from objective analysis.
The mediator, however, never sought to
intrude his advice unless it was requested,
since his function was not to substitute for
the collective bargaining which parties nor-
mally should perform for themselves. Dis-
cussion of grievances became a valuable
educational process rather than merely a
battle to prove the other side wrong. The
parties were learning the advantages of test-
ing the validity of their positions by means
of private discussion with the mediator. Such
discussions developed the relative strengths
or weaknesses of a particular point of view.
Essentially, the parties were seeking the
perspective of a trained and experienced im-
partial observer. The most frequent ques-
tion raised was "How would an arbitrator
look at this issue?" By means of this in-
formal approach the parties were themselves
able at some stage of their negotiations to
867
,'^ctlle niaiij' issues tliat ordinarily would
have been fought out bitterlj- iu au arbitra-
tion hearing. And, equally important, the
parties were developing an increased under-
standing of the underlying problems which
were giving rise to the grievances. The
mutual discussions with the mediator and
tlie regular meetings between union and
management provided the means by which
the source of complaints could be recog-
nized, tackled and eorreeted, without wasting
valuable time and energy on winning an
argument or proving the other fellow wrong.
Bigger Issues
How really effective this new approach
could be when the issues were basic and
the stakes high was dramatically demon-
strated in December, 1949, approximately
four months after the experiment began.
The company was facing a crucial decision.
The firm had an excellent opportunity to
bid upon vitally-needed production contracts
which, if secured, would keep things hum-
ming for well over a year. But stability of
labor relations and labor costs was essential
iu order for the firm safely to undertake
such long-term commitments. Yet manage-
ment was faced with uncertainty on these very
matters. Prolonged collective bargaining
negotiations with the union were antici-
pated in the spring of 1950, since the exist-
ing collective bargaining agreement permitted
the union to reopen the contract at that
time on all provisions affecting costs. More
seriously, if agreement could not be reached
by May IS, 1950, the union was free to call
a strike. The officials of the company were
well aware of what that would mean to
production, since two years earlier there
had been a bitter and prolonged strike which
had completely crippled production and pre-
vented the company from meeting its cus-
tomer commitments. In the face of potential
labor instability and increased costs, the
officers of the company not only hesitated
to make any long-term contracts with the
company's customers but were seriously
considering selling the plant.
This dilemma was presented to the im-
partial mediator by the executives of the
company. Pursuing the same techniques
which had been so successful in the ad-
justment of day-to-day problems, the media-
tor approached the union frankly, setting
forth all the facts. He pointed out that it
was to the union's best interests, as much
as to the company's, to do everything pos-
sible to remove the uncertainty which im-
peded the actions and decisions of top
863
management. The mediator also pointed
out that if the company were assured of
continiied labor stability its officers could
promptly make far-reaching production com-
mitments which would provide greater em-
ployment security for present workers aud
possibly more jobs in the future. On the
other hand, failure to remove this uncer-
tainty well might result in unemployment
for all, since the company might be forced
to sell the plant.
Instead of waiting three or four months
until the time that negotiations were sched-
uled to take place, the union representatives
agreed to give the matter immediate con-
sideration. The seriousness of the company's
position was recognized and, statesmanlike,
the union representatives promptly decided
to give the company whatever assurance was
necessary to permit management freedom of
action to expand production and employ-
ment. At the mediator's request a confer-
ence between officers of the company and
the union was called for that very afternoon.
Labor history was made at this meeting
insofar as this firm and union were con-
cerned. For the union officials assured man-
agement of these things: first, that there
would be no strike during 1950; second, that
there would be no demands during 1950 for
wage increases, pension programs or other
benefits affecting costs; and third, that the
officers of the company could count upon
complete labor stability for at least a year
and a half, or until May, 1951. No conces-
sions were requested by the union in return
for these guarantees. Operating on the basis
of good faith, engendered by the previous
months' harmonious relations, the union
representatives took these constructive steps
as a means of expressing their confidence in
the firm's new approach to industrial relations.
Conclusion
The above illustration contains no formula
or system that will necessarily be universally
successful, but it does serve to reveal the
basic nature of an educatiotial process and
an effective mechanism which can be fol-
lowed profitably by any firm, large or small.
The parties in the collective bargaining re-
lationship often need someone whom they
can both trust and to whom they can look
for objective evaluation and practical alter-
native suggestions. Because he has the con-
fidence of the parties, the perspective of
trained objectivity, and familiarity with the
specific industrial relations problems of the
(Continued on page 911)
August, 1950 • Labor Law Journal
 T F T H E O T H E R United States Courts
A of Appeals follow the Fifth Circuit's lead,
a number of NLRB decisions under Section
8 (b) (4) may be reversed. For example,
the Board has used precisely the same kind
of technical restrictionism in holding that
secondary pressures do not violate Section
8 (b) (4) where a state agency is the vic-
tim." More important, it has held that
unions may escape liability where secondary
pressures are applied directly to employers,
rather than indirectly to them through their
employees.*' Finally, it has held that the ap-
plication of secondary pressures, even
through inducing employees to refuse to
work, may be privileged if based on a "hot-
cargo" collective-bargaining agreement.'"
Now, if the logic of the Fifth Circuit's ap-
proach is pursued, and if the Taft-Hartley
policies are to be considered as much en-
titled to .effectuation as the Wagner-Act
policies were, then it would seem that these
decisions of the Board, too, are erroneous.
=* Al J. Schneider, Inc., 2 CCH Labor Law
Reports (4th Ed.) U 9407; Al J. Schneider Com-
pany, Inc., 2 CCH Labor Law Reports (4th
Ed.) !I 9811.
'= Rahouin, d.h.a. Conwav's Exprens. et al.,
2 CCH Labor Law Reports (4th Ed.) 119475;
compare Humphrey v. Local 294, International
Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America, AFL, et al.,
17 LABOR CASES 1165,539; Sealright Pacific,
PREVENTIVE MEDIATION: A TECHNIQUE TO IMPROVE
INDUSTRIAL RELATIONS — Continued from page 868
firm with which he is associated, the perma-
nent impartial mediator can serve with great
effectiveness as a catalytic agent to bring
the parties together for mutual understand-
ing ih their daily relationship.
Mutual confidence in the person selected
as mediator and a willingness of the parties
to recognize that both sides are dependent
upon one another for mutual existence and
survival must, of course, precede the adop-
tion of such a plan; although it can be
expected that both confidence and recogni-
tion of interdependence will be developed
more completely as the plan progresses
satisfactorily.
Ideally, the permanent impartial mediator
should be compensated jointly by both parties,
as is the case with most permanent im-
The Developing Law
even though there may be technical grounds
in support of them. For the Fifth Circuit's
approach is no more single-mindedly di-
rected to the effectuation of the Taft-
Hartley policies than was that of the NLRB
in regard to the Wagner-Act policies. It is
an old story now that the Supreme Court,
in the Phelps Dodge'^ Hearst"' and Republic
Aviation ^^ cases, approved the Board's over-
riding of technicalities under the Wagner
Act. Whether or not it will similarly ap-
prove wholehearted effectuation of the Taft-
Hartley policies remains to be seen. One of
the fine ironies of the whole situation is
that the framers of the Taft-Hartley Act
may have unwittingly endangered their own
long-run goals by the emphasis on tech-
nicalities which is to be found in some parts
of the act. For this emphasis may provide
the Supreme Court with one basis for re-
fusing to join the courts of appeals in hold-
ing the NLRB to the standards of policy-
effectuation followed under the Wagner Act.
Ltd., footnote 14; and Samuel Langer, 82 NLRB,
No. 132.
^ Babouin, d.h.a. Conway's Express, et al.,
footnote 35.
=' Cited in footnote 32.
^ NLRB V. Hearst Publications, Inc., 8 LABOR
CASES H 51.179, 322 U. S. 111.
'»Republic Aviation Corporation, 9 LABOR
CASES H 51.199, 324 U. S. 793.
partial arbitrators. However, this is not
absolutely essential, as has been demon-
strated in the example given above.
The writer looks forward to the time
when permanent impartial mediation is as
accepted a technique in the prevention of
labor-management disputes as permanent
impartial arbitration is in the adjudication of
such disputes. Whether for the large firm
which can afford a full-time permanent im-
partial mediator, or for the smaller firm
which may only be able to retain a perma-
nent impartial mediator on a part-time basis,
as was the case in the illustration above,
"preventive mediation" offers incalculable
possibilities for reducing labor disputes and
promoting greater harmony in labor-manage-
ment relations. [The End]
911