A key federal government agency for mediating industrial disputes in the US has been effectively closed by Elon Musk’s Department of Government Efficiency (Doge).

Doge took action after a decree by President Trump signed on 14 March directed the Federal Mediation and Conciliation Service (FCMS), among other federal agencies, to eliminate “non-statutory components” and to “reduce the performance of their statutory functions and associated personnel to the minimum presence and function required by law.”

It is unlikely that Trump has any legal authority to move against the agency because the agency’s funding and programmes are authorised and funded by Congress.

The FMCS provides mediation, training, and facilitation to resolve disagreements between unions and employers. It was established in 1947 to strengthen the federal role in solving difficult disputes and to prevent damage to the economy, infrastructure, services and public safety from the effects of such disputes.

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The FMCS had a 2024 budget that represented less than 0.0014% of the federal budget, according to the US Economic Policy Institute, which added that “eliminating the agency’s work and its staff entirely would not ‘save’ the federal government money.”

Unions and employers will no longer have a neutral, third party in the government available to help navigate disagreements in bargaining, the Institute stated.

It is thought that about 12 of the agency’s 200 employees have been retained.

The largest US union body, the American Federation of Labor and Congress of Industrial Organizations, which represents 63 unions, was strongly critical of the move by the Trump administration.

AFL-CIO president Liz Shuler promised legal action and said: “Dismantling the Federal Mediation and Conciliation Service – a small but important federal agency that helps bring labor and management together to solve problems between workers and employers – will be a destructive move for workers, businesses, and the economy as a whole.”

She said the result would be longer and drawn-out contract negotiations; delays in implementing new union contracts that raised wages and improved benefits; and disruption to the economy from strikes and lockouts.

“This action is an attack on people who work for a living and will suppress the expansion of good union jobs with fair contracts that benefit workers and employers alike. Once again, it’s clear the Doge agenda is about what’s best for the billionaires, not the working people of this country – and we’ll see the administration in court,” added Shuler.

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