The Federal Service Labor-Management Relations Statute outlines the broad topics that must be negotiated with a labor union, those that are reserved to management, and those that may be negotiated at management's discretion.

The obligation to negotiate requires discussion and consideration of the union's proposals. The negotiating process is designed to promote the balancing of the rights and interests of employees and the union with those of management, and to foster a two-way flow of communication.

Negotiating with labor union(s) occurs at different times. The most publicized occasion is the formal negotiations referred to as collective bargaining. This process results in a written document distributed to all members of the bargaining unit and to all supervisors and management officials. The document may be referred to as the union contract, collective bargaining agreement, or labor-management negotiated agreement. Contracts are normally subject to renegotiations every three to four years.

Other times when negotiations may arise are: agency reorganizations, the introduction of new technology, changes in regulations of outside authorities, and a host of other factors that may create a need for new working conditions that were not anticipated when the basic contract was negotiated. In these cases when an agency decides to act, two types of negotiations may result: