In 1939, the state legislature enacted the Minnesota Labor Relations Act (Minnesota Statutes 179) as a means of peacefully settling disputes resulting from the growing size and strength of Minnesota's labor movement. The Act recognized that a sound economy is aided by a constructive labor-management environment. To administer the Act, the legislature created the Division of Conciliation, the forerunner of the present Bureau of Mediation Services. The Division was to perform four functions: conciliation/mediation, arbitration, bargaining unit determinations, and bargaining unit certification elections.
Over the years growth in the state's economy and union representation, increased complexity of contract negotiations, and growing acceptance of mediation caused the legislature to pass additional laws affecting labor-management relations. In 1969 the Division was renamed the Bureau of Mediation Services and established as a separate state agency. Enactment of the Public Employment Labor Relations Act of 1971 (PELRA) and its subsequent amendments have substantially expanded the functions of the BMS.