Southwest and the union representing its fleet service workers filed for federal mediation Oct. 31, providing a note of labor discord at an airline known for its good management-employee relations.

The union and airline made the move, at the union’s impetus, after negotiations on Oct. 28 and 29 produce no progress on reaching an agreement on wages, the Transport Workers Union Local 555 said. The airline and union have been negotiating since January, about six months in advance of the existing contract’s June 30, 2008, amendable date.

The union said it wants a pay raise of at least 4% annually over three years, but Southwest has stuck with its proposal to increase wages 3% in the first year of the contract and 1% to 3% in subsequent years.

The union asserted its wage request was “fair and reasonable,” but that Southwest’s offer would not keep pace with cost-of-living increases. Southwest reportedly has offered stock options, but the union has described that as a “gamble” its members should not be forced to take when they already are struggling to make ends meet.

In a letter to management earlier in October, the union noted its members previously approved a two-year contract extension with stock options in lieu of raises. It described that agreement as “a gamble that seemed like the right thing to do for our airline and our members,” but added that “it has not proven profitable.”

Southwest said it does not believe the differences are that great, and an airline spokeswoman described the mediation as just another “step in the process.”

‘We’re confident this step will get us closer to a resolution on the remaining issues,” she said, noting the airline and union are “just a few percentage points apart” on raises.