Notes on Negotiation
Written by Marty Latz, Latz Negotiation Institute
I remember taking a labor history course in college years ago that opened my eyes to the hostile and contentious record of union-management negotiations going back to the advent and growth of unions in the late 19th and early 20th century.
Violence was not that uncommon in these negotiations.
Not surprisingly, leverage in the form of strikes, walkouts, lockouts, slowdowns, strikebreakers, and threats dominated many collective bargaining environments.
Of course, leverage continues to be a main force driving collective bargaining, as we recently saw with the United Auto Workers (UAW) striking against several U.S. automakers in a fairly successful effort to achieve significant wage increases.
But we’ve also seen the effective use of “pattern bargaining” by unions in conjunction with their leverage-related efforts ever since World War II.
What is pattern bargaining and how can we use its principles in our own negotiations?
Pattern bargaining is a negotiation strategy in which a “union gains a new and superior entitlement from one employer and then uses that agreement as a precedent to demand the same entitlement or a superior one from other employers,” according to Wikipedia.
Unions typically do this as an efficient way to lock in industry-wide standards. In the just-completed UAW case, it first reached an agreement with Ford, then used the Ford agreement to get subsequent and very similar agreements with Stellantis and GM.
Regular readers of this column will recognize this strategy of using precedent as an application of my Third Golden Rule of Negotiation: Employ “Fair” Objective Criteria.
Precedent is a tried-and-true standard, or benchmark, that parties use to effectively say to their counterparts “since you or like entities have agreed to X in the past under similar circumstances, it’s only fair that you agree to X now too."
The power of this derives from how we as humans have an inherent psychological tendency to want to behave consistently (social psychologist and bestselling author Robert Cialdini calls this the “Principle of Consistency.”)
Corporations, and especially their sales and procurement departments, incorporate this all the time when they negotiate the terms of Master Service Agreements (MSAs) with suppliers and customers. These MSAs then become the baseline for their future contracts with those same entities.
Bottom line: Find out what your counterparts have agreed to in the past with you or others, then use it as precedent to incorporate it into your new agreement.
Latz's Lesson: The UAW and unions have used precedent for years to lock in consistent industry-wide wage gains by using pattern bargaining. You can, too, by finding and using precedent in your negotiations.
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Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research. He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com
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