It’s A Matter Of Principle

How many times have you heard “it’s the principle of it.”  Be assured that when you hear this during a negotiation, nothing good is going to follow.  This is a red flag that things have just turned south and that there will be no rules of rationality moving forward.  In negotiations, the “matter of principle”, is code for “I want to win”.  It is a proclamation that becomes an excuse to be difficult and inflexible.  It is an emotional response, rather than an intellectual one and is an opt-out clause when it comes to responsible, professional negotiation. 

 A Smart Negotiator must realize that once the “matter of principle” is invoked, the chances of making a quality deal are not very good.  Corrective action may be necessary to salvage the negotiation.  One method in accomplishing this would be to call a caucus and reframe the facts, in order to recalibrate the vision of the parties involved.  Following are a couple of examples that illustrate the devastating affect that the “matter of principle” can have on the outcome of a negotiation.

 The Smart Negotiator!® workshop often uses a labor-management case as an exercise.  Teams typically negotiate in good faith to the point where they almost have a deal.  It is not unusual for the labor team to make a request for something to close the deal and reach a final agreement.  In this instance, labor asked for one additional holiday to close the deal.  At this point, many times the management team’s vision shifts and they flatly refuse to give an additional holiday, estimated to cost the company between $7000-$9000, on the grounds that “it is the principle” of it.  Consequently, the labor team becomes emotional and decides to go on strike, costing the company $30,000 per day.  The management team concludes that they will not spend $7000-$9000 to close a deal that would allow the company to continue to earn $12M/year profit, but allows the company to lose $30,000 per day in a strike.  What happened to the negotiator’s fiduciary responsibility to the company? Reframing the facts and removing the emotion from the situation would sound like this:  “You can pay a maximum of $9000 to close the deal and preserve the $12M/year profit or cost the company $30,000 per day of the strike and still not have a deal.  If the strike last 3 days the cost is 10 times ($90,000) the cost of one holiday.” Is this a matter of principle?

 Here’s an example from Small Claims Court:  A former employee (Plaintiff) filed a suit against its employer (Defendant) for $3000 in back wages.  The employee claimed he was owed $3000, but had no records to support the claim.  The employer acknowledged that he did owe the plaintiff some back wages and wanted to reach an agreement through mediation. Consequently, based on their records, the employer offered to pay the plaintiff $1500 in wages minus $400 for the equipment (power washer) that the employee didn’t return.  In essence, the deal was a check for $1100 at mediation and the employee keeps the power washer.  The plaintiff’s response to the employer’s offer was: “No.  It is the principle of it.  An employer shouldn’t treat its employees in this manner.”  Without any records, the judge may rule in favor of the defendant, awarding $0 to the plaintiff.  The plaintiff had $1100 in his hand and the equipment, but chose to go to court.  Is this a matter of principle?

 The next time you are engaged in a negotiation and one of the parties claims “it is a matter of principle”, your Smart Negotiator alarm should go off.  If you want to be successful, don’t move forward with the negotiation until you recalibrate the vision of the other party– and this is a matter of principle!


Attica: A Deal Not Made

A Smart Negotiator clearly identifies the needs and wants of all parties involved in the deal, while staying true to the distinction between the two entities throughout the entire negotiation process.  By establishing the needs of all parties, the negotiator creates the foundation on which the deal is constructed.  Forty years ago, the line between needs and wants became blurred during negotiations to resolve a crisis at New York’s Attica Correctional Facility, contributing to a stalemate between the prisoners and the state that would eventually leave 39 people dead.

On September 9th, 1971 approximately 1200 inmates overran “Times Square”, the central intersection at the heart of the state prison in Attica and took control of D-Block.  38 guards and civilian employees were taken hostage. Three guards were beaten in the initial fracas, one of which would die of his wounds 2 days later. 

The root causes of the uprising were overcrowding, racism and poor living conditions.  Attica was designed to handle a maximum of 1600 inmates.  At the time of the uprising, however, Attica was home to over 2200 prisoners.  Approximately 75% of the inmate population was African-American or Hispanic, while 100% of the guards were white males. The prisoners wanted a more culturally diverse guard population to reduce the overt racism within the prison.  Living conditions were better at the Buffalo Zoo.  For instance, prisoners were only allowed one shower per week, one roll of toilet paper per month, pork was part of every meal and Muslim inmates were not allowed to hold religious services.

On the first day of the takeover, inmates created a council to negotiate a settlement with prison officials. Because of a credibility gap between prison officials and inmates, the prisoners also called upon a select group to “oversee” the negotiations and “verify” events.  This group included members of Congress, the New York State legislature, the Black Panther Party, the media and lawyers.  William Kunstler, “Brother Bill” as he was known to the inmates, was asked to represent the prisoners regarding legal issues and began serving as a mediator to try to broker an agreement. The inmates created a list of 31 demands to be addressed to resolve this crisis.  The Corrections Commissioner, Russell G. Oswald agreed to 28 of the 31 demands, most of which were already supported by state and federal law, but had been ignored by unofficial prison policy.   The initial 28 demands dealt primarily with living conditions. The 29th demand for “transportation to a non-imperialistic country for everyone in D-yard” was quickly dismissed by both parties.   The last two demands were more difficult. 

Demand #30 called for Superintendent Mancusi to be removed from his position immediately.  The prisoners wanted Mancusi replaced immediately with someone who would treat them like people, not animals.  The prisoners personalized this issue, which clouded their vision and left no flexibility to resolving it.  With the other 28 demands that dealt with living conditions having already been met, the prisoners’ needs in this area had been addressed.  The Mancusi issue, a want, could have been treated administratively by promotion or retirement at a later date. However, the shelf-life on any promise or agreement to satisfy this want needed to be longer than the immediacy of the moment. Since it was clearly a want, it didn’t warrant the significance that it was given.  As a result, this want was treated like a need and became a manufactured obstacle to reaching a final agreement.

Demand #31 demanded complete amnesty for everyone in D-yard.  The inmates knew the law. Once one of the guards died from wounds suffered in the initial takeover, it was clear that everyone in D-yard could be charged with felony murder.  Moreover, anyone in D-yard already serving a life sentence could now be subjected to the death penalty.  Realizing that someone would have to be prosecuted, the inmates didn’t want everyone in D-yard to be charged with felony murder.  From a negotiator’s standpoint, the inmates needed some protection from blanket prosecution for the prisoners. Concurrently, the state had a need to prosecute those responsible for the guard’s death.  In this case, the inmates lacked the sophisticated vision of a negotiator. They took a very myopic view and didn’t explore any other options except the binary position of complete amnesty for everyone.  This inflexible position became problematic, as again, it was a want, not a need.  Ironically, William Kunstler “saw” what was transpiring inside D-yard regarding this issue.  However, his vision also became clouded, either by his idealism or the drama of the situation, creating a disconnection from the reality of potential consequences.  This momentary lapse of discipline caused him to take his eye off of the prize, leaving this demand frozen in time as an obstacle to the deal.

Another level of complexity contributing to this situation is recognizing ALL parties involved in the negotiation, even if they are not physically present.  In this case, the absentee Governor of New York State, Nelson Rockefeller, was a major player.  Although the Governor was party to the negotiations from a distance, he had needs that had to be fulfilled as well. From a negotiator’s perspective, extending the deadline would have been very beneficial to all and may have produced workarounds for demands 30 and 31.  However, the Governor controlled the deadline and there was no flexibility. Nelson Rockefeller had a need to protect his political image. He was in the process of putting together his campaign for the 1972 Presidential election and had been criticized by the right wing of the Republican Party for being on the “liberal” side.  Therefore, anything short of an immediate end to the situation would be devastating to his political image.  Consequently, re-taking the prison in a timely manner, even if it turned into a bloodbath, was a political need.  The Governor could not risk being seen as soft on crime.  A brutal re-taking of the prison may not necessarily be viewed as a negative and may even enhance his image in the eyes of the electorate. William Kunstler didn’t recognize the selfishness of the Governor’s needs and was surprised on Monday morning September 13th, 1971 when New York State Troopers took control of D-yard firing over 2000 rounds of ammunition and killing 39 people (29 inmates and 10 guards). As many as 83 other prisoners were injured seriously enough to require surgery.  After the shooting stopped, Governor Rockefeller publicly praised the State Police for a “superb job.” 

There are many lessons to be learned from Attica on a variety of levels.  From a negotiations perspective, negotiators must demonstrate a genuine commitment to a deal that satisfies the needs of all parties. In this case, the negotiation process broke down when wants were confused with needs and the needs of one party were privileged over all others. The tragic situation at Attica State Prison was certainly not caused by negotiators, but could have been resolved peacefully, if everyone involved had acted like one!


Ethics: When Agreement Isn’t Enough

As a certified mediator in the General District Court for the Commonwealth of Virginia, I am continually faced with ethical issues and questions regarding professional responsibility to the parties of a potential agreement.     

Recently, I was presented with a landlord-tenant case–the plaintiff a lawyer and the defendant clearly less savvy. Both are male and of the same ethnicity.  The rent is $1600 per month with a $200 late fee.  The defendant is $5400 behind on the rent.  During the screening process, the plaintiff informed me that he was going to make this easy on me and proceeded to produce a thumb drive containing his version of an agreement.  He said, “all you have to do is copy and paste the agreement onto your letterhead and we are done.”  This raised ethical red flag number one.  Why do these parties need mediation?  What can mediation do that they have not already done themselves? Would it be ethical to truncate the mediation process and just copy and paste?  I decided it was not and proceeded with the orientation and the signing of the agreement to mediate.

 As we navigated our way through the mediation process, the defendant agreed that he owed the $5400 and would accept the payment schedule proposed by the plaintiff.  However, he did not agree with the $200 late fee per month moving forward.  The plaintiff was treating the back rent as an account. The tenant would be charged the full late fee every month, even if the rent was paid on time, because the tenant’s “account” was not current.  Therefore, if the tenant paid the rent on time for the next 12 months he would have paid $2400 in late fees and not one penny toward the principal.  As mediators, we are taught to check to determine how the proposed agreement interfaces with reality.  In this case, if the defendant went to court and judgment was entered against him in the amount of $5400 with 6% interest, in 12 months he would owe $324.  The proposed agreement would cost the defendant 8 times more than a court action, raising ethical flag number two the classic “manifest injustice.” 

 In this particular case, the mediation process seemed to be doing something “to” the parties rather than “for” them.   Moreover, the amount of the late fee appeared excessive.  Although the Virginia Residential Landlord Tenant Act does not specify the amount of allowable late fees, the judges in each jurisdiction determine a percentage that is “reasonable.”  In this jurisdiction, the maximum allowable late fee is typically 10%.  Anything exceeding this amount is deemed “excessive” and punitive in nature.  In this case the plaintiff charged a $200 late fee on a $1600/month rent which is 12.5%.

 Consequently, based on the two ethical red flags and the unwillingness of the defendant to agree to the $200 late fee/month, I stopped the mediation.  Immediately the plaintiff (lawyer) threatened the defendant by stating that he was going to be “evicted from the property and it was my (mediator’s) fault.”  This statement confirmed my belief that the landlord was trying to coerce the tenant into signing the agreement, which raised ethical issue number three.  Any illusion that the parties had free will to choose had been removed.

 At this point, I notified the mediation administrator that I had ceased the mediation process due to several ethical concerns.  The administrator could send them back to court and let the judge hear the case or have another mediator work with them.  She chose the latter and after 45 minutes, the “copy and paste” agreement was signed.  I was told that “if both parties agree and understand, we have done our job”.  In this case, agreement is not enough.   A mediator should be more than a clerk for the plaintiff.

 Isn’t It Ironic as a mediation mentor in the Commonwealth of Virginia, we are required to complete a mentee evaluation that asks:  “during the co-mediation did the mentee assist in developing an agreement that is balanced, fair, realistic, understood and not coerced.”  This description defines the standard and the mediator’s professional responsibilities in the development of an agreement.  However, in this case, the term “understood” trumped all of the others.  None of the other terms were applied, simply because “they agreed”.  Why use criteria to determine if you are professionally fit to be a certified mediator only to ignore that criteria when it really counts? I can feel the jagged little pill of irony lodged in my throat. Paging Dr Alanis Morissette!


The “F” Word in Negotiation

What is the negotiation “F-word”? It is the word “fair”. Who can say that they haven’t heard “this is a fair deal,” or “this is fair and reasonable.”–or better yet, “I believe that this deal is fair for both of us”? When someone tells you that their offer is fair, you should instinctively reach to protect your wallet. Hopefully, your hand will get there before they do!

The continual use of the “F-word” relative to negotiations provides an interesting perspective, as it is frequently and improperly imposed as the ultimate criteria to gauge success. A successful deal must be functional, not necessarily fair. A functional deal is where both parties have their needs satisfied. Yes, I realize that both functional and fair begin with the letter “F”, but please do not confuse the two. If you put together a fair deal and offer it to the other party and they reject it, what happens then? Here’s what happens: you find yourself selling the deal through persuasion rather than continuing to negotiate.

The persuasive approach tends to lead to arguments that are not germane to the deal-making process and create obstacles to closure. At some point, you become fatigued from this persuasive exercise in futility and your reptilian brain encourages you to offer your bottom line, usually heading for a marginal deal (perhaps fair, but marginal).

Moreover, I am not so sure there is such a thing as a fair deal. I have seen good deals and bad deals, but can’t really say that I have seen a fair deal. Any negotiator can make the case that their position or offer is fair, no matter how far off of the grid it really is. Those who are most vulnerable to a “fair” deal are introverts. Let’s face it, negotiation is a communication nightmare for most people. It ranks right up there with public speaking and snakes in terms of what causes the most psychological discomfort. Even in the most successful deals, there are more statements of rejection than those of acceptance. Consequently, agreeing to “fair” makes perfect sense to introverts and/or linear thinkers, because it causes them the least amount of psychological pain. When psychological discomfort becomes the determining factor in whether to accept or reject an offer, your ability to achieve a quality outcome is diluted. Unfortunately, this gives the other party a ripe opportunity to game you.

This is not to say that introverts or people without an “E” in their Myers-Briggs rating cannot be successful negotiators. On the contrary, some of best negotiators that I have met are classic introverts. They may be very good at it, but they will never like it. Nowhere does it say that you must enjoy the process of negotiation in order to do it well and create quality deals. Consequently, The Smart Negotiator uses “Q” for quality as the word of the day (and the ultimate criteria to gauge success), rather than the “F-word”.


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