One of my favorite books about negotiation is Getting To Yes by Roger Fisher and William Ury. As the book jacket suggests, it really is “for everyone who has ever worried about what to do in a disagreement or dispute.”
Since I suspect that the majority–if not the vast majority–of negotiations are between parties of unequal bargaining power, I thought it might be interesting to dip into the book and see what Fisher and Ury recommend one do when he/she/it is negotiating against a more powerful opponent. One of the tools the authors advocate in this situation is for a negotiating party to formulate a Best Alternative To A Negotiated Agreement (BATNA). Just by knowing their BATNA a party becomes empowered in any negotiation.
The easiest way to get a feel for what the authors are talking about is by using their example:
“Consider a wealthy tourist who wants to buy a small brass pot for a modest price from a vendor at the Bombay railroad station. The vendor may be poor, but he is likely to know the market. If he does not sell the pot to this tourist, he can sell it to another. From his experience he can estimate when and for how much he could sell it to someone else. The tourist may be wealthy and ‘powerful,’ but in this negotiation he will be weak indeed unless he knows approximately how much it would cost and how difficult it would be to find a comparable pot elsewhere. He is almost certain either to miss his chance to buy such a pot or to pay too high a price. The tourist’s wealth in no way strengthens his negotiating power. If apparent, it weakens his ability to buy the pot at a low price. In order to convert that wealth into negotiating power, the tourist would have to apply it to learn about the price at which he could buy an equally or more attractive brass pot somewhere else.” (Id. at 107.)
Since I’ve visited the Bombay railroad station–it’s actually called the Victoria Terminus–this was an easy bargaining situation to picture. The authors just left out the part about the cows wandering along the platform. In any event, as they point out, “the relative negotiating power of two parties depends primarily upon how attractive to each is the option of not reaching agreement.” (Id. at 106.) If you can have a very attractive BATNA, your chips have greater value.
How do you strengthen your BATNA? The authors suggest this “requires three distinct operations: (1) inventing a list of actions you might conceivably take if no agreement is reached; (2) improving some of the more promising ideas and converting them into practical options; and (3) selecting, tentatively, the one option that seems best.” (Id. at 108.)
If we transition this discussion into a familiar setting, the pre-suit mediation of a hypothetical employment dispute, it may become easier to see how the whole BATNA thing might play an important role. Consider, for example, a single plaintiff who has a claim against her employer for gender discrimination. The parties engage in a mediation to see if the case can be resolved before she actually files a lawsuit. The individual employee might be anxious going into the mediation, since her employer is a large corporation with sophisticated lawyers at its disposal (at least they look sophisticated) and both she and her lawyer know it will cost a lot and be an uphill battle to pursue the case if the corporation is not inclined to settle. This sounds like an unequal bargaining position, doesn’t it? If they go in “cold” as it were, hinging their hopes on the corporation’s generosity, they’re likely to get steamrolled into agreeing to a settlement far below full value.
What can they do to enhance their BATNA and take away some of the corporate defendant’s power? Let’s apply the 3 step approach from Getting To Yes. First, the plaintiff and her lawyer “invent a list of actions” they might take if the dispute doesn’t resolve at mediation. Here are some I invented for them:
- Go ahead and file a lawsuit and serve aggressive discovery. (True, it’s not very original.)
- Explore pursuing a class action instead of a single plaintiff case.
- Aggressively investigate whether there are quality witnesses who will support plaintiff’s case.
- Propose a second mediation session after the plaintiff has completed some (hopefully damaging) discovery.
- Associate additional reputable counsel to help level the playing field.
- Explore forum shopping options. Perhaps the corporation expects a lawsuit would be subject to mandatory arbitration, but the facts or current state of the law weakens the assumption that arbitration will be a suitable forum?
Step 2: “improving some of the more promising ideas and converting them into practical options.” I like the idea of a class action as a practical alternative option to a single plaintiff case. This is bound to put pressure on the corporation, as a class action carries both greater risk and greater expense. How to “improve” this idea? Do some investigation. Talk to plaintiff’s female colleagues. Even if their cases would not be particularly strong if pursued individually, they might have a chance in a class action situation.
Step 3: selecting which option seems best. Let’s assume there is some chance the plaintiff and her lawyer could organize and successfully pursue a class action (but would still prefer to settle her single plaintiff case at mediation), the question becomes whether to share your option with the opponent during the bargaining process. The authors say this:
“The desirability of disclosing your BATNA to the other side depends upon your assessment of the other side’s thinking. If your BATNA is extremely attractive–if you have another customer waiting in the next room–it is in your interest to let the other side know. . . However if your best alternative to a negotiated agreement is worse for you than they think, disclosing it will weaken rather than strengthen your hand.” (Id. at 109.)
Here you will need to make an honest assessment. Is the notion of converting the plaintiff’s case into a class action really just pie-in-the-sky? The corporation’s lawyers are naturally going to wonder, if the plaintiff reveals her class action alternative, why her lawyer isn’t pursuing that in the first place if there’s really a viable class. The corporation, knowing class certification can be a challenge which, if lost, tends to shake out meritless individual claims, might not be particularly cowed by the prospective of a weak class action.
On balance, I would probably not reveal this BATNA to the opposition, even if the plaintiff and her lawyer believe a class action is a viable alternative. What’s important is the actual balance of power, not just the corporation’s perception of the balance of power. Going into the mediation with the knowledge that she has a decent BATNA should give the plaintiff and her lawyer the resolve not to cave too easily.