Why not try negotiating? (with update)

It’s clear that crunch time is coming on the Northern Front (aka the Minnesota orchestra labor “negotiations”). The board has said that they’re willing to indefinitely delay the unveiling of their shiny new $50 million toy lobby, to see the prospect of ever going back to Carnegie Hall evaporate, and to watch Vänskä walk. The musicians responded by getting a unanimous “no” vote from the orchestra on management’s old/new proposal. In character with their past behavior, management’s response missed the point completely:

Orchestra President Michael Henson, expressing disappointment with the rejection, called on musicians to make a counterproposal.

“It is important to note that the mediator’s confidential proposal is not a contract proposal — it was only suggested as a means of getting musicians to come to the bargaining table,” Henson said in a statement.

Of course, musicians are willing to come to the table; that’s what accepting Mitchell’s proposal meant. The really interesting question is why management didn’t accept the Mitchell proposal.

To recap: there have been two proposals floated in mediation to end the lockout and restart negotiations:

…Mitchell proposed a four-month interim agreement from Sept. 1 to Dec. 31. During the first two months, musicians would receive salaries based on their expired contract. If no formal pact was reached by Oct. 31, they would take a 6 percent pay cut for the remaining two months. If no deal was reached by year’s end, the parties would “return to their respective positions.”
…
Last month, musicians rejected a management proposal — offered through Mitchell’s office — that similarly would have provided a window for mediation. Musicians would receive their old salaries for two months. If no agreement were reached, a contract would have been imposed to cut pay by 25 percent.
…
The musicians’ official position is that they will not negotiate so long as the lockout is in place. Management has said it will not lift the lockout because it then sacrifices leverage. Hence, Mitchell is trying to find a compromise that would allow the two sides to save face and work with him.

It appears that the management proposal came first. Then came the Mitchell proposal, which was accepted by the musicians and rejected by management. Then the management proposal was reiterated – this time in public – last week.

As I mentioned in a previous post, it’s not surprising that musicians rejected that proposal; essentially it was a two-year contract with a 25% pay cut dressed up as a negotiation. Guessing why management rejected Mitchell’s proposal is harder.

There are several possible explanations, but I suspect the bottom line is the bit about how, if no agreement is reached after four months, “the parties would ‘return to their respective positions.’” I still find this puzzling, though – how is management worse off in that situation? Arguably, they might end up better off; it seems to me that they could plausibly claim that a bargaining impasse was reached at that point and impose their last, best and final offer. That would force the musicians to strike – not only ending their unemployment compensation, but putting them in a much worse position publicly than being locked out. Back in the day when I was earning my negotiation chops, it was axiomatic that it was far better to be locked out than to be on strike, even if there was no unemployment involved. The optics of a lockout are so much worse for management.

It may also be that management is concerned that their final offer, after two months of mediation with someone like George Mitchell, might be less draconian – and cost them more money – than what’s on the table now. That could explain why they insist on a guarantee in advance that the musicians will accept a 25% pay cut. Of course, having the orchestra start up for four months and then shut down is far from ideal, but they would get to keep the Carnegie dates and, of course, Vänskä. And four months of working with Mitchell might actually produce a settlement that both sides could live with. Any mediator who can end decades of armed conflict in Ulster should not be underestimated.

At the end of the day, it seems as if the fundamental dynamic in this negotiation remains unchanged – the board and management are not willing to negotiate about the size of the cuts. As they said last November:

The musicians’ negotiating team appears to be avoiding at all costs our request to come back to the table with a substantive counterproposal. While we have been clear that we seek savings of $5 million annually, the approach we use to reduce these costs can be adjusted through the course of good-faith negotiations. But we need our musicians to participate for this to happen.

It’s not really a negotiation if one party refuses to discuss the most important issue on the table. It’s like making an offer on a used car and having the dealer respond by saying “we’ll accept either a check or cash for the sticker price.” It misses the whole point of negotiations.

This unwillingness to negotiate at the table has not changed, although, oddly enough, the size of the cut has; presumably the 25% cut offered recently will produce fewer savings than the one proposed last year. I guess one could call that a form of negotiating, although the musicians would be entirely justified in wondering if talking to management from November through July would have produced that kind of movement.

I wonder if “missing the whole point of negotiations” is itself the point. Henson has clearly bought into the ideological concept of “the new business model” being primarily that orchestras are paying way more than they have to for their orchestras. And the idea that an institution would have to engage in real negotiations with a union can be profoundly distasteful to those who don’t have to deal with such annoyances in their day jobs, such as MO board chair Jon Campbell and Richard Davis, chair of the board negotiating committee. The “new business model” combined with the increasingly anti-labor mindset amongst folks like Campbell and Davis form a lethal combination for an orchestra whose long-term success, if not actual existence, is entirely dependent on reaching a negotiated settlement with a union.

Update:

I managed to miss news of a new proposal made by the musicians on Tuesday:

“We confirmed the minimum level of restoration for musician compensation after they have been without salary or health care” since the lockout began nearly a year ago, musicians’ spokesman Blois Olson said in an interview.

Citing a confidentiality pact agreed to by both sides, Olson would reveal no other details, but he said the union considered the offer to be a “financially specific” proposal. That is significant because the musicians had never offered a counteroffer in their standoff with management.

“Our legal advisors say that the Union has offered nothing that would constitute an official counterproposal,” Michael Henson, president of the orchestra, said in a statement. “They have suggested vague terms around one element of the contract (seeking salary increases) but have not responded in any way with regard to proposed work rule alterations, insurance premiums, individual contracts, additional pay practices or benefits.”

Henson said a request for a pay increase at this stage is “extraordinary.” The board’s latest proposal would cut annual minimum salaries by 25 percent. Musicians voted that down last week.

I can’t decide which is worse: Henson believing what he says or him knowing it’s nonsense. It is nonsense, of course; the only requirement for an “official counterproposal” (a term you’ll find in no labor law text) is that it be on the record from the opposite side. The idea that it has to propose changes in all the areas management wants to change is beyond ludicrous. What if the union side is content with the existing language? Does the union then have to make a counterproposal to not change anything? If the musicians proposed an annual binding vote by the musicians on whether the CEO got to keep his job, would management make a counterproposal? “Go pound sand” is legally the default and assumed response to a proposal from the other side in the absence of assent, although usually phrased more politely.

It’s worth noting that the “confidentiality pact” is fraying very badly. I’m not sure what motivated the musicians to say they’d made a counterproposal at all, except perhaps the constant management drumbeat that they haven’t made one to date. And Henson describing what was in the counterproposal was not only a violation of what remain of the pact, but really constituted negotiating in public – hardly productive in the context of a mediated negotiation. No wonder the Mayor was unhappy:

“Both sides have to stop looking for others to bail them out,” Rybak said. “There have been many people who have stepped in over time, but all have reached the conclusion that this will only be solved by the two sides at a bargaining table. Lock yourself in a room and shut up about it until you come back with a solution. The community is disgusted and desperate.”

The mayor, who helped to organize a concert celebrating the orchestra’s Grammy nomination last February, said, “We have to have dramatic change from both sides. We are in a serious crisis.” He said the public nature of the dispute has been corrosive.

“I’m a former reporter, but the constant communication through the media has built such hostility that this cannot be solved by someone from the outside,” he said.

I hope the Mayor knows better and is blaming both sides in order simply to retain some credibility with the MO board. One of the most regrettable results from a conflict this prolonged and bitter is that eventually people on the outside just want it to stop, and blame both sides for continuing it. I doubt the Mayor would apply the same logic to his next-door neighbors if one spouse was continually battering the other.