Northern Exposure

Lessons learned from NHL lockout

By Brian P. Smeenk

Canadians love hockey like Americans love football or baseball. Maybe more. So the lockout of the players by the league’s owners has left a lot of Canadian hockey fans in withdrawal. It’s also led to much more reporting about labor negotiations than we would normally see in the media.

While the NHL and its Players Association have finally reached a deal, it’s still worth considering what lessons we can learn from this negotiation that might be applied to less glamorous ones.

Lesson 1: If the employer is demanding monetary rollbacks, expect a long work stoppage. Any experienced labor negotiator knows that one of the toughest things to achieve is a major rollback of salaries or benefits. Nobody wants to earn less than before. And unions hate to deliver less to their members. So if management needs to achieve rollbacks, they need to expect that a long work stoppage is highly likely.

Here, the NHL owners were reportedly seeking huge rollbacks, including a reduction of the players’ share of revenue from 56 percent to 50 percent, new salary caps, pension liability reductions, and more. Both parties likely knew it was going to take a long time to resolve those issues.

Lesson 2: Sometimes work stoppages are necessary. Strikes or lockouts may be necessary when the parties are simply so far apart in their bottom-line positions that economic pressure needs to build in order to drive them toward the right outcome for the circumstances. Sometimes it’s necessary to test the other party’s resolve. That’s why labor negotiations have often been called “economic warfare.” It’s really a war of economic attrition.

As economic pressures build on both parties, it causes them to reassess their true bottom lines. There’s nothing that focuses a party’s attention like the prospect of imminent economic annihilation or even serious damage. It seems that both parties in the NHL dispute needed to experience this – and inflict it on the opposite party for a while – in order to get to a deal.

Lesson 3: It’s hard to make a deal when you’re not talking. One thing that was remarkable about this negotiation was the lengthy periods of time that elapsed between across-the-table bargaining sessions. And a number of the bargaining sessions reportedly consisted of nothing more than the laying down of strident positions by one or both parties. While that could be explained by Lessons 1 and 2 to some extent, experienced labor negotiators and mediators know that usually, the longer you can keep the parties talking, the more likely you are to find solutions. And the more likely you are to understand and avoid the predictable costs of learning Lessons 1 and 2 the hard way.

To paraphrase Mark Twain, real experience is indeed the best teacher, but it’s also the hardest and costliest. One has to think that a settlement might have been reached more quickly if negotiators could have been less positional, and more problem-solving in their approaches.

Lesson 4: Mediators can help – if the parties have confidence in them. Another remarkable thing about this long dispute, at least from what we read in the media, is how little use the parties made of mediation. They seem to have given mediation a try in the middle of the dispute, then basically discarded it, and then used it again to close the deal.

Mediation is used to a much greater extent in Canadian labor negotiation.  Indeed, in many Canadian jurisdictions, mediation or conciliation is a mandatory step before one can legally engage in a lockout or a strike. Canadian labor negotiators have developed real confidence in the ability of experienced labor mediators to help them “get to yes.”

Perhaps the parties didn’t have confidence that mediators could help them bridge the gaps in their positions. If mediators don’t have the parties’ confidence, they can’t be effective. It is noteworthy that mediators were apparently very involved in the final days of the negotiation, when the economic pressures had mounted. One wonders if earlier and greater use of good mediators couldn’t have helped the NHL and the players get to a deal sooner.

Lesson 5: Eventually there will be a deal – but at what cost? While Lessons 1 and 2 tell us that sometimes costly work stoppages are inevitable, nonetheless the name of the game is to achieve the best available deal with the least damage possible to your side. Posturing and positional bargaining isn’t normally the best way to achieve that. Rather, parties can achieve their goals more effectively when they:

• Thoroughly understand the interests and real needs of both parties – why it is that they want what they want;
• Investigate alternative approaches to achieve both parties’ interests;
• Understand the costs of not achieving a deal for both parties;
• Be willing to stay at the bargaining table as long as it takes;
• Use good mediators to help explore positions, without having to alter yours; and
• Employ the best labor negotiators available who can use their experience from many other situations for your benefit.