Negotiations and Trust

Mediators typically hope that the negotiations they facilitate will be “win-win.”  This means that each party, while not perhaps getting everything they want, will get something of value or importance – something that they would not necessarily have gained through a different kind of dispute resolution process.  Mediators are encouraged to think broadly and help parties create value.  To use a robust cliché, we try to help the parties think about how to make the pie bigger before we help them portion it out.

So I was saddened to read (in the February 2, 2012 issue of The New Yorker) of negotiations that could be described only as “lose-lose,” with the parties ending up worse off than they were before.  Ian Frazier’s article, “Out of the Bronx:  Private equity and the cookie factory” tells the story of what happened when Brynwood Partners bought the Stella D’oro cookie factory.  A quick summary:  The new owners announced that they would reduce salaries and benefits.  Workers went on strike.  Eleven months later, Brynwood partners was ordered to reinstate the strikers.  They complied, but soon after sold the factory to another company which closed it down and moved production to Ohio.  The strikers lost their jobs; Brynwood Partners reports losing “upward of seven or eight million dollars”; and the community lost the benefits that come with hosting a profitable business (not to mention, a nearby reliable source of yummy cookies).

Frazier’s article does not say much about the negotiation process between workers and the new owners, and I do not know whether mediators were involved, and if so, what style of mediation they favoured.  But one detail from his account stood out:  The strikers distrusted the new owners and did not believe that they were telling the truth about the company’s financial situation.  And without an accurate idea of the company’s profitability, they had no way to judge if the salaries they were offered were reasonable or exploitative.  (The merchandise mart that took over the factory building will pay lower wages than Brynwood had proposed in the rejected contract.)

Lack of mutual trust is often a factor by the time parties come to mediation.  How can mediators get parties to trust one another?  The answer may surprise you:  They cannot and should not try.  Personal trust has to be earned over time.  Mistrust can be a protective response, and people sometimes have very good reasons for not trusting one another.  A mediator risks losing credibility if she encourages people who are mistrustful of one another to ignore these feelings.

But thinking of “trust” as a personal attribute is only one way to think about it. There will always be specific individuals whom you may not trust, and others who may not trust you.  In many disputes, trust can be “out-sourced.”  That is, both parties can agree to put their confidence in a neutral evaluator.  For example, in a strike situation where parties have different views of the organization’s financial prospects, a mediator might suggest bringing in an independent accountant or valuation expert.  Family members whose disagreements over the value of an estate are complicated by personal mistrust might agree to seek out several assessments and work on the basis of their average.
When people mistrust one another – and even when that mistrust is entirely appropriate – they can often continue to work together and negotiate effectively. When disagreement over some factual matter is driving a dispute, parties who can out-source trust might be able to come to a “win-win” agreement after all.