The State-Unions Shadow Negotiation

Larry Price
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Wednesday - September 02, 2009
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No one should be surprised that the state of Hawaii and our public unions are encountering difficulties in their current negotiations. What has to be considered is the difficulty may be intentional and the result of a clear strategic, behavioral or philosophical choice by the other party.

One more thing should be considered: The difficulty could be attributed to inadequate skills, including faulty diagnosis of missed opportunities to reach a settlement. This is referred to as a shadow negotiation.

In a shadow negotiation, it is the social context that needs to be managed. It’s pretty obvious that the public unions would rather not negotiate with Gov. Linda Lingle or her attorney general, Mark Bennett, who appears to have a strong say in what happens in the negotiations, judging from all the legal action generated by both sides.


Said another way, they don’t really trust each other.

Unfortunately for the public-union negotiators, there is evidence that they are in a weaker bargaining position than most would think.

With 16 states exercising furloughs to cope with massive budget shortfalls, Hawaii’s appeal to Circuit Court Judge Sakamoto’s ruling is looking stronger. It would seem judicially inconsistent that while the governors of 16 other states have used their executive powers to mandate furloughs, the governor of the state of Hawaii can’t use furloughs to balance a whopping fiscal shortfall.

Of course, it is true that Lingle has not had much luck with rulings from the Judicial branch of government. If she wins on her appeal, it would be a big boost to her efforts in the ongoing negotiations.

It also seems pretty obvious now that the legislative leaders are either not in the position to or don’t have the needed clout to bail out the unions with tax increases.

By now, it is pretty clear that the Council on Revenues’ latest estimate will have sent shock waves and jarred the negotiations. Only time will tell, but the “I win, you lose” negotiations will have to give way to a problem-solving mode.

The reason is the state doesn’t have enough revenue to support the current size of government operations, and experts are saying it’s not going to get better anytime soon. Even the panel of arbitrators will probably have to seriously consider the state’s ability to pay for any kind of benefits in their ruling, expected in late December.

Further proof comes from the administration’s last offer, which expired on the day the Council on Revenues announced its latest estimate. This is a probably best viewed as a pressure tactic by the administration to make the public-union negotiators realize that preserving the status quo is unacceptable, because it makes it quite clear the cost of not negotiating.

The administration apparently feels comfortable in its current position, and has decided it was the right time to issue an ultimatum in an attempt to induce forced concessions from a presumably recalcitrant opponent.

There is strong and convincing evidence that the state has done that.

First, there is a solid demand.


Second, by doing so it has created a sense of urgency, and lastly, it has issued a threat of punishment if compliance does not occur. In this case, layoff procedures have already been launched.

What every taxpayer in Hawaii should wish for is that any ultimatum does not cause an escalation, or worse, taint future dealings between the parties, maybe permanently.

After all, we still don’t have a ruling about the Hawaii State Teachers’ Association’s refusal to adhere to a negotiated contract ratified by both management and labor calling for random drug testing.

One thing is for sure, the private unions have demonstrated the proper way to negotiate with management, and they can’t be happy with the deteriorating public opinion toward unionization in general. Generally speaking, most research shows that the public does not favor unions and their leaders when they are perceived to be “too powerful.”

Most taxpayers favor a balance between the two, not a political power struggle.

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