What You Need to Know About Interest Based Bargaining

What is interest-based bargaining, and how can it be used successfully in federal labor relations?

The Trump Administration by Executive Order 13836 told agencies: To the extent that an agency’s CBAs, ground rules or other agreements contain requirements for a bargaining approach other than the exchange of written proposals addressing specific issues, the agency should, at the soonest opportunity, take steps to eliminate them. This Executive Order essentially forbid agencies from using interest-based bargaining which is not based on using written proposals but rather an exchange of interests.

This Executive Order was rescinded under the Biden Administration. A return to the use of interest-based bargaining and Biden administration is likely to foster a return to the use of interest-based bargaining. 

Interest-based bargaining is a recognized process used for collective bargaining. In traditional bargaining, the process espoused by Trump’s Executive Order, each side to the bargaining puts forth one simple answer or solution to a problem in the form of a written proposal. Each negotiating team’s minds are already made up as to what the final outcome should be. The bargaining becomes a question of which side retreats the most from its stated position or which side is able to force or cajole the other side to its point of view. Positional bargaining is sometimes characterized by bullying and threats and is usually an exercise of power by the successful party. Interest based bargaining relies on the parties working collaboratively to problem solve solutions to work place issues.

Bargaining in the federal sector has historically been a combination of positional bargaining and rights-based bargaining. Rights-based bargaining relies on the assertion of statutory rights. The assertion of rights takes the form of strongly held positions. In the federal sector, bargainers use the negotiability process to resolve questions concerning the assertion of management rights. The FLRA takes on the job of resolving contradictory positions of the parties on what their respective rights are. It decides issues parties cannot reach agreement on because of real or imagined infringements on management rights under the Statute. This combination of positional and rights-based bargaining can lead to protracted negotiations that delay the completion of bargaining because often disputes end in third party litigation. 

Interest-based bargaining is based on the concept of labor and management acting together as joint problem solvers. The outcome of interest-based bargaining is an agreement which addresses the interests of both sides. The interests are the needs, fears, worries and concerns of the participants in the bargaining. Interest-based bargaining is also known as “Win-Win” bargaining, where both sides are seen to be winners in the final outcome.

Principles of Interest-Based Bargaining

There are five principles of interest-based bargaining which are valuable to understand. Each standing alone has merit; however, it is the merging of these principles into a successful process which not only leads the parties to an agreement, but also yields the dividend of an improved relationship.

The following is a general overview of the principles underlying interest-based bargaining:

Separate the People from the Problem

The resolution of problems can become entangled in the perceptions, emotions and assumptions of the people whose job it is to be the problem solvers. Often, an approach to bargaining is to attack the individual bargainers in an attempt to wear them down. By personally attacking a bargainer, the hope is that the bargainer will capitulate on what you want to avoid further attacks.

This can become a test of wills and can be counterproductive to solving the real issue. By concentrating on the problem and not on the opposing bargainers, interest-based bargaining avoids the personal attacks.

Focus on Interests and not Positions

Positions are predetermined outcomes, while interests are needs to be satisfied. Interests are needs, wants and concerns the parties to the negotiation have. By focusing on interests, you are forced to look at the reasons underlying your positions. In looking at interests, you are asking why something is needed. Looking at interests is a way to start a discussion of what is really needed, as opposed to positions, which presuppose that one side already has all the answers. 

Create Options for Mutual Gain

To create options for mutual gain, each side must recognize that there is more than one option to solve a problem. A necessary process for creating these new options is to use brainstorming. Brainstorming provides the opportunity to come up with the greatest possible number of options. Brainstorming opens new approaches to thinking about how to resolve a problem and creates new possibilities for solutions to provide joint benefit for both sides at the bargaining table.

Develop Your BATNA 

Your BATNA is your Best Alternative to a Negotiated Agreement. Looking at your BATNA forces you to think through what you will do if an agreement is not reached. It provides a dose of reality as to what happens if you cannot come to agreement. Developing your BATNA is creating alternatives before you negotiate. 

Define Objective Criteria

Objective criteria are used by the parties to the negotiation to determine which options meet the needs of the participants and which fail because they do not meet the mutually agreed upon criteria. Examples of objective criteria include fairness, acceptability to constituents, legality, cost effectiveness and tradition. Objective criteria provide a process for sorting out the options to determine which ones are most likely to solve the problem and meet the needs of the parties to the negotiation.

How to be Successful Using Interest Based Bargaining

Understanding and being effective at interest-based bargaining takes both experience with the process and a belief in its goals. A process which has as its foundation trust and communication may be a whole new world for some labor-management relationships. It provides a process for improving communication and making the first down payment on developing trust. 

Often the parties that engage in interest-based bargaining use the services of a jointly agreed upon facilitator. A facilitator is often used because the interest-based process is new to both parties and they need someone to help them successfully use the process. The facilitator’s role is to assist the parties in using the interest-based process and to act as a quasi-mediator to help the parties reach agreement. For those with strained relationships or those who have never used the process before, the use of a neutral facilitator is very helpful to ensure their success. 

If interest-based bargaining is agreed to by the parties they should have ground rules consistent with this bargaining approach. These ground rules will include such provisions as establishing how agreements will be reached on the issues for bargaining, how interests will be exchanged, whether a facilitator will be used and importantly when interest-based bargaining may no longer be used and how the parties will revert to traditional bargaining.

Another provision should deal with training. To be successful in using interest-based bargaining requires that the participants from both sides receive joint training on how to effectively use the process. An important part of this training should be aimed at each side gaining an understanding of the principles of interest-based bargaining and how to apply them to a bargaining issue. 

Having facilitated a number of collective bargaining agreements using the interest-based process, it was not unusual that at the beginning of the process each side was wary of the other. Some did not come into the process with a high level of trust. It took some time for the parties to become comfortable with the process and to understand how to effectively use it. Interest based bargaining works but it takes time to get used to using it and dedication to make it work.

About the Author

Joe Swerdzewski, former General Counsel of the FLRA & owner of JSA LLC is the author of The Essential Guide to Federal Labor Relations, A Guide to Successful Federal Sector Collective Bargaining, etc. For more info on JSA’s services, email [email protected] or subscribe to JSA’s newsletter.

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