Testing the 'rules' of public negotiations

Travelers wait in line at the American Airlines ticket counter at Miami International Airport on September 25, 2012 in Miami, Florida.

American Airlines says things are getting back to normal after a month in which its on-time performance dropped to 59 percent, that's more than 20 percent below its rivals.

The airline has blamed its pilots, who are unhappy with new pay and work rules, for purposefully forcing delays and cancellations in protest. But now, the company's CEO says the carrier can work through the dispute.

Sheila Heen, a conflict resolution adviser who lectures at Harvard Law School, says the pilots' tactics may be working, "the pilots are actually doing a reasonably good job of bringing other players into the negotiation by saying, 'look, other people here are on our side, and those other people also have decision making power because they can choose to fly with someone else.'"

The strategy, though, is high risk as passenger patience and support could run thin, "the public may backlash," says Heen, "you can see that in the [NFL] ref situation."

With the recent flurry of highly publicized labor disputes -- NFL refs, American Airlines pilots, South African miners -- Heen says the key takeaway for her has been allowing the other side enough room for a "way out" to avoid huge downside losses.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.
Log in to post1 Comment

Actually what is needed is a rewrite of corporate bankruptcy law regarding the shedding of worker/union wage and benefit contracts. One would think we would have gotten that with a supermajority of Democrats in 2009, but we didn't know about those pesky Third Way corporate Democrats posing as progressives!

What people need to know is that these workers, whether pilots or bus drivers, are being placed in such threatened positions by this temporary power grab by corporations that public safety is at a far higher risk then with any terrorist attack. With wages so low as to kill any desire towards quality; with hours so long as to risk sleep deprivation; and with attitudes throughout the system frayed, one does not have to look far as to see how all this effects the consumer.

One might say that all that money saved in operational costs could be driven into the business in service improvements that would benefit the consumer, but no, the motive for profit trumps when all businesses have the same operating model and prices. Are you seeing the need to vote for a labor-loving politician? Yes we can!

With Generous Support From...