A number of noteworthy disputes among businesses, organizations, and individuals made headlines over the last few years and demonstrate the importance of negotiation in business. We point out the negotiation angles behind stories first reported by the New York Times, the Wall Street Journal, and other media outlets. Keep an eye out for common themes among these top 10 examples of negotiation in business: hardball negotiation tactics that backfire, costly legal battles that could have been avoided, and disputes over poorly worded contracts.
Negotiations in business – a few optimal examples
- Robin Thicke versus the family of Marvin Gaye
- Singer and songwriter Robin Thicke and the two writing partners behind his breakout hit “Blurred Lines” sued the family of the late Marvin Gaye in a preemptive strike and asked for unspecified damages in a dispute over copyright infringement. Gaye’s children promptly filed a countersuit and even sued the publisher who controls Gaye’s songs of trying to intimidate them into dropping the case.
- Starbucks and Kraft Foods
- A three-year dispute between Starbucks and Kraft Foods over the distribution of Starbucks packaged coffee in grocery stores was resolved with arbitration ruling that Starbucks had breached its agreement with Kraft. The coffeemaker was ordered to pay the food giant $2.75 billion.
- Michael Bloomberg versus the New York teachers’ union
- New York City stood to gain about $250 million in aid and $200 million in grants if it reached agreement on a new evaluation system with its teachers’ union, a 4% overall increase in state aid. But as 2012 drew to a close, talks between New York’s United Federation of Teachers (UFT) and New York mayor Michael Bloomberg were deadlocked. On the deadline date, the two sides separately announced that a final, late-night negotiating session had collapsed. Ultimately, New York governor Andrew Cuomo imposed an evaluation system on the city.
- Apple and Samsung
- In an extreme example of the importance of negotiation in business, a California jury ruled in August 2012 that Samsung would have to pay Apple more than $1 billion in damages for patent violations of Apple products, particularly its iPhone. The judge eventually reduced the payout to $600 million. Later, another jury ruled that Samsung would have to pay Apple $290 million of the amount overruled by the judge in the 2012 case.
- Simon & Schuster versus Barnes & Noble
- When months of negotiations with publishing house Simon & Schuster reached a standoff in January 2013, Barnes & Noble attempted to gain leverage by significantly reducing its orders of Simon & Schuster titles and engaging in other hardball negotiation tactics, such as refusing to book the publisher’s authors for in-store readings. Given that Barnes & Noble sells about 20% of consumer books in the United States, Simon & Schuster editors and their associated agents and writers were “apoplectic” about the bookseller’s decision to use them as a bargaining chip.
- An end to the NHL lockout
- A breakthrough in a 113-day lockout of the National Hockey Association came when federal mediator Scot L. Beckenbaugh entered the picture, according to USA Today. When face-to-face negotiations got heated, Beckenbaugh separated the two sides and engaged in shuttle diplomacy, visiting each side in turn to identify issues where they were willing to be flexible. The final deal hinged on the issue of player pensions.
- Fiat’s pursuit of Chrysler
- Acquiring Chrysler had become Fiat’s best hope of staying solvent. Fiat acquired the U.S. and Canadian governments’ stakes in Chrysler, acquired in a 2009 bankruptcy deal, for $640 million in 2011. But when Fiat attempted to begin buying a stake owned by the voluntary employee beneficiary association, or VEBA, the association and Fiat reached drastically different calculations of Chrysler’s value. According to Steven M. Davidoff of the New York Times’ “DealBook,” the dispute could be chalked up to “a $4.5 billion drafting error.”
- Time Warner versus CBS
- When Time Warner Cable reported a huge quarterly loss of television subscribers, the largest in its history, the bad news was attributed largely to an impasse with television network CBS over fees, which led to Time Warner blacking CBS out of millions of homes during the summer of 2013. The parties’ ultimate agreement was viewed as a victory for CBS, which won a promise of significantly higher fees for its programming in the blacked-out cities, from about $1 per subscriber to $2, as well as the digital rights to sell its content to Web-based distributors such as Netflix.
- Apple’s price-fixing defeat
- In 2007, five major U.S. publishers had negotiated a new business model for e-book pricing with Apple, which was getting ready to launch the iPad. After at least one of the publishers threatened to delay the release of its digital editions to Amazon unless it switched to a more lucrative model, Amazon reluctantly agreed, and e-book prices rose across the industry to about $14.99. The U.S. Department of Justice later accused the parties of colluding to artificially raise e-book prices.
- JPMorgan’s DOJ settlement
- In July 2013, U.S. Associate Attorney General Tony West met with JPMorgan Chase executives to outline an array of civil and criminal investigations of the bank, related primarily to its sales of troubled mortgage investments during the financial crisis. Four hours before a Department of Justice’s (DOJ) scheduled news conference to announce charges against JPMorgan, CEO Jamie Dimon called West and asked to meet in person. The news conference was scuttled. The DOJ’s settlement with JPMorgan, officially announced on November 19, dropped the idea of legal charges but did include the largest settlement payment the DOJ has ever negotiated from a single corporation—$13 billion.
We’d love to hear your examples of negotiation in business. Leave us a comment.
Originally published in 2014.