The Role of Leadership in Negotiation: The Case of the U.S. Rail Negotiations

The role of leadership in negotiation is not always clear: When should leaders back off, and when should they intervene? President Joe Biden’s role in a high-stakes labor negotiation offers a case study.

By on / Leadership Skills

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When a negotiator or team is attempting to reach a deal or engage in dispute resolution on behalf of their organization, the question of whether and when to involve top leaders in the discussion often looms large. Should leaders be involved in the early stages? Take a hands-off approach and swoop in to close the deal at the end? Demonstrate collaborative leadership by staying at the table throughout? The role of leadership in negotiation is important to consider for those aiming for effective leadership.

In 2022, a high-stakes negotiation labor dispute between U.S. freight rail companies and their employees’ labor unions highlighted the role of leadership in negotiation as well as why negotiation is important in leadership. We take a closer look at the talks and, in particular, President Joe Biden’s involvement.

Stuck on the Tracks

In 2019, freight railroads and railway workers’ unions began negotiating the terms of a new labor contract for 2020. But the talks dragged on for two years, with the parties deadlocked over pay raises and attendance policies. Because of staffing shortages, the engineers’ and conductors’ unions said, the railroads required them to be constantly on call and penalized them for missing work because of medical appointments and family emergencies.

The specter of a strike or lockout loomed over the talks. With almost one-third of U.S. freight carried by rail, an interruption in rail service would cost the economy more than $2 billion a day, according to the Association of American Railroads. Distribution of food and other essential goods would have stalled. Shipping delays would exacerbate existing supply-chain challenges, and empty store shelves would lead to even higher inflation.

Congress has the authority to prevent railway workers from striking, but pro-union Democratic leaders resisted doing so, according to CNN. To try to head off a catastrophe, in July 2022, Biden appointed a nonpartisan Presidential Emergency Board, which instituted a 30-day “cooling-off period” to prevent a strike or lockout.

Cooling Off and Heating Up

As negotiations continued, U.S. labor secretary Martin J. Walsh and other top Biden administration officials stressed to the parties that failure was “unacceptable,” one source told CNN. The Biden administration also avoided weighing in publicly on specific aspects of the talks, according to CNN. And the White House held discussions with key players in shipping, trucking, and air freight to help plan for the worst-case scenario.

With the cooling-off period due to expire on Friday, September 16, senior White House staff, cabinet officials, and Biden “worked the phones for days to try to break the impasse,” according to CNN. They were careful to stress that they were playing the role of “neutral arbiter” rather than siding with either party.

Keeping the Trains Running

On Wednesday, September 14, Walsh joined the negotiations. His role? “Part mediator, part motivator, part guy who blocks the door if they try to leave without a deal,” one official told CNN.

The final-hour discussions were “closely guarded,” according to CNN, with bystanders outside the room “attempting to divine whether the length [of the talks], or perhaps the selection of Italian food for dinner, signaled meaningful progress.” Biden asked his negotiating team for “near real-time updates” even as they “weighed when to have him engage directly,” sources told CNN.

Around 9 p.m. that night, Biden joined the discussions via phone. Afterward, talks continued well into the night. Around 2 a.m., Walsh called White House officials to tell them a deal appeared to have been reached. Biden announced the agreement around 5 a.m.

In the end, workers secured several concessions, including a 24% pay raise over five years, an additional day off, and more flexible schedules, including time off for medical appointments, the New York Times reports. The companies insisted that workers use unpaid leave to attend those appointments.

“This agreement is a big win for America,” Biden declared. “And this is a great deal for both sides, in my view.” In the weeks ahead, workers from several unions voted to ratify the agreement.

Weighing the Role of Leadership in Negotiation

In high-stakes negotiations, it’s tempting to involve the boss early and often in talks. But doing so carries risks for negotiators and organizational leadership. “Once you’ve let this genie out of the bottle, it’s virtually impossible to get it back in,” warns Program on Negotiation faculty chair Guhan Subramanian. “Kicking it upstairs” can signal that talks are in trouble and that those involved don’t have the power or skills to reach agreement.

Subramanian advises involving top leaders strategically. Include them when you are aiming to make personal connections with key negotiators rather than when trying to negotiate the terms of a deal. When substantive talks begin, keep your boss in the loop and ask for their guidance when needed. Threatening to involve bosses on both sides may help stalled talks get back on track. Finally, bringing in the boss to help you cross the finish line can be helpful, but only “if all else fails,” writes Subramanian.

What are your own views and experiences regarding the role of leadership in negotiation?

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