INDUSTRIAL RELATIONS
people believe that negotiations are “all or nothing,” and that there has to be one winner and one loser. Tat is just simply not true. Negotiation is a back- and-forth dialogue that is designed to help reach an agreement when you and the other side have some needs or issues in common and some needs or issues that are not in common. Te fact is that the best deals combine terms and ideas from both parties. While most negotiating seems like
common sense, it is not uncommon for people to get caught up in the
Performance Risk Continued from page 19
does not generally affect enforcement
against the issuer of the LC. Subcontractor Default Insurance.
In 1995, Zurich established Subguard to protect against subcontractor defaults. Since then, Arch and XL Group have offered similar insurance products. Apparently available to owners and contractors, its target purchaser appears to be a general contractor with a high volume of subcontracted work in private projects. Te policy is first-party insurance
and requires insureds to prequalify subcontractors. Contractors that can work with known subcontractors repeatedly, or that can quickly and efficiently prequalify, may be best suited. Contractors that use insurer- approved prequalification services may get discounts. Advocates contend it is an effective alternative to surety bonds in certain circumstances. Tere are
limited actual real-cost comparisons. Insurance Cost and Enforcement.
Cost is often negotiable based in part on loss experience, after insureds exhaust deductibles. Initial costs
20 May/June 2017
Labor Relations & The Art of Negotiation N
By Sue Weiler-Doke, Director, Industrial Relations – Northern California
egotiation is a fact of life. Everyone negotiates something every day. Many
emotion of the moment. Emotion has no place in a successful negotiation. It takes doing your homework and the discipline of attention, not emotion, to keep a negotiation moving forward. You need to keep your eye on the big picture at all times.
Communicate Tere is no negotiation without
good communication. Communi- cation is not always an easy thing, even between people who have a lot in common or have shared similar experiences. Whatever you say, you should expect that the other side will most likely hear something different. You need to have a clear understanding of what you are saying, be clear when
are reportedly comparable to surety bond premiums (0.85 to 1.5 percent); however, such costs do not factor in deductibles or copayments, which can range into seven-figures. Sometimes insurers require minimum premiums over three to five years. Pay-out is after a declaration of default, notice, submission of proof of loss, and proof of payment of deductibles. Insurers are subrogated to the losses, and insureds must cooperate in recovery efforts. Payments are made with an express reservation of rights and reimbursable
if the default is found in error. Conclusion. Many contractors and
lawyers have their opinions on these options, and each have their pros and cons. Regardless of the option selected, using some form of performance assurance is good practice, and certainly much better than braving performance risk entirely alone!
Jonathan J. Dunn is a senior partner at SMTD Law LLP and is the current vice-chair of the AGC-CA Legal Advisory Committee. For more infor- mation, go to
www.smtdlaw.com.
you speak, and be sure that what you said is what they heard. Te better the communication is the better the negotiation will be.
Listen One of the most overlooked actions
in a good negotiation is being an active listener. You need to be just as concerned with what others are saying as you are about what you are saying. Te best negotiators listen first and talk second. Tey actively listen to what others have to say, follow that lead, and ask good questions. Good negotiators lean in to the conversation and use head nods to show interest and to let others know that their comments are understood. You also need to listen without distractions. Be sure to put away phones and computers to minimize the temptation to wander from the topic at hand. Tis may sound easy, but as we all know, undistracted listening isn’t always easy. Commu- nicating our ideas clearly, and hearing other’s ideas in return, takes thought and practice.
Keep It Results-Oriented Keep the focus of the negotiation
results-oriented and always be looking for what would make the best long-term deal for both sides. Keep the emphasis of the negotiation on the facts and away from the people involved. By taking the emphasis off the people involved and keeping it on the facts, the negotiation is more likely to be amiable and not antagonistic. Whether in the business
environment or in your family life, people reach most decisions through negotiation. Te best negotiators are patient as well as persistent. Tey look for the win-win. For more information about AGC’s
Industrial Relations services, please visit our website at
www.agc-ca.org/ services/industrial/ or contact the IR Department South at (626) 608-5800 or North at (925) 827-2422.
California Constructor
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