Q. Is it permissible to bluff in negotiations?
A. I have been asked this question many times, and I
have always had difficulty formulating a convincing
response. However, I am going to present here a
fascinating analysis of the question by Rabbi Dr.
Aaron Levine of Yeshiva University. His
new book Moral Issues of the Marketplace in Jewish Law
includes an extensive section on the important yet
neglected topic of negotiation ethics. In my opinion,
this chapter is an important contribution not only to
Jewish ethics but also to the entire business ethics
literature.
The context of his discussion, and one of the most
common bargaining situations, is labor-management
negotiations, so we will present his insights in this
context.
In this chapter, Rabbi Levine makes some very
interesting and useful distinctions among various
kinds of bluffs or untruths.
Rabbi Levine points out that a person can lie in
negotiations for a variety of reasons. Commonly, one
side may face an acceptable offer (one that would be
accepted if it were truly a take-it-or-leave-it
situation) and try to portray it as unacceptable
(threatening a strike when in fact the negotiator
knows the rank and file would actually accept the
offer). But sometimes one may accurately present an
offer as unacceptable but mislead as to the reason. In
particular, claiming that "we would like to meet your
demand but we are unable to" is less alienating than
stating "your offer is unacceptable to us", even if
the latter statement is true.
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Rabbi Levine views such a claim as a kind of white
lie. Jewish law permits occasional white lies to
sustain good-will and avoid embarrassment; for
example, telling a visitor that "Joan is sleeping"
instead of saying "Joan has an important phone call".
The latter answer could insult the visitor by making
him think that he is being turned away for an
inadequate reason (even though the phone call truly is
very important), and saves Joan from unnecessary
intrusion into her privacy. ("What could Joan be
talking about that's so important?!")
Here also the object is to sustain good-will by making
a more conciliatory explanation for rejecting a
demand. But even a "white lie" is an affront to
truthfulness and so is subject to many restrictions:
there must be no other way of keeping good will; it
must not be a lie which will ultimately be revealed
and cause even more ill-will; and it must not be made
in a way which habituates a person to untruth.
Rabbi Levine's example is a university negotiator who
doesn't want to be blunt and say "I'm sorry, you guys
are just not worth that much to us". He shouldn't say
"There is no money in the current budget" if this is
not true, even if the budget is currently under wraps,
since ultimately the budget will be publicized. But
stating "we can't raise tuition enough" to meet the
demand may be acceptable, if the decision on tuition
is known only to a handful of administrators who will
not reveal the decision they made.
What about an actual threat to strike? If the
administration's offer is truly unacceptable, then of
course there is nothing wrong with threatening a
strike. What about an offer which, if push came to
shove, the faculty would accept? Can the negotiator
threaten a strike in order to intimidate the
administration into making a better offer?
Here Rabbi Levine distinguishes between two kinds of
false threats: credible threats and transparent
threats. If the context of the negotiations is such
that the other side will actually believe the threat,
then he writes that such a threat is a bad faith
negotiating ploy. But if the context is such that the
other side perceives that the threat is merely a kind
of exaggeration for effect, then there is no
prohibition.
The basis in Jewish law for this understanding is in
the laws of vows. If a person swears that he will not
accept less than a certain amount for his merchandise,
then of course the oath is binding. But some people,
unfortunately careless with their oaths, use the term
"I swear I won't" as a convenient translation of "I
would be reluctant to", and everyone is aware of this.
Sometimes mention of a strike is made to signal to the
other side that he is getting into a sensitive area
without actually meaning to put an end to
negotiations; if the other side understands that this
is a "caution threat" this is ethical. But according
to Rabbi Levine's analysis, an outright false threat
is a bad-faith ploy.
Rabbi Levine's chapter includes many other fascinating
ethical distinctions, including discussions of the
ethics diversionary statements, ultimatums,
exaggeration, and false "decoy" demands. He even
discusses hostage negotiations. I have never
encountered such a comprehensive and convincing
treatment of the ethics of negotiations in any work,
Jewish or general.
THE JEWISH ETHICIST, NOW IN BOOK FORM