Negotiating Employment Contracts: When Cleverness is a Receptor Blocker for Wisdom

I nearly concluded the quest for my next radiology career step a couple of weeks ago. In relatively rapid succession, a prospect went from job listing to serious consideration to top contender. I met the rad group’s radiological needs quite nicely and the prospective employer had met mine in terms of compensation and lifestyle.

Then it was time to negotiate the contract. Unfortunately, defeat was snatched from the jaws of victory as the folks negotiating for the rad group opted to be clever rather than successful.

It is a common flaw, especially with highly educated and successful types. Accustomed to being the smartest people in the room (and/or feeling a need to prove that they are), they speak too much and listen too little. They advance their arguments so vigorously and insistently that they fail to seriously consider—or even hear—alternative viewpoints.

One manifestation of their insistent cleverness was an inability to give any ground whatsoever on a handful of contention points I had seen in the contract. I have become moderately experienced with negotiating employment contracts in the past couple of decades. By the time a contract is being discussed, the big stuff is usually squared away. Any minor negotiation points that remain are typically a give-and-take affair in the name of sealing the deal.

This was not the case with those negotiating on behalf of this rad group. They acted like every little crumb on the table was worth fighting tooth and nail. This approach would not be at all indicative of a group that would be flexible and inclined to fair compromises in the name of “everybody wins together.” It was more like “Our way or the highway.”

As things progressed and I saw their refusal to budge on just about anything at all, another facet of their approach was hard to ignore. Not only were they being unusually stubborn, they were taking browbeating-like swipes at what I had to say. Examples included: “Why would you ask for that?” and “You need to forget about clause X; we never change that for anybody.” They even tried to “walk back” promises they had made during pre-contract negotiations. When I objected, their response was that their new, retrenched position was “very considerate and generous, and stands as is.” In other words, if I expected anything else, there must be something wrong with me.

Unfortunately, there was something the negotiators for this rad group did not consider. Even if you are certain you’re the most clever individual in a situation (and the more frequently you believe that to be the case, the greater the chance you’re wrong about it sooner or later), others might not recognize your supremacy. Acting like it is a given might annoy the person you are trying to recruit.

This is a different hazard of cleverness. Much like a pharmacological receptor-blocker, it can interfere with your ability to learn new things. A negotiator so certain he or she is the smartest guy in the room, so convinced that his or her terms are the only ones that matter, might not recognize the importance of what the folks on the other side of the table are saying. These may be things that could seal the deal or prompt the recruit to walk away from it. There may even be new ways of improving the deal for the negotiator that he or she had not considered.

Such was the case with the final nail in my contract’s coffin, hammered home by my could have been new employer. There was a clause about my prospective status as an independent contractor with typical boilerplate language to the effect that the employer wouldn’t be responsible for withholding income taxes from my direct deposit checks.

I saw an issue right away. This teleradiology job was in the same state as the job I was leaving, a different state from my own. Some states have enacted laws to retain state-level income tax, rather than let it flow into the coffers of other states where telecommuters reside. Sometimes these laws can catch employers unaware, especially employers who are new to the whole telecommuting game.

My previous employer found this out the hard way. A couple of pay periods into my time with the employer, it learned that it was required to withhold state-income tax from my paychecks. I have no idea whether the employer got dinged with interest or penalties for the honest mistake.

So when I saw the first draft of the contract with the new gig and it specified that state taxes would not be withheld, I tried to advise the prospective employer. I just happen to know about a wrinkle of your state’s law that requires you to withhold state-income tax and thought I’d mention it to save you hassles down the line. I even provided the employer a link to the page of the state government website and the relevant paragraph on that page.

Unfortunately, for the negotiators from the rad group, they were in full-on “we’re the clever ones here” mode. It evidently wasn’t part of their worldview that someone could have information they didn’t. Instead, it seems they assumed I was trying to be clever myself, perhaps pulling a fast one on them.

Once again, they cleverly shut me down with the stance “The contract stands as is.” Really, it wouldn’t have been any skin off my nose for them to blunder into their state’s bureaucratic beehive when tax season rolled around but then they tried to get cleverer still and added a line that I would “indemnify” them for all tax penalties and interest.

Of course, when I told them I would not sign up for paying penalties that they stood to incur as result of ignoring my advice, and asked them to remove that line, they stuck to their clever guns and earned themselves a line through their name on my job prospect list.

Not only did their cleverness prevent them from learning a local tax law which might ultimately wind up costing them a pretty penny, it also brought them from the home stretch of a recruitment project back to square one. I wonder if these rad group recruiters will ever recognize their self-inflicted wounds. Excessive cleverness can also impair self-reflection.